Desperate Liberals relying on deceptive backroom deals
I
am saddened and dismayed by the lack of unity among Ontario horse
people, and particularly troubled by Woodbine Entertainment Group
(WEG) and OHRIA's apparent willingness to sell out the farm system
and their complicity in the province's plan to reduce the number of
racetracks from 17 to 7. Let's look back half a year to when our
difficulties began.
In
late winter of 2012, Ontarians were hit with two bombshells from the
Ontario Government within weeks, and the two events appear to be
inextricably linked. At the beginning of February the government
stunned GTA residents by announcing the closure of the much-loved
Ontario Place, and then at the end of the month they shocked the
Ontario horse racing industry by declaring the Slots At Racetracks
(SAR) partnership a dead duck, even though the program contributes
over $1 billion annually to Ontario's coffers and has been the OLG's
most consistent and biggest winner over the past decade.
The
Ontario Place and SAR debacles have served to take some of the
spotlight away from the provincial Liberals' E-Health
and Orange fiascos and diverted attention from Ontario's record $14
billion annual deficit, which will soon be $15 billion or higher if
the slots are removed from racetracks.
The
Beginning of the End
February
and March 2012 will go down in history as either the beginning of the
end of the McGuinty-led Liberal government, or it will mark the end
of an Ontario that embraces “community”, and be hugely symbolic
of the corporate takeover of our province.
Big
lie #1 - Ontario Place is dying, we must close it - Feb 2012
Fact:
Ontario Place attendance was up 89% lat year, and the park was in the
middle of a revitalization program that was meeting with great
success.
Big
lie #2 - We will transfer the 300 million dollar “subsidy” from
Ontario horse racing to hospitals and schools - Mar 2012
Fact:
The funds were never government revenues in the first place so cannot
be deemed a subsidy. The proposed strategy is impossible for that 300
million cannot be transferred if the program is ended and the money
goes away; the horsemen and racetrack share can be renegotiated,
however it cannot be transferred elsewhere. In reality, ending the
Slots At Racetracks partnership will serve to enlarge the provincial
deficit by $1.1 billion per year (the amount horsemen currently
provide to provincial government coffers as Ontario's share of our
business partnership agreement for slots on our land), as the OLG
have no plans in place to replace that revenue by the proposed
closing date of March, 2013.
The
municipalities that host the Slots At Racetracks facilities currently
receive 5% of the profits and this goes a long way towards balancing
municipal budgets and providing essential community services. By
de-funding Ontario municipalities through cancellation of the hugely
successful and mutually beneficial Slots At Racing business
partnership, the towns and cities are left in the lurch. The OLG have
no plans to replace this revenue next March, so in addition to
increasing the Ontario deficit by $1.1 billion in 2013, the Liberal
government is also taking $80 million out of the budgets of
communities across the province.
The
horse world was shocked and alarmed to hear of the sudden and
unprecedented closure of the slots facilities at Fort Erie, Windsor
and Sarnia (Hiawatha). The workers received 30-day notices and a
month later the buildings were closed, even though OLG is still
paying the tracks an amount equivalent to their slots revenues for
another year!
ALL of the remaining SAR facilities are scheduled to close in March,
2013.
OHRIA report and response from Burgess family
The
Ontario Horse Racing Industry Association (OHRIA) responded a few
months later with a detailed response that many in the harness racing
world felt failed to address the actual problem and therefore offered
flawed solutions. My own major problem with the OHRIA is that it
essentially asks for an annual subsidy, when mutually beneficial
business partnership agreements have been empirically proven to offer
a much sounder economic base. Subsidies can be changed or even pulled
at any time, and we have tremendous resources to offer both the
provincial slots industry, and the coming sports book betting market.
The B tracks being sacrificed on the big city altar (due to backroom
deals with Vegas mega-corporations) have contributed tens of millions
of dollars annually to provincial coffers and yet the OHRIA proposal
abandons them, which is unfair to the tracks, the horse people and is
detrimental to Ontario taxpayers.
The
Burgess Report, which came out in response to the OHRIA paper, is
more representative of sentiment in the harness racing camp. The
proposal by the son-father combo of Blair and Robert Burgess
accurately states that an equitable deal must involve some allocation
of slot machine revenues at the tracks. The current Ontario model is
being copied with great success in new York, Pennsylvania and other
states and the model is not going away, especially not with the
sports book coming. Many sports bettors already visit racetracks, and
for the rest, if they had an option to utilize a sports book at their
local track and/or a Woodbine Entertainment Group (WEG) or Canadian
Gaming Corp (CGC) operated website, they'd use both.
