No sign of reimbursement for OTB ticket expenses flagged in state audit

Jan. 11—In the fall of 2021, state auditors criticized representatives of Western Regional Off-Track Betting Corp. for improperly helping themselves to an estimated $121,000 in tickets for professional sports games, concerts and other shows, as well as thousands of dollars in food and drinks they consumed while taking in the action.

More than two years later, a spokesperson for state Comptroller Thomas DiNapoli concedes their office doesn't know whether OTB officials have taken any action on one of the audit's main recommendations: identify individuals who improperly received tickets and seek reimbursement.

"We were not informed if WROTB sought and received reimbursements," DiNapoli spokesperson Jennifer Freeman said in an emailed response to questions from the Niagara Gazette.

While Freeman said it is still the comptroller's position that OTB officials should seek reimbursement for the $121,000 in improper costs, she added that, at this time, "no follow-up is planned."

In a Sept. 10, 2021, letter of response to the audit, then OTB Chairman Richard Bianchi acknowledged the recommendation that reimbursement be sought for ticket and concessions expenses and indicated that an "internal review" had been undertaken. Bianchi also indicated that OTB would conduct an additional review of the prior ticket distribution and "if it is found that a distribution was made to a non-eligible person, it will seek reimbursement of costs."

It's unclear if anyone from OTB followed through on Bianchi's promise, as neither the President and CEO Henry Wojtaszek nor marketing director Ryan Hasenauer responded to multiple requests from the Gazette for comment this week.

What is known, however, is that OTB has continued to purchase suites, tickets and concessions at Highmark Stadium, KeyBank Center and Blue Cross Arena in Rochester.

At its November meeting, the board approved $130,000 in spending to send patrons to games and events at the stadium and arenas. Erie County board member Jennifer Hibit questioned whether the board could see a list of people who received tickets. (Hibit subsequently resigned in December due to her role as secretary of the Erie County Democratic Committee.) Hasenauer and Wojtaszek both said the agency keeps a list of who is given tickets, but not necessarily who ultimately uses them.

"I think it would be helpful to see who's attending. We know there's issues with this in the past and I think it's important to know who's attending and who's not," Hibit said, referring to the Comptroller's audit.

Other board members, though, pushed back on a suggestion that OTB keep sign-in sheets for the suites they rent, with one noting that gamblers "have no interest in listing who's with them, and there's some privacy stuff with that too."

"I'm not in favor of sign-in. That's kind of high-school-ish," added board Chairman Dennis Bassett, the Rochester representative.

At the meeting, Hasenauer indicated that the Comptroller's office was satisfied with how the agency keeps track of who receives tickets.

"What we're doing now is at the recommendation of the state," he said.

OTB is a public benefit corporation owned by 15 counties in western and central New York, including Erie and Niagara, and the cities of Buffalo and Rochester. It oversees the operation of Batavia Downs casino, hotel and harness racing track in Genesee County and OTB betting outlets and E-Z Bet locations across the region.

As part of its annual marketing and promotions program, OTB leases suites at Highmark Stadium and KeyBank Center in Erie County and Blue Cross Arena in Rochester. In addition, OTB annually purchases tickets for concerts, performing arts shows and other events at local theaters and venues, including the Darien Lake Performing Arts Center in Genesee County and the Riviera Theatre in North Tonawanda.

OTB officials were initially reluctant to discuss the particulars of ticket distribution practices.

The promotional ticket program is intended to spur return gaming business by offering customers, primarily Batavia Downs patrons, the chance to attend sporting events and concerts at OTB's expense. OTB also covers food and drinks for those attending.

The 2021 state audit found, between Sept. 1, 2017, and Dec. 31, 2019, 547 instances where tickets were distributed to non-players, including 465 employees and 29 corporation vendors. The remaining 53 tickets were identified in the audit as "charity contributions."

The audit identified several instances where OTB officials, not patrons, attended sporting events and ate and drank at public cost, including:

A November 2018 Buffalo Sabres game where none of the 18 tickets were given to OTB patrons. Auditors said Bianchi, then board chairman, received six tickets. Scott Kiedrowski, the vice president of operations, received nine. An OTB vendor received three tickets. The attendees spent $1,167 on concessions, including $177 on alcohol. OTB had no record of who attended the game.

A December 2018 Sabres game where Bianchi was listed as receiving four tickets. Another five tickets were earmarked for another board member. Five other tickets were listed for a "host." The concession bill was $1,443, including $493 in alcohol. Again, there was no record of attendees.

A March 2019 Sabres game where a board member received 11 tickets. Another three were reserved for a "host" — meaning 14 of 18 tickets didn't go to patrons. The concessions bill was $1,212, including $358 in alcohol. Once again, there was no record of attendees.

Under OTB rules at the time, up to two representatives from the organization were allowed to attend live events as "host." Auditors found evidence that the limit was sometimes disregarded, however.

Auditors determined that the average ticket cost, including the amount spent on concessions, was $221. They also noted that OTB internal records showing who received the tickets were incomplete.

"We have limited information as much of the detail on who specifically received tickets was not available," said Freeman, of the comptroller's office. "As reported, using available information, we reported out on the broad distribution categories. This figure was pulled from the report."

In an interview last June with a reporter and members of the editorial board of the Niagara Gazette and the Lockport Union-Sun & Journal, Wojtaszek acknowledged there were instances in the past where ticket distributions and concession spending were not handled properly. He said at the time that OTB followed one of the audit's main recommendations in 2019 when it adopted a new ticket distribution policy that he said has tightened up record-keeping.

"It was [an] incomplete inventory of the tickets and that was the big problem," Wojtaszek said.

Under a new policy, only one OTB official is allowed to serve as a "host" for events. Multiple OTB officials are no longer attending Bills or Sabres games or concerts, according to Wojtaszek.

"I'm very glad that the attention was brought to it because now we have a great program that is done extremely well," he said.

Wojtaszek said in June that OTB had not sought reimbursement for tickets and concession spending, suggesting there was no need for it.

"If it hasn't been reimbursed, it's because it was properly utilized in the first place," he said.