How Much Do Slots Really Help the Racing Product?

Jean Major said he can't argue with the benefits of racetrack slot machines in Ontario, Canada. But he indicated there are two sides to every story, and suggested some procedures to ensure substantive growth in the horse racing industry.

"More money does not necessarily buy you more happiness," said Major, executive director and chief executive officer of the Ontario Racing Commission, during a panel discussion at the Dec. 9 Racing & Gaming Summit that served as a lead-in to the University of Arizona Symposium on Racing in Tucson, Ariz.

Major cited strong figures that showed the healthy aspects of the Thoroughbred and Standardbred industries in Ontario: In the last six years, licenses of participants are up 33%, purses are up 156%, racing dates are up 22%, claims are up 110%, the value of claims is up 228%, and total handle is up 19%.

It's not a panacea, however. Major said wagering for 2003 most likely would decline a bit. He also said handle hasn't kept pace with purses, which means a larger percentage of purse money is coming from slot machines, not betting windows.

According to figures cited by Major, a majority of the purse money at 60% of the tracks in Ontario is funded by slot-machine revenue. At one track, which he didn't name, 86% to 87% of the purse money is derived from gaming revenue.

"There has been no significant growth in the racing product since slot machines were introduced," Major said.

Major said there are reasons purses have driven the industry but not handle: offshore wagering, the complex nature of the pari-mutuel product, and the fact the objectives of the slots program weren't fully understand when the province approved the racetrack gaming program. There are other problems, he said: Horsemen want more racing dates, and live racing is treated like a second-class citizen at some venues even though the slots program was implemented to bolster the industry.

"When you get 87% of your revenue from your secondary business, you may not have much time for your core business," Major said. "I can understand that but it's something that can't be tolerated."

Major suggested, for Ontario and other jurisdictions that might be looking at racetrack gaming, a few benchmarks that must be met. He said the standards must be enforced, purse money redistributed to developed and mature markets, presumably under some sort of revenue share, racetracks that do the most to promote live racing be rewarded, and an industry-wide marketing program for racing be introduced.

"I don't believe the slots program in Ontario was created to fund a losing product," Major said.

Also during the panel discussion, students from the University of Arizona Race Track Industry Program released the details of research into racinos and their impact on horse racing and breeding. In general, the results of positive for states that have racinos, and somewhat negative for neighboring states that don't having racetrack gaming.