Returning
to the destruction and over-commercialization of Ontario Place that
appears to be well underway, things were not always so crass down
there. Throughout the 1970s and the 1980s the wonderfully egalitarian
Ontario Place Forum was host to summer after summer of legendary,
inspired concerts. Chuck Berry, Teenage Head, Neville Brothers, Bruce
Cockburn; it was a place of magical musical moments, and the
corporate atmosphere of the Molson Amphitheater rarely comes close to
the ambience that was offered by the Forum. If sanity returns and the
park re-opens, one way to bring back some of the fun would be to have
several concerts per week at Echo Beach that were included with park
admission.
First,
the closure of Ontario Place was announced, and justified by an array
of false, misleading and outdated statistics (see Òntario Place
Wasn`t Dying, by Bob Hepburn, Toronto Star, 09AUG). This
manipulated data was used to make a case that Ontario Place was
foundering and on its last legs, when in fact attendance had risen
almost 90% in 2011, with renovations and modernizations (including an
expansion of the water park for kids) setting the stage for further
increases in attendance and revenue in 2012. A brand new water slide
has never had a child slide down it, and the thousands of urban
families whose children previously bought Summer Fun passes were now
left without a major recreational facility, as were tourists visiting
Toronto. The closing of Ontario Place is an epic embarrassment
created by a pack of lies.
From Autumn 2010 through
late 2011, Ontario Place was being revitalized. Over
$10,000,000 in provincial capital funds were spent on the property
during this 12-month period. Among areas being refurbished:
-
The children's water park Soak City added a new water slide, a spa
pool and over 100 metres of new beach and walkways. None of this has
yet to be enjoyed by the public who paid for it.
-
A new ecology, conservation and animal care exhibit called
Eco-Learning Centre, which attracted 300,000 visitors in its first
year of operation.
-
The world`s first Imax Theatre, Ontario Place Cinesphere, was
restored and upgraded with a new digital projector plus a new sound
system, seating, concession areas and interiors.
On
February 1, 2012, the Government announced closure of the public
areas of the park, for redevelopment scheduled to be completed in
2017. Yet nobody had or has agreed on what is to be built, and to add
insult to injury, three of Toronto`s top architectural firms have
submitted beautiful and leading edge plans (I work in the industry
and have viewed one proposal) to expand and redevelop the park as a
world-class community, family and tourism facility, and these have
all been kept secret and unreleased by the Liberal government.
Shockingly, in recent weeks the Liberals have announced plans to
build CONDOS on the west island of this PUBLIC PARKLAND!
Returning to the origins
of the attack on horse racing, let`s take a step back a few years and
examine some of the problems OLG has had with its casinos in Niagara
Falls (they opened a second one and forgot to close the first one,
leading to huge overhead), and Windsor (they chose such an unstable
partner that they were forced to lend Caesars $170 million to upgrade
the facility), which will provide historical context for
understanding why Fort Erie, Windsor and Sarnia were first targeted
by the OLG and their Ontario Government in their unprecedented attack
on Ontario`s world-leading harness racing industry. Fort Erie and
Windsor were closed to cover up casino mismanagement and a foolhardy
attempt to lower losses in Niagara and Windsor, while Sarnia was
closed because OLG needed to boost their Point Edward Casino (which
was being outperformed by the slots at Hiawatha Racetrack) numbers
and Sarnia also has a mayor (Mike Bradley) that was willing to
organize Ontario mayors last year and challenge the OLG when they
tried to claw back a portion of the 5% that municipalities currently
receive from Slots At Racing.
The
OLG wants to cancel the SAR program AND re-allocate the money, which
is technically impossible because if the program doesn't exist in the
future, then there is no money to re-allocate. The OLG imagines that
their new partners will somehow be more beneficial to Ontario, so
let's examine who they want to do business with. The slots are
currently hosted by
the primarily not-for-profit Ontario horse racing industry and this
business deal provides over $1 billion per annum to Ontario, as the
province gets a 75% cut of all profits. The new plan involves
partnering with Tanenbaum's bingo parlours (Boardwalk Gaming, which
will take 47% versus racetracks and horsepeople share which is 20%
total), and reduces the province's take from 75% down to 20-25%.
Also, do we really want slot
machines in residential neighborhood bingo parlours, after being
snuck in under the guise of bingo hall Trojan horses?
The
province is also being courted by giant USA casino companies, who
have already told the OLG they cannot be expected to operate on the
measly 20% that tracks and horsemen get, and they are looking for at
least half the pie. Instead of paying 20% of net profits back into
the Ontario economy via 17 racetracks and 60,000 horsemen, the OLG
will pay 50% or more of profits to the likes of MGM Resorts, Caesar's
(troubled, debt-burdened operator of Windsor Casino) and Sands (CEO
Shelley Adelson of Las Vegas Sands is anti-union and the biggest
financial supporter of Newt Gingrich and Mitt Romney; Sands and
Adelson are also under investigation for bribing government officials
in China), while Ontario rural communities will become ghost towns.
