Photo by Howard Owens.
When board members of the Western Regional Off-Track Betting Corporation walked into the meeting room at Batavia Downs on Thursday morning, they found at their assigned seats a bit of a surprise.
There was a 13-page book containing 10 proposals to reform policies for the organization.
The booklet, said CEO Byron Brown, was the result of two months of work with his executive staff to identify areas of concern and propose suggestions for policy changes.
"We have been looking at concerns that have been expressed about the operation of Western Regional Off-Track Betting Corporation since I've been here as CEO," Brown said after a closed session meeting where most of his proposals were approved by the board. "We've done a top-to-bottom review so we can be more transparent as an organization, to look at ways to reduce expenses in the organization and drive greater profitability, and the reforms are around those items."
For the past few years, the OTB has been beset by a number of controversies, including how free tickets to sporting events are distributed, executive compensation and buyouts, health insurance, travel expenses, and management participation in tip distribution.
The policy changes also address some less public issues, such as how raises are handled and the distribution of free play cards and gift cards.
Brown thinks if his new policies had been in place years ago, some of the public controversies could have been avoided.
"I have worked very closely with the board and the staff," Brown said. "The board was very open to looking at these issues and felt very positive that these reforms and these new policies will really strengthen the operation of Western Regional Off-track Betting Corporation."
The booklet also contained a bullet-point list of some of the reforms Brown has already initiated as the corporation's new CEO, such as tighter controls on how requests for sponsorships by area charities are handled and monthly reporting on advertising spending for broadcast.
Erie County rep pleased with reservations
The policy revisions were welcomed by Tim Callan, the Erie County representative on the board who has been perhaps the most persistent voice seeking reform since the board was reconstituted by the state Legislature more than a year ago.
"I'm very pleased with what Byron has done here," Callan said. "A couple of the items in the reform agenda -- about travel and changing the travel policy to get some things back under control there, changing and updating the procurement policy -- these were things that throughout last year I had been raising questions about. The sponsorship program, where the corporation gives sponsorships and donations to various groups, I've been raising a lot of questions about that. So to see that those three areas are being addressed by the new management team, I'm very happy to see that."
Callan, ever a stickler for details, does have concerns about how the reform package was brought to the board, and in the closed-door discussion (which he is also concerned about), he objected to two proposed policy proposals, which the board ultimately did not support.
Brown proposed reducing the cost of employee contract buyouts.
Some employees, including top executives, have contracts that stipulate how much severance they will receive if the contract is terminated early.
In July 2024, the board of directors approved a buyout of former CEO Henry Wojtaszek's contract equal to one year salary, or $299,000. Outgoing CFO Jackie Leach's buyout was half her annual salary, or $122,000, and operations manager William White received $87,000.
Brown's report says that a review of contracts found there is no standard severance pay and benefits package for employees under contract. One employee, not named, has reached a settlement that allows that employee to work from home until November, earning until that time $174,907.
Brown recommended capping severance to four months' salary. The board tabled the proposal and called for research on standard procedures in the gaming industry.
Callan said he opposes providing OTB employees with any severance pay, even though the practice is common in corporate America.
He said WROTB is not a private company. It's a public benefit corporation with a mission of generating revenue for the state and the 17 municipalities that control the corporation. As a quasi-state agency, employees are part of the state's generous pension system.
"That's something you folks in the private sector are not getting," Callan said. "You guys have to have 401(k)s, and Roth IRAs or whatever you do to help provide for yourselves in retirement. Well, folks here have that state pension ability separate from whatever saving they do on their own. So it's not an apples and oranges comparison for me to say, a private casino where, you know, they're not going to get a pension, and it's a private entity."
Wrapped into the contract buyout policy proposal was a proposal to address inequality in health insurance coverage for non-union employees.
Non-union employees hired before 2012 pay only 5% of their insurance premiums. Those hired after Jan. 1, 2012 pay 72% for a family plan (single plans remain 5%).
There are 38 employees who were hired before 2012 and 72 hired after the change policy.
In an interview, Callan disclosed that the monthly premiums for Batavia Downs employees are significantly higher than typical for group insurance policies.
Human Resources Director Danielle Fleming later confirmed that a family health insurance plan is $3,325 monthly. The employee contribution, if hired after Jan. 1, 2012, is 72 percent, or $2,394.
Brown's proposal, which has not yet been approved, is to find a way to close the gap between the two groups of employees and set the employee-share of future management hires at 20%. Currently, seven members of management staff pay a 20% share of their premiums.
"It's obviously incredibly expensive for the employee. It's obviously also incredibly expensive for the corporation, where the corporation to bear the expense," Callan said. "I loudly expressed my objection to that in the executive session and said that I would not vote for it. And I thought that needed further discussion. When we have members of the management team make $190,000 or more, and persons in the mid-$100,000s, to send a message and say to them and say, "Okay, you only have to pay 20% of the cost of health insurance,' but somebody here that makes $17.50 an hour has to pay 72%, that, to me, is not right, and so the management team, after some members of the board objected and raised questions on that, agreed to pull it back, and I think we're gonna have some further discussions on that topic next month."
Callan said that while overall, he is pleased with the policy changes, especially since several of them are responsive to issues he's raised over the past 13 months, he thought it was a violation of the open meeting law not to have the agenda explicitly state that the board would do more on Thursday than engage only in a general policy discussion, but actually have written policy changes to consider and vote on.
He also said it could be a violation of the open meeting law to have most of the discussion in closed session.
Asked about the exemption used under the state's Open Meeting Law, Brown said it was a personnel matter.
"There were a number of personnel items that were discussed, so that was the reason why the board went into executive session in that particular discussion, where we were discussing salaries, benefits for specific individuals," Brown said.
