Fort Erie to Lose Slots But Vows to Race

The Ontario track is one of three at which a slots-at-racetrack program will end.

By Alex Campbell

Just two days after the Ontario Lottery and Gaming Corp. announced it will end the slots-at-racetracks program in the province in March 2013, the organization acted swiftly by revealing March 14 that slots parlors at Fort Erie Racetrack & Slots, Windsor Raceway, and Hiawatha Horse Park & Entertainment Centre will be closed by April 30, 2012.

The move has left the future of live horse racing in question at the three facilities, and there could be closures in the province, which has almost 20 racetracks.

“While this was a difficult decision to make, it was necessary,” OLG president and chief executive officer Rod Phillips said. “Fewer Americans are crossing the border to play slot machines at border sites. A decade ago, border casinos returned a net profit of $800 million a year. Today, that profit is less than $100 million and falling.”

Picturesque Fort Erie, which offers Thoroughbred racing from the spring into the fall, is across the border from Buffalo, N.Y. Windsor and Hiawatha, both harness tracks, are located across the border from the Detroit, Mich., metro area. Both Ontario locations also have non-racing casinos.

According to the OLG, slots revenue at the three tracks has decreased significantly since 2001, with Fort Erie’s decrease the highest of the three tracks. In 2001, slot machines at Fort Erie generated $129 million but that number has dwindled to $29 million in 2011.

Fort Erie, which offered average daily purses of about $100,000 in 2011, is one of two racetracks in the province to host live Thoroughbred racing, and the track also holds several Quarter Horse racing dates during the year. The track is set to hold its 115th anniversary celebration during the 2012 meet.

Currently, Fort Erie receives $5.6 million per year from the slots-at-racetracks program. With that money unavailable to the track beyond the 2012 meet, Fort Erie spokesperson Jim Thibert said he’s still hopeful the track can find a way to make up the difference in funding so it can continue live racing.

Thibert told the St. Catharines Standard the track can survive without slots money, but not at its current level of operation. “I’m sure horse racing will be around in one form or another,” he told the newspaper. “But right now, the government gives us $5.6 million, and we maintain racing at a $30 million level. That’s the part people seem to be missing.”

In response to the slots shutdown, Fort Erie issued a statement to horsemen and employees that the track’s 2012 season will be held as planned with the current purse structure intact. The track’s senior management will be working throughout the coming months on various scenarios for the 2013 season and will be informing licensees and the public on their progress throughout the 2012 meet.

Should Fort Erie have to close at the end of the 2012 meet, it would mean the end of 115 years of live racing in the border city and would also put the second jewel of the Canadian Triple Crown, the 1 3/16-mile Prince of Wales Stakes, in jeopardy.

Despite the fact Fort Erie may be able to save live racing beyond 2012, Windsor and Hiawatha may not be able to continue with live racing past this year.

Windsor received $4.1 million in 2011 through the slots-at-racetracks program, while Hiawatha received $3 million. If the two tracks were to continue racing into 2013, Ontario Harness Horse Association general manager Brian Tropea said it may only be a matter of time until racing is canceled.

"There's a chance that these tracks could survive in a very, very limited role," Tropea said. "They may be able to run the minimum number of race days to keep their betting permits, but with the new gaming products it would be very, very difficult for a racetrack to operate solely on its pari-mutuel revenue under that model.

"The purses wouldn't justify the expenses for the horsepeople to keep the horses racing."

Breeders in the province may also be on the hook for thousands of dollars in added expenses and lost revenue if racing at tracks is eventually ended.

"We've got babies being born right now that people are on the hook for anywhere between $10,000 and $20,000, and it's got to make you sick to walk out there and see that baby foal, knowing it has no place to race," Tropea said.

Woodbine Entertainment Group, which operates Woodbine and Mohawk Raceway, issued a statement on the developments March 13. It gave no indication the two tracks are threatened.

"The announcement by the government to cancel the slots-at-racetracks program has immediate implications and raises serious concerns about the future of the horse racing and breeding in Ontario," WEG president and chief executive officer Nick Eaves said. "At the same time, Woodbine Entertainment Group also recognizes the longer-term opportunities being presented by OLG's modernization strategy.

"Given the success of our long-term partnership, WEG is committed to immediately commencing work with the government and the OLG to develop a mutually beneficial long-term plan--a plan that will best serve the customer, the government's revenue objectives, and our company's mandate to maximize financial performance in order to achieve the highest quality of horse racing.

"WEG has long held the position that Woodbine is the logical location for a casino in the Greater Toronto area. Clearly there is significant gaming customer interest at Woodbine, with over six million visitors annually. Similarly, Mohawk, with its one million visitors annually, provides a unique opportunity being located in Milton, which has been the fastest growing municipality in Canada for the last 10 years."

Woodbine hosts Thoroughbred and Standardbred racing, while Mohawk is a harness track. The two tracks have the highest pari-mutuel handle and purse payments in all of Canada.