Poverty,
addiction, foreclosures on the way
All
that money leaving Ontario for Vegas means the end of the multiplier
effect. While it is true that racetracks and horsemen receive $300
million annually from the agreement, that money is spent in Ontario,
generating over $200 million of income tax, sales tax and other
economic benefits to the province, in addition to the $1.1 billion
horsemen provide directly to the provincial treasury each year via
SAR. If Ontario chooses centralized, foreign-owned mega-casinos
rather than continuing a mutually beneficial business agreement, the
pain will be felt by more than just Liberals running for re-election.
Poverty, addiction, foreclosures and higher social and medical costs
will be the result of such a near-sighted and uneconomic strategy.
It
is important to understand the closings of Ontario Place and the SAR
program in the context of pending federal legislation that will allow
the operation of sports betting books in Canada. Vegas is spending
big money to get in on this action and if
they are successful, their inclusion will mean Ontarians lose tens of
thousands of jobs and billions of dollars in annual revenue.
Every year, several billion dollars that should be going to Ontario's
treasury and to the economies of cities and townships across the
province will instead go to Las Vegas accountants, lawyers,
shareholders and corporate executives. The
financial resources that now go toward making our province functional
and enjoyable are proposed by the OLG and the Ontario Liberals to go
to paying the executive salaries, interest charges and dividends of a
few large US-based corporations. Transitioning
from a well-functioning and equitable province-wide system to a few
giant casinos operated by American companies will be nothing less
than the sellout of small town and rural Ontario, and Ontarians will
pay the price for generations.
Ontario horse racing
tracks such as Woodbine, Mohawk, Georgian Downs, Fort Erie, Windsor,
Flamboro, Hiawatha, Rideau Carleton and Western Fair are all ideal
locations for a sports book operation, in addition to Niagara Falls
and the proposed Metro Convention Centre casino in downtown Toronto.
This would appear obvious to most Ontario horsemen and gamblers, yet
the confluence of the sudden closure of Ontario Place and the
cancellation of the hugely successful SAR partnership (rivaled only
by the LCBO as a major contributor to Ontario`s treasury) would make
one wonder if Vegas money is already influencing OLG bureaucrats the
public counts on to provide unbiased advice to the Government of
Ontario.
The
OLG has proven they can lose money operating casinos, however sports
book betting, if properly diversified across the province, has the
incredible potential of returning money to Ontario that currently
goes to offshore websites like Betfair.com and Bodog.com. In this
scenario, if even a portion of the online gambling from Ontario that
is already taking place is re-directed to websites that provide a
small percentage (eg 0.5%) to preserve racetracks, then that money
will re-circulate again and again within our province. In addition to
operating physical sports books at their tracks, WEG (Woodbine,
Mohawk, Fort Erie) and CGC (Georgian Downs, Flamboro) could each
build and operate an online sports book that also contributes to the
B tracks. If slots are restored and extended at Ontario racetracks,
and physical and web-based sports books are added into the mix, the
Ontario horse racing industry will soon be able to offer upwards of
$3 billion per year to Ontario's treasury, up from the $1.1 billion
Ontario horse people currently provide annually.
The sudden closures of
both Ontario Place and the Slots At Racing program indicate heavy
lobbying by Vegas interests ahead of the legalization of a sports
book in Canada. The Slots At Racing partnership between Ontario
horsemen and the OLG has been a huge success for the people of
Ontario, providing over $10 billion to the Ontario Treasury during
the past decade, with the remainder of funds generated being
re-invested in Ontario communities and the agricultural sector.
Hundreds of millions in income taxes and sales taxes are paid by the
60,000+ employed full or part-time in Ontario horse racing, and about
half of these jobs are at risk because of current government plans,
which would likely see closures (or severely reduced race dates) of
racetracks such as Fort Erie, Windsor, Sarnia, Sudbury, Dresden,
Hanover, Grand River, Woodstock, Qunite and Kawartha Downs.
In 2006 and 2007 the OLG
brought in new management to overcome the insider lottery wins
scandal, and after those folks ran up big expense accounts in 2007
and 2008, another management shakeup took place in 2009. Throughout
all of the troubles at the OLG, the Slots At Racing partnership has
provided the largest revenue streams in the most consistent,
trouble-free manner. The story reminds one of when the CBC canceled
their number one rated show, Don Messer`s Jubilee (live from PEI). At
the time it was the network`s most profitable and most popular show,
but other CBC producers grew tired of explaining why they could not
produce such numbers with a similar $25,000 per program budget. The
CBC killed off a golden goose to make their other shows look better,
and the OLG is attempting to kill of Slots At Racing as a way to
cover up its casino incompetence and pave the way for
Vegas-controlled gambling in Ontario.
