Ontario’s horsemen are “extremely frightened” by the drying up of support money from slot machines at racetracks spelled out Tuesday in the province’s budget.
As the McGuinty Liberals took aim at a $15.3-billion deficit, one of the casualties was a 14-year-old agreement the province had with the 17 Ontario tracks. The deal – worth some $345-million a year to the industry – was originally meant to replace a shortfall in wagering dollars as people bet on slot machines instead of horses.
Without the agreement and the provincial money, several of the tracks could fail, officials warn.
“There’s not going to be a horse industry as we know it,” Glenn Sikura, president of the Canadian Thoroughbred Horse Society’s Ontario division, said after the budget speech by Finance Minister Dwight Duncan.
“If their plan goes through, I think it could be the end of horse racing,” said Sue Leslie, president of the Ontario Horse Racing Industry Association.
She said breeders who had built up the industry would see the quality of horses degrade and the number of horses in Ontario dwindle.
“I’m confused by the government’s decision,” Leslie said. “We were making so much money for the government while saving horse racing. They need more money and we’ve been their most successful partner. Why don’t you go to your partner and ask suggestions on how to make more? But they didn’t.”
The Ontario government said the $345-million given annually to the industry since 1998 to support horse racing, in exchange for the government moving into gambling, was a hidden benefit for owners and breeders.
Liberals called it a “subsidy;” Progressive Conservatives called it “revenue sharing.”
Sikura said he did not see the government’s position as “cast in stone. Everything is somewhat negotiable.” Adding, the program for slots at tracks had been “awesome for them. For every penny we get, they got four.”
The breakdown had been: 75 per cent of slot revenues to the provincial government; 5 per cent to the municipality where the machines are located; and 20 per cent to the horse racing industry.
“And that 20 per cent is divided so that 10 per cent goes to the racetrack to cover expenses and 10 per cent goes to the people who breed and race horses – primarily through purses. … It doesn’t go into someone’s back pocket,” Sikura said.
As many as a dozen racetracks could go out of business, he warned.
The Ontario Lottery and Gaming Corporation had previously shed 560 jobs and is due to remove slot machines at the Fort Erie, Sarnia and Windsor tracks.
A little more than a month ago – and again on Monday – horsemen gathered at Queen’s Park to protest the pending impact of the budget and removal of slots.
Nick Eaves, chief executive officer at Woodbine Entertainment Group, which operates both the Woodbine and Mohawk tracks, said it’s possible horse breeders and owners will shift their base of operations elsewhere because of the government position.
“A lot of people are saying those exact things,” he said. “The province, through the OLG, made it clear what to expect. They announced they intend to terminate the agreement as of March 31, 2013. … There’s absolutely no question it’s caused significant disturbances in the horse racing industry.”
Ironically, the OLG awarded the Woodbine venue an additional 1,000 slot machines – beyond the 2,000 already in place – in the spring of 2010 to meet demand. Leslie said it is unrealistic for OLG to expect private industry to make new urban slot parlours with parking lots, “and do it for less than the 20 per cent racetracks were getting.”
Eaves said he was not sure if gambling machines would stay in place at Woodbine and Mohawk, but the two intend to stay in business.
“We’re two of the OLG’s largest money-producing sites,” Eaves said. “Our mandate, as a racetrack, is to make the maximum amount of money we can and to put on the best horse racing we can.”
Leslie said horse racing and spinoff industries such as hay and straw production, equipment, saddleries and accounting employ thousands of Ontarians each year. A 2010 economic survey set the figure at 60,000.
OHIRA estimates the economic clout of the horse industry at $2-billion. “But now our own government is putting horse racing out of business,” she said.