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Premier Kathleen Wynne speaks from a Cabinet meeting in Sault Ste. Marie, Ont. on Friday March 1, 2013.

KENNETH ARMSTRONG/THE CANADIAN PRESS

Queen's Park will help the horse racing industry clamber back into the saddle by integrating it with Ontario's expanding gaming empire. And on Friday, Premier Kathleen Wynne announced the province had reached three-year funding deals with four more racetracks – Grand River, Western Fair, Clinton and Hanover – to help them make the transition.

The arrangement is one of the first tangible steps that Ms. Wynne, in her capacity as Agriculture Minister, has taken to mend fences with the province's rural areas, which lashed out at her Liberal Party in the last election.

Last year, the government moved to scrap a $345-million program that paid racetracks a commission on slot machines installed at their facilities, drawing the ire of equestrians who feared the loss of money would sink their industry.

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The entente revealed Friday will eventually see the tracks receive revenue from "new and different" Ontario Lottery and Gaming Corporation activities. The government has not specified exactly what games will provide the money, but the OLG is currently trying to grow and modernize, with more casinos and different ways to buy lottery tickets – such as by mobile phone – in the pipeline.

To tide horse racers over until then, the government has offered stopgap funding. In January, Woodbine Entertainment Group, which owns the Woodbine and Mohawk tracks, was the first to sign on. With four more tracks joining Friday, there are eight facilities that have yet to reach a deal.

Ms. Wynne said that whatever money the racetracks receive from the government, it will not be more than Queen's Park takes in from the horse-racing industry via taxes. And she said horse racing would have to shrink.

"The reality is the industry is going to be smaller than it was," she said at the Grand River track in Elora, Ont. "A sustainable horse-racing industry is going to be smaller."

The Ontario Horse Racing Industry Association hailed the Liberals' willingness to reach a revenue arrangement as a "major policy change."

"We now have the opportunity to plan a more sustainable future for the horse racing and breeding industry working in partnership with the government instead of competing against the province's other gaming products," said president Sue Leslie in a statement.

The Progressive Conservatives, however, were quick to defend their rural heartland.

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"At these tracks already, we've seen hundreds of jobs being lost. The damage is done," said Monte McNaughton, one of several PC MPPs who defeated Liberal incumbents in countryside ridings in 2011. "Rural Ontario doesn't respect a premier dedicating part of her time to the agriculture portfolio."

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