To
be honest, within hours of comprehending fully the OHRIA report, I
was so furious my heart was beating fast and I was pacing my house.
This was the much-awaited "industry" response to OLG's
announcement of the sudden ending of the hugely successful Slots At
Racing partnership, which contributes over $1.1 billion annually to
Ontario's coffers, money need for schools, hospitals, roads and
bridges. Unfortunately, though the report defends the Ontario Horse
racing industry reasonable well, the proposed solutions represent a
centralizing power grab that sacrifices almost all of the small
tracks in Ontario in pursuit of big city revenues, while ignoring the
crucial "feeder" aspect of B tracks that makes our racing
world class.
The
severest limitation of the OHRIA report is that it does not call OLG
to task for its obvious efforts on behalf of Toronto developers (who
want to turn the family-oriented Ontario Place into a Vegas-operated
casino) and Las Vegas mega-corporations. By sacrificing rural and
smalltown slots, OLG is hoping to mask over its own casino
mismanagement problems and set the stage for development of a sports
book without horse racing partners. In essence, the OHRIA report does
not defend the Ontario taxpayer from a boneheaded and severely costly
decision that proposes to take billions of dollars currently spent in
Ontario every year, and send them off to American interests. It also
does not discuss the illegality of OLG's actions and the possible
need for a lawsuit and/or direction action against OLG and the
current Ontario Government.
By
proposing a 41% reduction in racetracks (17 to 10), a 45% reduction
in purses and then asking for a $200 million annual subsidy (eg
minus 40% from SAR levels), the OHRIA response proposes turning
Ontario horse racing into a heavily-subsidized (and thus hugely
vulnerable to further cuts) industry, whereas the partnership model
is serving everyone very well.
OHRIA's
plan is defeatist and in the end calls for enough purse money to keep
7 to 10 racetracks operating, with the money for purses flowing
through OHRIA:
First,
it is proposed that a new fund, the Ontario Development Fund, should
be created primarily to support overnight purses and live racing
days. This fund would replace current slot revenue. The Fund would be
administered by OHRIA that will determine how the funds should be
allocated.
The
problem here is that OHRIA doesn't deal with these facts:
-
the OLG and the Ontario Government have canceled Slots At Racing yet
have no firm plans in place to generate the $1.1 billion annually
from another viable source
-
the proposed OHRIA "solutions" do not address the FACT that
it is deeply and profoundly misguided to end the most successful
private-public partnership in Ontario's history. It will be much more
beneficial to Ontario taxpayers to strengthen and improve the Slots
At Racing program rather than eliminate it.
-
the planned OLG / Ontario Government switch from working with 17
mostly rural and smalltown municipalities to a giant casino program
run by one or two Las Vegas firms is enormously detrimental to
Ontario citizens and taxpayers.
In
this proposal, OHRIA is also looking to be the arbiter of who gets
race days and how many they get:
Based
on a demand approach, a sensible number of race dates in the future
for the new model would be 167 Thoroughbred dates(down from 243 in
2012),600 Standardbred dates (down from 1252 in 2012) and 30 Quarter
Horse dates (down from 45 in 2012). Total race dates under the new
model would be 797, down from 1,540 in 2012.
As
for Standardbred race dates, we anticipate that there will be three
levels of racing. viz. Premier, Signature and Grassroots. OHRIA
should make the decision as to how the dates should be allocated to
the standardbred tracks that survive. Depending on the number of
and the specific racetracks, a possible allocation would be 200
Premier dates, 300 Signature dates and 100 Grassroots dates. Horse
supply will also be an important consideration.
I
would ask, WHY is it sensible to cut race dates in Ontario by 50%???
I would also ask WHY is OHRIA more equipped to allocate race dates
than the current ORC?
Finally,
though it is admirable that OHRIA is seeking $210 million annually
(70% of current funding) from the Ontario Government as a way to
retain 55% of race dates, the problem is that the approach confirms
the Government's view that this is a subsidy and now seeks to tie
this amount to the number of race dates, which is a beautiful
formula for the Government to propose even further reductions of
race dates in the future, as a way to decrease the "subsidy".
OHRIA's
plan calls for massive concentration of power in their hands and
near-total dependency on a range of Government programs and
departments:
However,
given the significant contribution that government will make to the
Development Fund and the HIP, it should have representation on the
Board of OHRIA. With up to three
government
appointed Board members, government will have a direct voice in the
decisions of OHRIA and will be in a position to assist the industry
in dealing with broad policy issues, objectives and public interest
considerations.
The
Board will be in a position to decide on all economic industry issues
and disputes among its stakeholders including the fixing of race
dates and starting times, the allocation, structure and
administration of the Development Fund and HIP, the oversight of the
expenditure of funds generated by the reduction of the tax on
pari-mutuel wagering instituted in 1996, the branding of horse racing
and the development of a comprehensive industry marketing strategy.
