Ontario Place and Slots At Racetracks closings linked

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.

3 Year Old Pacers gun for record at Brandywine

Post position order for the Battle of the Brandywine


by Ken Weingartner, Harness Racing Communications

Freehold, NJ --- If the recent past is an indication, there will be no lack of speed in Sunday’s $500,000 Battle of the Brandywine for 3-year-old male pacers at Harrah’s Philadelphia.

A Rocknroll Dance, the 2-1 morning line favorite, enters the race off a second-place finish to Bolt The Duer in the Adios Stakes on July 28 at The Meadows in western Pennsylvania. Bolt The Duer won in 1:47.4 -- the fastest mile ever on a five-eighths-mile track -- after A Rocknroll Dance led through fractions of :25.1, :52.4 and 1:19.2.

The 1:19.2 for three-quarters of a mile also was an unprecedented time at The Meadows.

One week later at Meadowlands Racetrack in New Jersey, Hurrikane Kingcole paced the fastest three-quarters of a mile in harness racing history when he led the field to a 1:18.2 clocking in the New Jersey Classic. Hurrikane Kingcole, the 3-1 second choice in the Battle of the Brandywine, ended up defeated by a head by Panther Hanover in 1:47.2.

“We’re just going to have to teach him to go another 26-second quarter on the end,” Hurrikane Kingcole’s trainer John McDermott quipped.

Maybe it will happen Sunday, when the Battle of the Brandywine stakes record of 1:48.4 set by Rock N Roll Heaven in 2010 seems in jeopardy.

“He’s really sharp,” McDermott said about Hurrikane Kingcole, who has won four of 11 races this year and earned $198,284 for owners Jeffrey Kuhen, John Levy Racing, Arthur Brewer II, Mitchell Cohen, Jeffrey Gordon, Jonathan Klee, and Hurrikane Racing.

“He enjoyed his week off. I brought him (to Harrah’s Philadelphia on Tuesday) so he could see the paddock and go over the track a few times. He was a little high strung, but he usually does that the first few times he sees a paddock. Hopefully on Sunday he’ll be nice and relaxed and ready to roll.”

If he is ready to roll, hold on. McDermott was unsurprised by his colt’s burst of speed in the New Jersey Classic, having long proclaimed Hurrikane Kingcole the fastest horse he has ever seen.
“I knew that was going to happen if he got revved up behind the gate the way he did,” McDermott said. “It’s not easy to stop that horse once he starts rolling.”

The only question is how to get that final 26-second quarter.

“You just keep praying,” McDermott said, laughing. “How did I get him to do the first three? That wasn’t me, that was him. I knew for sure that he had that in him. It’s just a case of putting it all together. He’s a very special horse.”

A son of Cam's Card Shark-Blazing Yankee, Hurrikane Kingcole’s biggest win this season came in the $100,000 consolation of the Meadowlands Pace, which he captured in 1:47.3.

The $600,000 Meadowlands Pace championship was won by A Rocknroll Dance.


Owned by A RockNRoll Dance Stable, headed by trainer Jim Mulinix, the colt has won 10 of 21 career races, finished second on seven occasions, and earned $1.51 million. Last year, he won the $510,000 Governor’s Cup at Harrah’s Philadelphia.

A Rocknroll Dance’s start in the $500,000 Adios was his ninth consecutive week of racing, with his final eight starts in the span timed in 1:49.3 or faster.

“He seemed to freshen up pretty good,” Mulinix said about A Rocknroll Dance’s three-week layoff. “I didn’t do a lot of training with him. I trained him this week, but otherwise I just jogged him plenty and got him turned out a lot. He feels pretty good.”

Mulinix was impressed with A Rocknroll Dance’s effort in the Adios, which started from post six in the six-horse field.

“He didn’t have a good post and he got punished pretty good when he left (for the lead),” Mulinix said. “I was proud when he came around the last turn and was still trying. (Bolt The Duer) had a clean shot in the passing lane. I wish we could have gotten a little more of a breather, but I was proud of him to be second.

“It’s hard getting beat in those kinds of miles, but I think he answers the bell more consistent than about anybody. He always seems to show up and we never dodged anybody.”

Yannick Gingras drove both Hurrikane Kingcole and A Rocknroll Dance in their most recent starts, but will be going with A Rocknroll Dance -- a horse he has driven regularly since last September -- in the Battle of the Brandywine. Daniel Dube will drive Hurrikane Kingcole.

The Battle of the Brandywine also features Art Rooney Pace winner Pet Rock, New Jersey Sire Stakes champion Time To Roll, and 2-year-old divisional champion Sweet Lou.

“It’s going to be a great race,” McDermott said. “I’m sure they’re going to have (the track) in the best condition they can on Sunday. The competition is going to be top notch.”

