The biggest horseracing provider in Ontario is expected to keep its tracks open after making a deal-in-principle for its share of a provincial transition fund to move away from slot machine revenue.
Woodbine Entertainment Group (WEG), which operates the Woodbine track in Toronto and the Mohawk track at nearby Milton, said Wednesday its agreement, for an undisclosed sum, "ensures the continuation of live horse racing" at both facilities for two more years.
The province didn’t say how much transition funding the Woodbine tracks will receive, as funding negotiations continue with other track operators toward agreements to be announced "in the coming weeks."
The province announced last spring it will cancel its Slots at Racetracks program (SARP) at the end of March 2013. The program, a 1998 revenue-sharing agreement between Ontario Lottery and Gaming Corp. (OLG), the province’s racetracks and host municipalities, has until now allowed government-operated slot machines to be placed at racetrack facilities.
The province in June pledged it would put up $50 million over three years to help track operators transition to a business model without SARP.
Toronto-based WEG said in a separate release Thursday that its transition funding agreement "will result in significant changes to WEG’s operating model" but didn’t specify how.
To receive transition funding, the province said Wednesday, racetracks will have to meet "accountability and transparency requirements."
The company added its average daily purses for thoroughbred will be "comparable to those of 2012" while standardbred purses will continue at "existing 2013 rates."
"This agreement points to a renewed future for horse racing in Ontario," provincial Agriculture Minister Ted McMeekin said Wednesday. "We look forward to working with additional racetracks towards the further development of a new model for a sustainable industry."
The province said it’s found SARP to have prevented OLG from locating gaming sites elsewhere based on customer interest, and thus kept OLG from maximizing its slots revenue.
OLG has said it plans to still have slots facilities at tracks where "consumer interest" warrants them, and is in talks with some track owners to rent space for slot facilities. So far 10 tracks have reached lease agreements in principle with OLG, the province said Wednesday.
"This long-awaited agreement offers stability while WEG and our partners in horse racing work with government towards a long-term sustainability solution," WEG’s board chairman Jim Lawson said in the not-for-profit company’s release Wednesday.
However, he added, "it’s clear to us that this is only a short-term fix, and sustainability can only be achieved by the integration of horse racing into the province’s gaming strategy."
A "core element" of that strategy, the company said, "must be permanent, expanded casinos at Woodbine and Mohawk racetracks."
The challenge, Lawson said, "is to now build a new, sustainable model for horse racing in Ontario that continues to set the standard internationally."
WEG CEO Nick Eaves said in a separate release Thursday that the agreement will "provide our fans, industry partners and the horsemen and women of Ontario with more clarity about our 2013 schedule."
Woodbine’s 2013 thoroughbred racing season will open April 20, the company confirmed Thursday, adding it will apply for 133 thoroughbred racing days at Woodbine, along with 99 standardbred race days at Woodbine and 84 at Mohawk. The Woodbine backstretch will re-open March 1.
WEG said its 2013 schedule of events will include the Queen’s Plate, the Pattison Canadian International, the Ricoh Woodbine Mile, and the Pepsi North America Cup at Mohawk, plus Mohawk’s standardbred Summer Meet.
The Ontario Horse Racing Industry Association said Thursday it would distribute flyers to delegates at the Ontario Liberal Party’s (OLP) leadership convention urging a reversal of the decision to scrap SARP.
"When they vote for Ontario’s next premier, we hope rural delegates think about their communities back home and the damage our industry is facing," the association said on its website. The OLP convention, at which a replacement will be picked for Premier Dalton McGuinty, runs in Toronto from Friday to Sunday.
"The next premier (of Ontario) has less than 60 days to save 55,000 jobs that will be lost when (SARP) ends," OHRIA’s flyer stated.
The flyer also claimed the cancellation of SARP will lead to "thousands of horses euthanized" and "$1.9 billion in revenue to government lost," and added "thousands of OLP votes (would) disappear."
The province said in its 2012 budget, which telegraphed the decision to scrap SARP, that it had provided $3.7 billion to the industry since 1998, including $345 million in 2011-12.
The province’s horseracing transition panel noted in its report in August that Ontario’s horseracing business now gets 63.6 per cent of its purse revenue from SARP.
SARP, the panel said, "has provided far more money than was needed to stabilize the (horseracing) industry — its original purpose — and has done so without compelling the industry to invest in a better consumer experience."
Ont. horseracing sector will need ‘ongoing’ funds, panel says, Sept. 1, 2012
Ont. to halt horseracing industry’s slots program, March 12, 2012