Is Horse Racing in Ontario the Fall Guy For Government Mismanagement?

Recent announcements of slot closures and the introduction of online betting in Ontario has taken the horse racing industry by storm this week. The government, deep in the hole, has looked to gambling as a way out, and the old site licensing deals with racetracks look finished. One new item they want to monopolize, is online wagering.

But is the governments entire set of assumptions bad business because they're dressing up a bad model without getting to the crux of the problem?

Gambling experts seem to think so:

•  “If any U.S. casino had that kind of monopoly and customer base the revenues would be much better,” a casino manager from Nevada told me. He suggested that with 80 million* Ontario residents and the huge appetite for gambling in the province, OLG should be bringing in at least double that revenue

Why are revenues so light? Just like in racing, experts seem to believe - "it's the odds, stupid"

•  The casino manager believes revenues aren’t higher because the odds aren’t competitive, a mistake that is made too often by monopolies.
•  Obviously all things equal Canadians would prefer to bet with the government bookmaker but if the governments and agencies like OLG treat single game sports betting like the lottery, they can forget about gaining much interest except with the very naïve or amateur bettors. 

The author believes that the government needs to do three things to be competitive, and increase revenue properly. One, cut the slot hold to no more than 90% to increase churn and customer satisfaction. Two, offer -110 lines on single game sports betting and three, make sure (if online poker passes) that big pools of players are allowed to play, because without a large base, the online portion of the strategy will fail.

Hmmm - decrease takeouts, offer proper lines, and make sure they have big pools. That sounds familiar.


Regardless, what Ontario has done with gambling clearly has not worked, or we would not be where we are. Did mismanagement get us here? At least some seem to think so.

* Suspected typo