The Ontario Numbers Are In

Good morning racing fans!

Today, two articles popped up that relate to Ontario horse racing.

The first, in the Globe and Mail, looks at the compensation from the OLG to tracks that hosted slots, or continue to, under new agreements.
  • Not all compensation agreements have been finalized, but $80.6-million will be distributed overall, including $31.5-million to Great Canadian Gaming for its Georgian Downs track north of Toronto.
This appears to be a one time payment, which was expected by most, as some sort of restitution.

Also in the article, transitional funding numbers were alluded to. 
  •  The lucrative deals that delivered 10 per cent of gross slot revenue to racetracks and 10 per cent to the horse-racing industry are still gone, but the government is providing nearly $180-million in transitional funds over three years to a dozen tracks on the condition they open their books to a third party for auditing. 
That's about the third time we've read that number. I read rumblings from a lot of people that that number would be way higher than it is (some estimates for four or five years too), but that appears to be false. The number is about in-line with what any observer expected.

Over in the Toronto Star, there's an article on Woodbine's battle with the city of Vaughan for a casino.
  • Vaughan — north of Toronto and a short drive from Woodbine Racetrack on Rexdale Blvd. — just voted to ask OLG to consider it for a casino-resort.The problem? Cannibalization. Two regions going after the same gambling dollars.

I like to think I am pretty straight here on the blog, and in general about this government stuff. Maybe I'm not, but I can honestly say I've looked at both sides of the argument.

For example, the OLG did need updating from what I could see. Revenues were falling, cross border numbers were off, consumer behaviour was changing, etc, and I could see them coming for slots. I don't think they implemented it correctly or well, but the principle of it did make some sense to me.

Conversely, I cannot, no matter how hard I look or how hard I try, see the point of a new casino other than at Woodbine.

Think about it as a private citizen, if you were starting one:

Woodbine already has gamblers gambling. Woodbine has land and an infrastructure. The costs of a new casino on the grounds would be effective. The expertise is there, and government partnerships are in place.

Also, think about it as a public policy wonk.

With a casino at Woodbine not only would it work as well or better, you support a track with a storied history; one that brings in tourism dollars, pays purses, supports a rural labor intensive sub-economy, and is a draw.

I realize sound decisions are not made by government's because of politics. Look no further than the green energy boondoggle here, or that completely obscene stimulus package in the US with money for every bizarre pet project known to man.

To me this policy seems like a complete no-brainer. Whether you are a free marketer,  Keynesian, lefty or righty, or anyone else for that matter. It just makes sense.

Whatever happens, those numbers assure that horse racing will be different, will be smaller and will not succeed without major change. Although it seems completely bonkers that someone would have to instruct an industry to do this, one of the former Minsters said it in a nutshell:
  • “The industry [needs] to be more focused on its fans and on horse players. 
Casino or no casino at Woodbine - and I am convinced there will be - right now, it appears the future of Ontario horse racing falls directly on customers.

Note: Grand River starts their meet tonight, with a free PP link (PDF).

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