The points made in the document should, in my opinion, be read very closely by those jurisdictions that still have slots. We all know what this report details is currently happening in those jurisdictions, and it must be turned around and changed to survive.
Some highlights/lowlights (these are direct quotes from the 53 page report):
- Without slots revenue or a new revenue stream, the horse racing industry in Ontario will cease to exist.
- Absent some other new revenue stream, no Ontario racetrack has a viable business plan to continue racing operations after March 31, 2013.
- The horse racing industry should be based on conducting races that appeal to horse players.
- Though it is outside our mandate to comment on the merits of the government’s decision to cancel SARP, we will nevertheless do so because so many people we spoke with advocated reinstatement of the program. It is the panel’s view that continuing SARP would be poor public policy. The program has contributed to a fractious industry that has lacked accountability, transparency, a common vision and a proper focus on the consumer. Continuation of SARP would allow the industry to keep evading the competitive challenges of today’s entertainment marketplace.
- The program has provided far more money than was needed to stabilize the industry – its original purpose – and has done so without compelling the industry to invest in a better consumer experience.
- The majority of purse money paid in Ontario does not come from horse players: it comes from slots players. In 2010, SARP funding made up 63.6 per cent of purses.
- Horse racing generates expenditures, jobs, exports and tax revenues. Moreover, horse racing is a cultural asset for Ontario communities. Given the significant public good derived from horse racing, the province should pursue a gaming strategy that includes horse racing as a key component.
- The public interest also demands accountability for the use of public funds – but this has been weak where the Slots at Racetracks Program is concerned. As the Sadinsky report observed, while SARP at the outset referred to objectives such as enhancement of live racing and sustaining the agricultural sector, clear benchmarks were not established to monitor the achievement of these goals. The government simply paid over funds to the industry without guidelines or requirements, feeding a “culture of entitlement.”
- The panel believes SARP’s “no strings attached” approach is one reason the industry has come to think of slots revenue as “their money.” In fact, in the panel’s view, it is public money belonging to the people of Ontario and the government can redirect it to other purposes if it concludes this is in the public interest.
- Fifty million dollars over three years is insufficient to build a bridge to sustainability. A viable, vibrant horse racing industry is simply not feasible today without public investment. The revenue currently available from pari-mutuel wagering – or from foreseeable growth of the wagering pool in the short term – is not enough to maintain the industry.
- Ontario horse racing has benefited from government help since Queen Victoria granted 50 guineas for the Queen’s Plate in 1860. The panel knows of no jurisdiction in North America where there is a thriving horse racing sector without government assistance.
- The panel is convinced it doesn’t have to be this way. In our view it is possible for Ontario to have a viable, world-class, right-sized horse racing industry, but only if additional revenue is provided either by the government directly or by allowing the industry to offer new gaming products. A sustainable industry can be achieved with significantly less public funding than now comes from SARP.
- Ontario’s horse racing industry is fractious and has proven capable of very little collaboration for the common good. This is partly due to the flow of slots money that has enabled the industry to function without pulling together. The panel concludes that the industry currently lacks the cohesion to save itself.
It's anyone's guess what will happen. However, I think the structure of what will happen is something along the following:
- The Slots at Racetrack program is over
- The sport will no longer be supply side driven, but will rely solely on demand, with a potential subsidy.
- Transitional funding to help the industry reach the new normal will be higher than $50M per year.
- The industry as we've known it is over.. There will likely be four or fewer tracks, and those tracks will host short meets.
- There will probably be a massive dust up between thoroughbred and standardbred racing
- The industry will soon begin to move from anger and denial, to working within this framework, so some sort of 2013 racing season can develop.