The Debate in Ontario is Getting Framed

It's highly doubtful, if not totally specious, that raising taxes on people - rich or not - can help an economy. It's highly doubtful if you don't like a terrorist act that inhibits your freedoms that you are "Un-American" either. But the way the debate is framed can make these things sound pretty good, or pretty bad, depending on your perspective.

Currently in Ontario that debate is being framed at this moment with regards to slots at racetracks. What's winning is the narrative: It's subsidy and why are we subsidizing it anymore?

Framing it as a subsidy helps, because even in super-liberal places like Toronto, people don't much care for giving cash away.

I'll leave the questions and answers and semantics of 'subsidy or not a subsidy' for smart people to argue about. It matters little to me.

What seems to be happening in Ontario now, and what is soon to probably happen in New York, Pennsylvania and elsewhere with slots for racetracks, is a need to raise public revenues to pay for overspending, and trying to find the easiest target to foot the bill. That target - racing - is not organized, nor does it have much of a lobby to fight it. But strangely enough, I think it may turn out better than we thought, mainly because of good old common sense.

The Ontario government, I believe, will not "gut" horse racing, because of the way slots at racetracks came to be.

Slots were a government made and prescribed phenomenon. They don't occur in the private market, or grow on trees or on land. They were brought to the gambling landscape with a promise, a promise made to racetracks that said something simple:
  • If you host our slot machines, and promote it to your customers that are already there to gamble, we'll give you a slice.
Governments and racetracks already had a unique partnership. Since governments were pretty much invented they took cash off every bet in Ontario, and gambling dollars subsidized the public's finances. If they were going to come into the gambling landscape with slot bandits after being a partner in gambling for years, horse racing played "let's make a deal".

Now simply saying "screw you", subsidy or not, smacks of being a little bit of having your cake and eating it too.

I wonder what would happen if the Canadian government, who gives licenses to run telecommunications, took over the cell phone business. I bet Rogers may be up in arms. They played ball with the government, and their multi-billion dollar business would be crushed. It would never happen that way of course.

So what I think this may change is simply the landscape and the slots deal itself. Horse racing can cut a new deal, the government will be happy, they'll look good to voters, and we'll be back where we were - with a little less purse money. What we do with that purse money will be the big question that needs to be answered, if so, just like it always has. I hope the new answer is better than the old answer.

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