WROTB Audit Exposes $23.5M Handle Drop Amid Oversight Failures
Novel York State Comptroller Thomas P. DiNapoli released a scathing audit today of the Western Regional Off-Track Betting Corp. (WROTB), revealing a pattern of financial drift that cost participating municipalities millions. The report details a 34% decline in wagering handle over a four-year period, coupled with a board that largely relinquished its duty to monitor spending. Although new leadership took the helm in October 2024, the paperwork shows a organization struggling to adapt to a shifting gambling landscape while costs spiraled out of control.
The audit covers January 2021 through December 2024, capturing the tenure of previous management before the recent shakeup. DiNapoli’s office issued 16 recommendations aimed at stabilizing revenue and tightening governance. WROTB officials say corrective action is already underway, but the numbers paint a stark picture of missed opportunities and unchecked expenses.
Revenue Shrinks While Payroll Swells
The core issue lies in the handle—the total amount wagered on horse races and gaming activities. Between 2021 and 2024, the handle dropped by $23.5 million. This contraction directly reduced statutory distributions to the horse racing industry, the New York State Gaming Commission, and local governments. In 2024 alone, distributions to participating governments fell to $6.7 million, a 31% decrease from the prior year.
Contrast that with operating expenses, which grew by 22% over the same period. Salaries jumped 38%, accounting for 40% of 2024 operating expenses and exceeding the operating plan by $400,000. Professional services costs rose 23%. Auditors noted that management entered into contracts for legal services and consultants without proper board approval, exceeding authorized spending amounts by over $1 million. In one instance, a law firm was paid $247,969 for work unrelated to any contract, without detailed invoices.
Context: How WROTB Funds Local Sport
Formed in 1973, the Western Regional Off-Track Betting Corp. Is owned by 15 counties plus the cities of Buffalo and Rochester. It operates off-track pari-mutuel wagering locations, including Batavia Downs Gaming. A portion of generated revenue is mandated by statute to be distributed back to participating municipalities and the horse racing industry. When the handle declines, the funding available for local government budgets and track purses shrinks accordingly.
Boardroom Transparency Went Dark
Beyond the balance sheet, the audit highlights a governance vacuum. Board members did not receive timely financial reports or cash flow statements necessary to monitor spending. Critical decisions regarding annual operating plans were made during workshops that were not documented in meeting minutes. This lack of record-keeping limits the transparency expected of a public entity.
Procurement policies were routinely bypassed. The board requires authorization for goods and services over $15,000, yet management monitored costs internally and presented resolutions to amend authorized costs only after the fact. Auditors found that of 17 approved consultants, the board received work reports from only eight. Four contracts were merely verbal, including three with lobbyists. Nine consultants provided no work reports at all despite being paid.
Lingering Issues from Prior Audits
This represents not the first time DiNapoli’s office has flagged WROTB. Two audits from September 2021 identified $121,000 in spending on sporting event tickets, concerts, food, and alcohol without proper oversight. There were also issues regarding the CEO’s personal employ of an official vehicle. While policies on take-home vehicles have been restricted and ticket records improved, auditors found that host names on ticket logs were often incomplete, listing only first names.
DiNapoli emphasized that the corporation must adapt to industry changes without losing its mission to benefit taxpayers. “I’m encouraged by steps the current board and new management have taken, and urge continued progress,” he said. Current officials expect distributions to local governments to increase in 2025, citing changes to state tax law as a primary driver.
What Comes Next for WROTB
Q: What are the immediate next steps for the board?
A: The board must actively monitor the operating plan by comparing actual expenses to projections periodically. They are required to establish spending controls, such as a purchase order system, to prevent payments that exceed authorized limits.
Q: How will this affect the horse racing industry?
A: Stabilizing the handle is critical. The decline resulted in less statutory distribution to the industry. Recommendations include working with management to find opportunities to increase revenues and stabilize the continuing decline in wagering volume.
With new management in place and 16 recommendations on the table, the pressure is on to prove that oversight can be restored before the handle slips further. Can the corporation reverse the four-year trend before the next fiscal cycle closes?
