When Rudy Giuliani was mayor, he liked to call the city’s Off-Track Betting the only bookie in the world that loses money.
It looks like Suffolk OTB is having better luck.
The Hauppauge-based bookie is buying out a company that owns Jake’s 58, the video-lottery casino and adjoining 228-key hotel in Islandia, in a roughly $120 million deal, according to Newsday. That price tag also includes a buy-out of Buffalo-based hospitality company Delaware North’s management fees.
The acquisition will end OTB’s contract with Delaware North — on which 46 years remained — saving it $13 million a year in rental and management fees. It will also put a years-long dispute over revenues to bed.
About 93 percent of what the casino pulls in goes back to bettors, leaving 7 percent for Delaware North, the casino’s vendors and the state’s public schools. Suffolk OTB sued Delaware North in 2019, alleging that the hospitality company used the casino as a “piggy bank” to cover its other expenses. Delaware North countersued and the two companies ultimately reached a settlement.
Suffolk OTB’s acquisition will mean more cash for the county, said company spokesperson Jon Schneider.
“Simply put, ownership of the Jake’s 58 property and management of the casino hotel will put Suffolk OTB in a position to contribute more money to Suffolk County than it otherwise would, a benefit that will only grow in time,” he told the publication.
Jake’s 58, which sits on the Long Island Expressway North Service Road, has ranked among the highest-grossing video-lottery casinos since it opened in February 2017. It’s raked in $250 million per month since reopening in September, Gaming Commission records show.
County officials plan to hire a consultant to review the plan.
[Newsday] — Danielle Balbi