Michael Burns

Ontario Report: Changes Ahead for Racing

Thoroughbred race dates and purses would be cut to make racing self-sufficient.

By Alex Campbell

Cutting the number of Thoroughbred race dates in Ontario and reducing purses are some of the recommendations put forth by the government commissioned Horse Racing Transition Panel in a final report released to the public Oct. 30.

Based on the proposal, "A" level Thoroughbred racing, presumably at Woodbine, would see slight decreases in race dates and purses when compared with the other sectors of the racing industry. The panel has proposed a race meet of 160 days, down 3% from 2011 figures, with total purses of $64 million, a decrease of 14% when compared with the $74.4 million distributed in 2011.

"B" level Thoroughbred racing, on the other hand, would see only 30 days of racing compared with 78 days in 2011, with purses of $3 million, a decrease of 52% when compared with the $6.2 million distributed in 2011. With Fort Erie Racetrack still set to close this December, the proposal names Ajax Downs, now a Quarter Horse-only track, as a possible replacement track should Fort Erie not be able to operate live racing in 2013.

The panel, made up of three former provincial cabinet ministers and set up by the Ontario government to determine how best to move the province's horse racing industry forward after the cancellation of the slots-at-racetracks program, also recommends that purse distribution be tied to pari-mutuel handle to ensure the sustainability of the industry long-term.

The province's Standardbred racing industry would be the hardest hit, seeing race days cut by 54%, from 1,262 to 580, and purses reduced by approximately $95 million, a decrease of 60% from current levels.

"Today, the industry's economic engine is largely fueled by a revenue source unrelated to its core business, which is to provide a racing experience attractive to customers," the panel said in its report. "Under the proposed Sustainable Horse Racing Model, the size of purses and the number of race dates will be determined by the amount of pari-mutuel handle available.

"Racing opportunities will be able to increase or decrease in response to consumer demand."

The panel indicated it received a proposal from six racetracks throughout the province that would make up a racing alliance. The alliance would serve as a central racing secretariat that would be responsible for assigning race dates and purses, while also being responsible for the branding and marketing of the Ontario racing product.

The panel also acknowledged that government support would be necessary to transition the industry away from the slots program. Along with establishing a reserve fund for initial racetrack support, the panel also recommends that the government allow the horse racing industry to offer new gaming products at racetrack facilities such as single-game sports wagering, horse racing-related lotteries, and Instant Racing.

"The products discussed do not yet exist in Ontario and, therefore, are not currently producing revenue for the government," the panel noted. "Moreover, it will take effort, resources, and expertise to develop them, which the horse racing industry is willing to provide."

Other recommendations included capping the amount of funding to the Horse Improvement Program and the Ontario Sires Stakes program at $30 million per year and monitoring any funding issued to the industry every three years against industry-wide metrics.

"It is essential to avoid repeating the mistakes of the slots-at-racetracks program, which turned over funds to the industry with no strings attached," the panel said. "Monitoring should be ongoing to ensure the investment is meeting public-policy objectives and delivering no more funds than necessary to do so."

The report did not reveal the amount of transitional funding the government should put into the industry, however.

"We feel strongly that publicly releasing some of the estimates, particularly sensitive financial information concerning the amount of public support required for racetracks, would not be in the public interest today," the panel said. "We advise that this information should be withheld until such time as the government and the industry have concluded their negotiations."

Responding to the final report, the Ontario Horse Racing Industry Association emphasized the need for negotiations to get under way immediately.

"While the panel's new Sustainable Horse Racing Model leaves many questions unanswered, OHRIA believes this is an opportunity for the industry to commence meaningful negotiations directly with government," the association said in a statement. "There are certainly elements of the model that need to be better understood, adjusted, and modified, but the panel has assured OHRIA that based on this model the government is prepared to enter into good faith negotiations with our industry.

"As our industry continues to crumble around us, OHRIA can't sufficiently state the urgency for these negotiations to commence immediately."

James Lawson, chairman of Woodbine Entertainment Group, released a statement upon WEG reviewing the Horse Racing Industry Transition Report and discussing it at its board of directors meeting Oct. 31.

"Woodbine Entertainment Group is pleased that the Horse Racing Industry Transition Panel has reaffirmed that a vibrant, world-class horse racing industry requires a strong partnership between the industry and government," Lawson said. "This includes the industry becoming a vital component of Ontario's provincial gaming strategy.

"The report itself contains a number of concepts and details which require a better understanding in order for WEG to comment more fully. WEG will work with its industry partners in order to ensure that race dates at its tracks are optimized based on available purse money, horse supply, customer demand, and Woodbine's financial resources to conduct live race dates.

"WEG anticipates that the proposed model will evolve through further discussion and negotiation in order to ensure the desired outcome: a successful and sustainable horse racing industry in Ontario."