Photo by Howard Owens.
By several metrics, the business of Batavia Downs is growing.
Revenue is flowing in at a record pace. There are more customers, more bets placed, and more bookings at the hotel, but with added success comes added expense, which Western Regional Off-Track Betting Corp. board remembers and executives discussed on Wednesday during the Finance Committee meeting.
Both the casino and hotel have more employees, and with three executives taking buyouts, added expenses have severely reduced the revenue that will be shared with the 17 municipalities that co-own the WROTB.
Based on profits through October, WROTB is paying out $1,677,960 less than it did through October 2023. So far this year, net earnings available for distribution are $7,107,384, compared to $8,785,334 at this time last year.
"I was asked this question by an individual, 'Well, how does that make you feel, Jackie, that the distributions are down?,'" CFO Jackie Leach said during her report to the committee. "I said, "You know, there are reasons why they are down from 2023. One, the board approved a 4.5% wage adjustment for employees.' I've always stated that we're a customer-oriented organization, and your employees are your most valuable assets; 2023 was a banner year for the corporation. So, between the wage adjustments, we do have one leg of Henry's buyout that's included in the 2024 wages, that's the cost of doing business."
In July, the board voted 14-1 to renegotiate the contracts of CEO Henry Wojtaszek, CFO Jackie Leach, and VP of Operations William White to buy out the remaining years on their terms.
Wojtaszek, who earns $299,000, will receive a full year severance. Leach, with a salary of $222,000, and White, with a salary of $160,000, each get six months severance. By the end of the year, Leach said she and Wojtaszek will receive their full payout, so it will accrue to 2024, for a total of $521,000. White will be paid in 2025.
As for employee expenses, in addition to the 4.5% raise for casino employees, the operation added more than 20 staff positions. Hotel employees received 50-cents an hour raises and the hotel, which is run by a management organization, also added staff.
"The hotel overall has had pretty good revenue," said Paul Bartow, representing Schuyler County. "I guess what you're saying is that we could do better. We need to produce more revenue to cover some of these expenses. If, in fact, it looks like the hotel is doing well, you're like, 'Oh, great,' but it's not doing well enough given these expenses, and these expenses, in some ways, have to be moved, I guess, checked with more revenue from the hotel."
Leach said that's correct.
"When your costs go up, then you've got to make some adjustments," she said.
Ryan Hasenauer, VP of business development, said he and his staff are working on booking more mid-week events in order to increase mid-week room bookings and Leach confirmed that management is looking at increasing room rates.
Total revenue so far this year for the hotel is $2,399,000, up from $2,306,000. Payroll increased from $761,000 to $881,000. Other expenses increased from $647,000 to $682,000.
The other expense cutting into revenue distribution, Leach said, is increased legal expenses.
"Am I concerned? No. I've always said this corporation has to keep reinventing itself because of the competition," Leach said. "We work within a very saturated, saturated market in Western New York."
By the numbers, October was a good month for Batavia Downs. The net video game win was $7,641,556, up over $500,000 from the previous October. The October distribution to municipalities was up by $1,381 ($41,532 compared to $40,151).
In October, there were 98,676,000 credits played, up from 92,088,000 in 2023. The win per terminal increased from $253.28 to $266.27.
The casino contributed $3.7 million to the state's education fund.
Attendance at the track increased from 74,000 to 76,000.
The casino also saw an increase in food and bar sales. Total sales increased from $676,636 to $774,848. Less expenses, net sales was $526,214.
OTB branches continue to struggle. In October, revenue was down $22,000, at a total handle this October of $3,366,000. Year-to-date revenue is $36,522,000, a decrease of $5,198,000 (There was a $1.6 million drop in revenue attributed to the closure of one branch).
Total revenue for October is $74,331,000, up $2.5 million compared to 2023. Expenses also increased from $23,507,000 to $25,429,000. Salaries increased $985,000, which is still $210,000 less than projected in the 2024 budget.
Besides salary, there has been, so far this year, an increase in expenses of $939,000.
Revenue help should be coming in 2025, Leach said, with new video lottery terminals added to the floor of Batavia Downs, approved by the state, and the anticipated approval of new EZBet machines for bars and restaurants in the region.
"I was assured by the Gaming Commission that the four EZBets that have been in the hopper -- some for a couple of years -- that we could include them in our 2025 plan because they will be approved by year-end, so we will see what happens there."
