|The latest on #OntarioHorseRacing (It's January)|
|Sunday, 13 January 2013 22:16|
After a recent post on facebook, a friend of mine wrote: "…I fail to see what slots and casinos have to do with horse racing. If the industry cannot survive without alternative devious means of separating gamblers from dollars then it's all over. Ponies are not slots and black jack. If the OLG et. al. are addicted to gambling profits they should just say so and stop trying to suggest they are supporting a horse racing industry that no longer exists."
This viewpoint is quite common (as in a lot of people have it…), especially those that haven't really delved into storied affair.
Here was my response… as an outsider that has been following the situation pretty close. This article is more of an opinion piece with sources listed...
The Horse Racing Industry was viable and self-sufficient. Then the OLG regulated themselves to do slots. They wanted to do them in rural areas. They went to the tracks and struck a deal so they could ease them into the municipalities at minimal overhead. The deal was great all around. 10% for the horsemen, 10% for the track building (managing the joint property, etc.), 5% to the host municipality. Some of the smaller tracks in the chain had their purses up to 90% of their 10%, and that's where the perception of "slots paying for racing" came from… But, they were racing before. The only change was that the money increased, and then the overall industry increased.
After the big announcements and the uproar of the initial claw back of the Slots at Racetrack Program (SARP), the government then said, "ok, let's take another look at this and see how we can make it hurt less (though, not reinstate in its entirety)". Their own panel/team found that in addition to many areas for improvement, "The panel concluded that a viable, world-class industry requires public investment, though substantially less than the industry has received from SARP", and stated that they could not find a successful model in the world that didn't work without government support.
But it's like any other investment. The OLG Cut a cheque for 1.9 Billion Dollars to Ontario in 2009-2010. 60% of that came from Slots at Racetrack (their 75% of share less their own expenses).
The OLG paid $345 Million (in the 25% local share) to generate that 1.1 Billion. Plus the Ontario Horse Racing Industry is an industry that employs 30,000 full time and with part-time upwards of 60,000... all contributing to the overall system through taxes, gdp, etc., to the tune of 2 Billion Dollars.
Of the 345 Million, 1/5'th of that went right to the local municipalities. 61 Million dollars a year to the communities hosting the Slots.
Most importantly, that money isn't tax dollars. It's a share of what was lost in someone's gambling bet. It is a fee paid to the horse industry, the venue and the town for hosting the machines in conjunction with their business...in their business.
Where the matter is starting to bubble is this: The tap is turned off. The OLG's Modernization Plan is to move the slots into Bingo Halls as "imitation slot machines" (and are). The Head of the OLG is allegedly an investor in Casino's coming to Canada from the US, and one of the OLG's directors is the owner of a chain of Bingo Halls. Recently announced, the percentage parlayed at the Bingo.... 25% to the OLG. 47% to the Hall. 25% to the Local Charity. 3% to the Municipality. These numbers are not remotely close to what the OLG and hence the Province was collecting from SARP.
Politically, the decision makers are the biggest ones to benefit from their decisions (the definition of conflict of interest) and INSTEAD OF THE OLG GETTING 75% OF THE ACTION, THEY'RE TAKING 25%. If it was dollars for dollars, they are creating their own shortfall.
Big Ontario Casinos are losing money (the four run by other parties), and the government run ones are flatlining (no growth).
Back to the horses... they have to revamp their industry, and are not getting a fair shake. They have many of their own problems…they need to be more transparent, market more to drive new consumers to tracks and Off-Track-Betting, generate new revenue streams and so forth…
…but to pause and highlight where they are in this process....
The Government Panel is recommending that the Government just cut the industry a cheque (a larger one than the Government already offered). From whatever, just the coffers. So, the Government now wants to pay with Tax Dollars, as opposed to a "house commission" (my own term) on a gambling loss, that is government endorsed, in a joint venture, that generates large revenue for the Province in addition to the other local benefactors.
So, it's like sad story, conspiracy, politics all at once. It's an Industry that employs many, contributes lots and was fine until the OLG came to them. Now they're getting the rug pulled out from under them, and as it unfolds it becomes apparent.... all for the wrong reasons.
The Government Panel sees the value in correcting it. The value it contributes. They see the need.
Lastly, why the pressure needs to be kept on... it's working, kind of. The one liberal candidate would carry the minister title that would oversee this. The other parties are beginning to quote the real truths. But the action has to happen now. Leases are up on one of the major tracks. The initial announcement cut the breeding season in almost half by volume and by revenue. They're fire sale-ing. And if the dollars were a dollar-for-dollar transition.... The OLG is now poised to generate a minimum of 50% less factoring in the Horse Take vs. Bingo and Casino Take (and not the existing super-casino downward performa's). All of this, when the tap was shut off for the wrong reasons, instead of fixing the problems., and with the main reason being: Ontario needs to cut spend. Sure. Cut Spend. But do what you can to maintain Revenue Generation.
It affects us all... Check out this video where I look at how it affects the local municipality, the equine community and the Ontario Taxpayers.
The deadline is fast approaching... contact your MPP to ensure it's top-of-mind. Talk to anyone you know in Horse Racing and tell them to speak out... work together. The biggest issue right now in the Horse Racing Community:
As we look to the NHL and their new working arrangement, it took months of group vs. group mediation and negotiation. Here... we have too many groups working in too many directions... and no more time on the clock.
My Ontario includes Ontario Horse Racing... this could be the dawn of a re-birth and even greater success, similar to when SARP was introduced. But it is going to take the Industry, the Government and the Taxpayers to jointly work on the entity to earn great dividends for all.