A Government-Run Betting Monopoly Goes Broke

[bijou]

New York State's Off-Track Betting Corp. (OTB) is filing for bankruptcy "as a municipality" under Chapter 9 of the Federal Bankruptcy Code "after four years of losses totaling $38 million."

You read that right: A government-run gambling monopoly has gone broke, after losing money for years.

How was this seemingly impossible feat accomplished? There are clues in stories at Reuters and Bloomberg:

    (Reuters) Despite taking more than $1 billion in bets every year, the OTB has been unable to cover its operating costs for years and has accrued liabilities of $220 million.
...

http://newsbusters.org/blogs/tom-blumer/2009/09/02/government-run-betting-monopoly-goes-broke

Only a government could lose money running a gambling monopoly.

[RightCoast]

Don't forget the Las Vegas whorehouse that they could not operate profitably.

[thundley4]

(Reuters) Adding to the gloom are unfunded liabilities of more than $500 million, most of it related to employee retirement, health and other benefits.

(Bloomberg) The corporation’s biggest liabilities are unfunded payments to 1,366 workers’ pension and health plans, Frucher said. The workforce is represented by District Council 37, New York City’s largest public employee union, whose leaders are cooperating with the plan, he said.

Once again, it looks like cushy union deals doom an otherwise profitable venture. 

[SSG Snuggle Bunny]

Add in hookers and a full service bar and we could call it congress.

[DumbAss Tanker]

If it's like most other NY/NJ public entities, the real problem is probably that the cash flow has been tapped by the State for some other purpose and it's been bled white in the process.

[Splashdown]

http://newsbusters.org/blogs/tom-blumer/2009/09/02/government-run-betting-monopoly-goes-broke

Only a government could lose money running a gambling monopoly.

Mo Green's casino lost money, too.