I
was shocked and stunned when hearing the news that the most
successful public-private partnership in Ontario's history was
ending, an unexpected and unexplainable decision that would likely
cost at least 30,000 jobs in the Ontario horse racing industry. What
was the rationale? It seemed the government had fallen victim to PR
types who told them the optics of ending a subsidy to horse racing
would be better than announcing cuts to schools and health care.
Guess what? The Ontario Government has announced $1 billion in cuts
to OHIP anyway and I am herein proposing a solution to reduce or
eliminate those cuts via a renewed partnership with Ontario's
horseman. The Slots At racing program currently contributes over $1.1
billion PER YEAR to the Ontario Government coffers, and the Liberal
plan is to reduce that to zero by March, 2013. I take a longer view,
so my plan involves increasing the number from $1.1 billion per year
to over 1.6 billion per year by 1018, or over 4.2 billion if we can
get Ottawa to let us open some Sports Books at Ontario racetracks. In
summary, I am proposing EXPANDING the Slots At Racetracks program, as
it has been a Godsend to Ontario from the moment it was created.
The
Burgess submission to OMAFRA is a much clearer analysis of the
current situation, and even though the proposals therein are too
vague to implement, the general suggestions are valid (eg any new
settlement must be tied to revenue from slots – the racino model).
Anyone
with a clear grasp of where we've been, understanding the magnitude
of the successes achieved, would look for ways to expand Slots At
Racing while also adding further casino and sports book facilities.
We have a $15 billion annual deficit in our province, and if Ontario
would like to rake in $10 billion or more from annual gambling
profits, here are the venues:
Community
Slots At Racing at all existing tracks incl restoration of Fort
Erie, Windsor and Sarnia. $1.3 to 1.5 billion annually. Estimate
1.4 billion annually.
Sports
Books at Woodbine, Georgian Downs, Rideau Carleton, Metro Convention
Centre, Fort Erie, Windsor, Sarnia and Western. $3.2 to 4.8 bil ann
Estimate
$4 billion annually.
Full
casinos at Woodbine and Metro Convention Centre. $3.3 to 5.5 bill
annually. Estimate $4.4 billion annually.
Total
annual provincial revenue estimated from the proposed new Community
Slots At Racing (CSAR), the Sports Books and Toronto Casinos: $9.8
billion
Even
considering the Slots At Racing program by itself, horsemen should
not be bargaining from a perceived position of weakness, as the
program is valued by and crucial to Ontario and municipal treasuries.
When Slots At Racetracks began, an
obligation was placed on the OLG to consult with the horse racing
industry (OHRIA specifically) and the ORC and develop benchmarks for
monitoring the progress and success of the Program on an annual
basis. As OHRIA abrogated this responsibility, and in fact has spoken
of the partnership in glowing terms, the sudden cancellation of SAR
is likely illegal in addition to being highly irrational and fiscally
damaging to the Province of Ontario.
Proposal
for modernizing Slots At Racetracks
2013-2014
extension: If a new agreement cannot be entered into before the end
of 2012, we are proposing a 2-year extension to the existing
agreement, as a way of protecting Ontario taxpayers from a
drastically increased deficit, and also, as OLG and the Government of
Ontario appears determined to wipe out racing in this province
without any concrete plan to replace the revenue currently flowing
into the provincial treasury. If there are going to be big changes
that negatively affect human lives, the two year extension to allow
for a transition is a way of ensuring fair and humane treatment for
the Ontario horse racing industry, including both human and equine
participants.
This
extension will ensure that if a new tri-partite (OLG, municipalities,
horsepeople) agreement cannot be worked out before the end of 2012,
government and industry revenues will stay in place and Ontario will
continue to receive over $1 billion annually from the horse racing
industry.
Let's
take a step back and realize that SAR is an extremely successful
PARTNERSHIP (rivaled only by the LCBO as a major contributor to
Ontario's treasury) and though the Ontario Government have been very
poor partners in 2012 (because they listened to a PR firm rather than
common sense), the partnership itself has been highly beneficial to
both sides and has the potential to continue doing so for decades to
come.
Here
is my proposal for renewing our Slots At Racing Partnership for the
ten year period from 2013-2022 (detailed Community Slots At
Racetracks proposal click here):
Existing:
2012
– 75% Province / 20% Track and Horsepeople / 5% Local Municipality
Proposed
new 10 Year Agreement (contingent upon re-opening Fort Erie,
Windsor and Sarnia, plus future two year notice of any planned
closures):
All
tracks:
2013
- 77 / 17 / 6
2014
- 78 / 16 / 6
Most
tracks:
2015
- 79 / 15 / 6
2016
- 79 / 14 / 7
2017
- 80 / 13 / 7
Years
6-10:
2018-22
- 80 / 12 / 8
2015-2022
Woodbine
/ Mohawk / Georgian Downs / Western Fair / Flamboro
77
/ 16 / 7
In
the Standardbred horse racing world a decade ago, the Meadowlands in
New Jersey was the top racing oval in the world. Now the Woodbine /
Mohawk circuit is number one (for both speed and money), yet the
Liberal government seems unaware of this world-beating success.
Standardbred yearlings bred in Ontario fetch over $70 million
annually.
New
York State has recently found copying Ontario's model to be a
lucrative new source of government revenues, raking in over $600
million last year in early stages of developing their program, a
valuable new revenue source for the government. Pennsylvania, Ohio
and other states also cite Ontario's industry-leading example in
launching racino operations in their States.
For
the Ontario horse racing industry to survive and thrive in the years
and decades ahead, two steps are required:
- Negotiate a new 10-year agreement for us to host slots at our racetracks. There are no other reasonable locations in Ontario for these facilities, and as soon as we begin negotiating from our actual position of strength, the OLG and the Government will have to come to the table with open minds.
- Ensure that any launch of a sports book in Ontario involves horsemen and racetracks, as we have the ideal location for these revenue machines.
In
summary, we need to first use any means necessary (including legal
action against OLG and the Ontario Government, and including Direct
Action such as “slow crawls” around Queen's Park and Casino
Niagara, and slowing down the 401 with similar planned action) to
bring the OLG and the Government to the table as honest business
partners, and to conclude a new agreement that I believe should
include a larger share of revenue for the local municipality.
Secondly,
after the Community Slots At Racetracks agreement is in place, we
must begin serious negotiations to be a valid and crucial partner in
developing a viable and lucrative sports book for Ontario.
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