Here is the field in post position order for the Battle of the Brandywine, with drivers, trainers and morning line: 1. Steelhead Hanover, Joe Pavia Jr., Pavia Jr., 12-1; 2. Time To Roll, Ron Pierce, Jimmy Takter, 8-1; 3. Hurrikane Kingcole, Daniel Dube, John McDermott, 3-1; 4. A Rocknroll Dance, Yannick Gingras, Jim Mulinix, 2-1; 5. McErlean, David Miller, Trond Smedshammer, 10-1; 6. Pet Rock, Brian Sears,Virgil Morgan Jr., 5-1; 7. Shady Breeze, Tim Tetrick, Judith Welty, 15-1; 8. Sweet Lou, Dave Palone, Ron Burke, 6-1.



Source: http://xwebapp.ustrotting.com/absolutenm/templates/article.aspx?articleid=49840&zoneid=1

Community Slots At Racetracks (CSAR) - 2nd Draft Proposal

As the OLG and the Ontario Government are attempting to shut down the very popular and immensely successful Slots At Racing program with little understanding of the fiscal and social consequences of a such an act, I am hereby proposing that we decide 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.

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 joint venture itself has been highly beneficial to both sides and has the potential to continue doing so for decades to come.

Our goal is to have the following 6 partners endorse this proposal and collectively present it to OMAFRA for consideration by OLG and the Ontario Government:

Woodbine Entertainment Group

Great Canadian Gaming Corp

Ontario Harness Horsemen Association

Canadian Thoroughbred Horse Society (Ontario)

Association of Municipalities of Ontario

Tourism Industry Association of Ontario

It would obviously be ideal to have OHRIA on board from the beginning, however our goal is to first find an agreement suitable to the above 6 partners, and then have it approved by the OHRIA before submitting to OMAFRA and releasing to the public.

Existing arrangement:

2012 – 75% Province / 20% Track and Horsepeople / 5% Local Municipality

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, as OLG and the Government of Ontario appear determined to wipe out racing and slots 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 people's 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.

OR

Even though a two-year extension would be a much-valued reprieve for both the industry and the OLG, ideally all parties can come to the table with positive energy and fresh ideas to strike an agreement bolstering provincial and municipal treasuries.

Proposed new 10 Year Agreement 2013-2022 (contingent upon re-opening slots at Fort Erie, Windsor and Sarnia, plus future two years notice of any planned closures, including consultations, plus inclusion in discussions regarding launch of sports book in Ontario):

Proposed 2013:

All Ontario tracks:

77 / 17 / 6

2014:

77 / 16 / 7

2015:

Most tracks:

78 / 15 / 7

BIG 6: Woodbine / Mohawk / Georgian Downs / Western Fair / Flamboro / Rideau Carleton

77 / 16 / 7 (2015-22)

2016:

Most tracks:

78 / 14 / 8

Woodbine / Mohawk / Georgian Downs / Western Fair / Flamboro / Rideau Carleton

77 / 16 / 7

2017:

Most tracks:

79 / 13 / 8

Woodbine / Mohawk / Georgian Downs / Western Fair / Flamboro / Rideau Carleton

77 / 16 / 7

2018-2022

Most tracks:

80 / 12 / 8

Woodbine / Mohawk / Georgian Downs / Western Fair / Flamboro / Rideau Carleton

77 / 16 / 7

The reason the Big 6 are proposed to operate under a different arrangement is twofold:

A) As they are more urban tracks, they have higher operating costs and purse requirements.

B) As they are located closer to larger urban centres, the slots revenue comprises a smaller percentage of local municipal budgets. The portion for local municipalities rises from 5% to 7% for the Big 6, whereas it rises from 5% to 8% for the 11 tracks in smaller markets.

The OLG is out of control and they are attempting to sacrifice rural and smalltown Ontario to cover up their massive casino mismanagement. Their plan involves shutting down efficient, lucrative, made-in-Ontario solutions to bolster their money-losing and unwanted foreign-owned casinos and bingo hall dreams. 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 respond with any endorsements or detailed suggestions for improving the viability of this proposal, thanks kindly.

Joe Trainor, Publisher

Horses and Hockey Blog

Related links:

The Future of Ontario Horse Racing by Joe Trainor

Limitationsof the OHRIA Report by Joe Trainor

OHRIA Report to OMAFRA

Burgess Submission to OMAFRA

The Future of Ontario Horse Racing

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:

1. 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.

2. 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.

Related links:

Limitations of the OHRIA Report by Joe Trainor

Community Slots At Racing Partnership Proposal

OHRIA Report to OMAFRA

Burgess Submission to OMAFRA

Limitations of the OHRIA Report

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).

Related links:

The Future of Ontario Horse Racing by Joe Trainor

Community Slots At Racing Partnership Proposal

OHRIA Report to OMAFRA

Burgess Submission to OMAFRA