Callan said the only policy item that addressed specific people was the health insurance discussion, which involved seven individuals. Otherwise, the rest of the policy discussion did not touch on specific individuals. In his view, the policy discussion should have occurred in open session.
"We have a lot of discussions in committees, including an executive session, a lot of which I don't think should be an executive session under the law, but that's another story you and I have spoken about before," Callan said. "I don't think, in hindsight, it should have been an Executive Session."
Accountability and profitability
Among the policies highlighted by Brown in an interview were changes to how sports tickets are distributed and whether the OTB will continue to purchase a suite and tickets to Buffalo Bills games after the coming season.
When the Bills move into the stadium, it appears the cost of the suite will double, raising the annual cost to $200,000, which may not have the return on investment the OTB seeks.
Brown said Batavia Downs is negotiating with the Bills organization.
"We're looking at tightening the ticket policy, making sure that when we do provide tickets and benefits, those are going to our customers, and they're going to our customers in a way that generates more business for the corporation," Brown said. "We're looking at travel policy to tighten our policies on what we spend when people have to travel for business purposes, going to conferences, going to training. All of those things, I think, would have eliminated some of the issues that the corporation has faced in the past."
The ultimate goal, Brown said, is a corporation that is more efficient and more profitable.
"The agenda is about going forward, looking at issues with the board, with the staff, that we saw as concerns, things that we felt could be improved, ways that we could increase transparency, that we could increase profitability, reduce expenses," Brown said. "So, going forward, this will make the corporation stronger. This is a place where people love to come and, after expenses, generates over $90 million a year. We want to continue to produce that kind of revenue and grow the revenue."
The policy changes approved by the OTB board of directors:
Merit Raises: Over the past three years, 102 OTB employees have received merit raises for a total cost of $392,166. Merit raises are supposed to be approved by the board's personnel committee. There is no documentation indicating these raises were approved by the personnel committee. There were 22 raises in 2022, 50 in 2023, 28 in 2024. The average per year is $130,722. The new policy would budget $100,000 for merit raises. Department heads would recommend merit raises, and if approved by the CEO, the request would go to the personnel committee for approval. All raises would need to be submitted by July 1 of each year. One issue this policy will address is the appearance of favoritism. Five employees received merit raises in each of the past three years.
Video Record Board Meetings: Video recording all board meetings would be inexpensive and easy to accomplish, and multiple "good government" groups recommend it. Some of the municipalities represented on the OTB board are more than a two-hour drive from Batavia, making board attendance difficult for some interested parties. Recordings would be posted on the OTB website within 24 hours of the meeting.
Renewal of Buffalo Bills Suite: The current contract for the suite expires after the the coming season. The suite is considered a great marketing tool for Batavia Downs. The casino conducts drawings for tickets and also provides tickets to high rollers. However, the cost for suite in the new stadium will nearly double. During the past season, OTB paid $114,205 for 16 tickets per game. A new 12-person suite would cost $200,000 per year, with price increases of 5% per season. The return on investment would be low. The cost outweighs the benefits. OTB will try to negotiate a lower price suite.
Travel Policy: WROTB has been criticized for "extravagant" travel. While the spending on travel for some executives exceeded state limits, and a public benefit corporation, WROTB, is exempt from those caps. The comptroller recommends OTB implement and enforce policies that are reasonable. The new policy would require a form to be completed that lists all anticipated expenses for both in-state and out-of-state travel. For in-state travel, the CEO would review and potentially approve the travel. For out-of-state travel, if the CEO recommends approval, the board of directors would be asked to approve the travel.
Transparency of Procurement: For procurement of goods and services, currently, no quotes are required for costs less than $5,000, for $5,000 to $10,000, documented verbal quotes from at least two vendors, for $10,000 to $15,000, written quotes from at least two vendors, and for more than $15,000 public bidding that is subject to board approval. There are also policies dealing with sole-source procurement and single-source procurement. The new policy would require bidding on services and purchases of $15,000 (which is less than the requirement of municipal law). The reform also recommends a written policy for procuring goods an services that would clarify the difference and use of sole source and single source vendors.
Job Postings: An average of 73 jobs are posted annually, and most are posted internally. Jobs are posted on bulletin boards and if external candidates are sought, on social media. Under the reform, the process for applying through the OTB's website will be improved and all publicly advertised positions will be consistently posted on social media with a link to the Batavia Downs application page.
Tipping Policy: Batavia Downs does not currently have a tip-pooling policy, which can lead to operational, legal, and employee-related issues. The approved reform is to write a uniform tipping policy for the facility, including who is eligible to receive a portion of the tip pool, as well as policy for distribution and reporting tips for tax purposes. Supervisors will no longer receive a portion of the mandatory 20 percent tip for booked events.
Free Play Policy: The new policy will standardize free play coupons that an authorized person will sign. Upon redemption, a note will be made in the computer on who authorized the free play. This will assist in auditing free play. After March 15, only free play coupons created under the new policy will be honored.
Gift Card Tracking: Grocery and gas gift cards are used as an incentive for booking hotel rooms. In 2024, Batavia Downs purchased $160,000 in gift card, at $20 each. The gift cards were tabulated into the cost of rooms, so there was no additional cost to the corporation. Other gift cards can sometimes provided to the hotel for hotel packages or requested by officers or department heads to reward staff members for work done above and beyond their duties. Gift cards are logged but there is no standard approval process. Under the new policy, officers and department heads will complete a request form that will require approval by the chief administrative officer. A record will be maintained of gift cards requested by officers and department heads for future auditing purposes.
Download PDF: WROTB 2025 Reform Agenda.