In
addition, OHRIA would be responsible for developing industrywide
benefit plans for individuals and education, training, research,
accreditation and horse-ownership programs.
Also,
do the authors actually believe that a centralized bureau can write
more realistic race conditions that the local track stewards? And do
they also believe that horsepeople can just bring their racehorses to
any track in Ontario that offers the appropriate conditions? This
paragraph is very puzzling to me:
The racetracks could
create a central race secretariat that would write the condition
sheets, accept entries and position horses in their proper class.
This would result in a sensible distribution of the available horse
population. Such a secretariat could utilize an 800 telephone number
and the internet to accept entries. The Alliance could also
negotiate single service contracts such as tote, video patrol,
satellite fees, race program production, etc. Costs would be shared
by Alliance members.
That
sounds like a recipe for disaster...
While
surely genuine, the OHRIA response serves to legitimize OLG's
draconian, illegal and short-sighted maneuvering. I realize we are
all on the same team, and do appreciate the effort of the OHRIA to
comer up with some sort of coherent response, but the effort falls
flat. The bottom line to me is the $1.1 billion our industry provides
directly to the Ontario taxpayers (including over $600 million from
WEG alone) every year, via SAR. I want to grow this contribution from
provincial horsemen because Ontario's 2012 deficit is projected at
$15 billion. I would also like to see the portion for local
communities increase, in addition to an increase for the province. I
am proposing a 10 year contract renewal including a 5 year transition
from the current split, which is 75% Province / 20% Horsemen / 5%
Local Community, to a new 80/12/8 division, bolstering the
communities that will host SAR and the new sports books. Here is
a link to new proposal for growing Slots At Racing
partnership in Ontario, with a new Community Slots at Racetracks
(CSAR) partnership.
Slots
At Racing needs to be preserved and expanded because it rivals LCBO
as the two most successful public-private partnerships in Ontario
history. Our participation in this plan provides massive benefits to
the Ontario taxpayer and to local communities. The OLG and the
Ontario Government are trying to cut the horse racing industry out of
slots and sports book revenue, when ANYBODY who knows anything about
gambling will tell you it makes the most sense to keep the slots and
the sports book near the horsemen, as that helps to limit problems
and ensure things run smoothly. OLG loses money at their casinos, yet
Slots At racing is massively profitable. The Ontario taxpayer cannot
afford either the OLG operating more casinos or, even worse, one or
two big Las Vegas companies getting all that money currently staying
in Ontario.
By
strengthening the existing program and tilting the partnership toward
directly providing funds for local communities, we will come out of
this with a better province and stronger towns. The Community Slots
At Racing agreement proposes increasing the local share by 60% (from
5% to 8% over 4 years), which means the money flowing into municipal
coffers will grow from the current $80 million (proposed to go to
zero by the OLG) to $130 million or higher by 2016. In addition, I am
soliciting support from horsemen to agree to have our own share
reduced from 20% to 12% over 5 years, in exchange for re-opening Fort
Erie, Windsor and Sarnia slots and for capital investments
allocations from both parties. The basic premise is that local
communities and the province's taxpayers all guaranteed a larger
share of the pie, and for horsemen, there remain two large
opportunities to grow the overall pool.
The
first opportunity for horsemen is to continue to promote Ontario's
world-class racing and breeding product, and building a wider, more
knowledgeable fan base. The second opportunity involves two aspects.
The obvious one is that the more people horsemen can get out to big
race nights, the more slots revenue for everybody to benefit from.
The elephant in the room is the sports book, and it will benefit
Ontario much more if two books are operated, one by the
not-for-profit Woodbine Entertainment Group (WEG, owner of Woodbine
and Mohawk racetracks) and the other by Great Canadian Casinos (GCC,
owner of Georgian Downs and Flamboro Downs).
Let's
get a Community Slots At Racetracks agreement done by Autumn 2012, to
provide a solid underpinning for the industry. After the foundation
is restored and strengthened, then we will move on to the task of
getting sports books for Mohawk, Woodbine, Fort Erie, Windsor,
Western Fair, Flamboro, Georgian Downs and Rideau Carleton. These 8
tracks have the potential locations to contribute another 2 to 3
billion annually to Ontario's coffers, and websites to be run by WEG
and GCC could add a similar amount on top of the on-track
contributions.
In
summary, let us strengthen the existing horsemen-government
partnership and create Community Slots At Racing, improving upon and
expanding a program which already provides $1.2 billion to
provincial and local community coffers. Then we can present our
plans to contribute another $4-6 billion annually via operation of
the Ontario sports book. This 5 to 7 billion per year will go a long
way towards balancing Ontario's budget, which is currently running a
$15 billion deficit (that is scheduled to get bigger if Slots At
Racing's revenue is canceled via closure).
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