Dale Lastman (Larry
Tanenbaum's lawyer) was appointed to the OLG Board of Directors in
2010, and less than two years later, the SAR agreement that pays out
10% to mostly not-for-profit racetracks and 10% to Ontario horsemen
(via race purses) was being canceled in favour of a new agreement
that pays Tanenbaum's Boardwalk Gaming (a bingo hall company
back-dooring its way into slots) 47%, vastly reducing the share for
the Ontario treasury. Coincidence, or more evidence of a corporate
takeover of our province?
There is a serious risk
of the big players in Ontario's horse racing industry striking
separate deals with the OLG and essentially hanging the smaller
tracks out to dry. This strategy (see the OHRIA Report) has the
industry begging for a $200 million annual handout while also
accepting track closures across the province. What can be done to
prevent this disastrous outcome? Here's the existing arrangement:
Existing
arrangement:
2012
– 75% Province / 20% Track (10%) and Horsepeople (10%) / 5% Local
Municipality
Ontario and the horse
industry must agree in coming weeks to do one of two things:
A)
Agree to a two-year extension of the existing Slots At Racing
partnership. This will allow time for cooler heads to prevail, and
provide ample opportunities for the racing industry, the local
municipalities and the provincial government to come to mutually
acceptable terms on a new deal.
OR
B)
Replace the existing structure with a 10-year agreement designed to
shift more of the slots dollars generated into the provincial
treasury and into local municipal budgets (increasing them to 7-8%
from current 5%), while also providing a small percentage to
racetracks and horsemen for agreeing to host and operate sports
betting books at racetracks.
Giving up a billion plus
a year guaranteed in exchange for a few bingo halls and a waterfront
casino dream was never the real story of the OLG / Ontario Government
announcements, as the pending arrival of the sports betting book
casts a shadow over all their excuses and deceitful plans to
“modernize” (read “sell out to Americans”) the provincial
gambling industry. There is zero chance that OLG will give up its
$700 million per year from Woodbine Entertainment Group, so you know
Woodbine and Mohawk slots are safe. OLG would also like to strike a
deal with Canadian Gaming Corp, so Georgian Downs and Flamboro will
escape the chopping block. The question now is, will horsemen from
the big tracks support the B tracks that feed into the system, and
will they protect Ontario taxpayers and the tourism industry by not
letting the SAR program end without at least a two-year extension to
explore alternatives that would save the regional, more rural tracks?
Ontario is the leading
Standardbred horse racing market on Earth, and the overall horse
racing industry employment would continue growing if not for
government interference, deception and the illegal, premature ending
of a business partnership agreement that the Government was obligated
to review and report on every year, which it did not do. As recently
as 2010 both the OLG and the Ontario Liberals were praising SAR as
the model public-private partnership that it is.
If we build on the
existing Slots At Racetracks agreement by extending it and expanding
it, provincial government revenues can rise to over $1.5 billion per
year (current rate is $1.1 billion annually from us) from our
partnership, even before any sports book revenue is added, and also
while increasing the existing 5% rate for local municipalities to the
7 to 8% range. By reinforcing our world-leading position in
Standardbred racing and world-class, highly prominent status in
Thoroughbred and Quarterhorse racing, the net result will be growth
in horse racing industry jobs plus more revenues for local tourism,
municipalities and the provincial treasury.
Whether we achieve a
two-year extension to the current SAR deal or sign a new ten-year
agreement, something needs to be done to prevent the devastation that
closing many racetracks will wrought, as tens of thousands of jobs
and dozens of communities are at risk.
As
things stand, the
OLG is out of control and they are attempting to sacrifice rural and
small town Ontario to cover up their massive casino mismanagement.
Unfortunately, the provincial Liberals have bought into this madness,
and though the Ontario Government is hanging by a thread, so we are
suggesting, as a first step, they announce a two-year extension to
the current deal as a sane stopgap until longer term agreements can
be entered into.
Their
current plan involves shutting down efficient, lucrative,
made-in-Ontario solutions to bolster OLG's money-losing and unwanted
foreign-owned casinos and bingo hall dreams, and that will not go
over well with voters. It is a preventable train wreck that can be
avoided if clear-thinking taxpayers in Ontario revolt and put a stop
to the OLG's muddled thinking and misguided proposals.
Please call, write or
email your local MPP and ask that Ontario's horse farms, historic
racetracks and rural tourism industry be preserved via an extension
of SAR. The Slots At Racetracks program provides over $1.1 billion
per year to our provincial treasury, and with an annual deficit now
exceeding $14 billion, Ontario cannot afford to increase the deficit
further by prematurely ending the highly rewarding and widely
beneficial SAR joint venture.
Joe Trainor is a
former Standardbred horse owner and is the Publisher of Horses and
Hockey Blog.
