Politics 101

For those of you who have not read the Commission on the Reform of Ontario's Public Services...

Here is a recap:  The government of Ontario owns four GBE's (Global Business Enterprises), each of which returns significant revenues to the province.  Government Business Enterprises are government organizations that:

*  Are separate legal entities with the power to contract in their own name;
*  Have the financial and operating authority to carry on a business;
*  Are principally focused on selling of the goods and services to individuals and non-government organizations; and
*  Are able to maintain their operations and meet their obligations through revenues generated outside the government reporting entity.

The four GBE's are OLG (Ontario Lottery and Gaming Corp), LCBO (Liquor Control Board), OPG (Ontario Power Generation), and Hydro One.  These four play a critical role in the province's fiscal condition.  In 2010-2011, the four combined to produce net income of $4.6 billion and since 2006, these four organizations have provided an average combined net income of $4.3 billion. 

The combined net assets of the four GBEs amounted to $17.6 billion at the end of the last fiscal year, about 13% of the government's total assets.  With $8.6 billion in net assets, OPG makes up the largest share of assets, followed by Hydro One ($6.2 billion), OLG ($2.4 billion) and LCBO ($0.4 billion).


The OLG's Part in the Fiscal Plan & Recommendations

Focusing more specifically on the OLG; they are required under legislation to remit to the province a "win contribution" of 20% of gaming revenue from the privately operated Resort Casinos and Great Blue Heron Slot Machine Facility.

The OLG provides significant net income to the province, but operational efficiencies could be explored to improve the company’s margins while continuing to respect social responsibility and meet its conduct and management requirement for the operation of all lottery schemes. For example, a number of questionable business practices should, at a minimum, be reviewed from a value-for-money perspective.

*  OLG maintains two offices, one each in Toronto and Sault Ste., Marie;

*  OLG continues to operate Casino Niagara despite the opening of the permanent and considerably larger Niagara Fallsview Casino Resort in 2004;

*  The Slots at Racetrack Initiative, which allows slot machines to be co-located at racetrack facilities only, earmarks a share of revenues generated from slots for racetrack owners and horse breeders.  This amounted to $334 million in 2009-2010.  Municipalities that play host to a racetrack also receive a share -- 5% of proceeds from the first 450 slot machines at the facility and 2% for each machine over that.  This totalled $78 million in 2009-2010, and

*  OLG purchases and provides lottery terminals to point-of-sale locations.

Finally, OLG should continue to seek new and innovative ways to deliver gaming in Ontario to increase its revenues. These include expanding existing business lines, creating new business lines (as it is doing for Internet gambling), and leveraging further private-sector involvement. In all such ventures, the OLG must remain mindful of its mandate to promote responsible gaming.

Recommendation 17-3:  Improve the Ontario Lottery and Gaming Corporation's efficiency through, at a minimum, the following measures:

*  Choose one of the two head offices;

*  Close one of the two casinos in Niagara Falls;

*  Allow slot machine operations at sites that are not co-located with horse racing venues; and

*  Stop subsidizing the purchase and provision of lottery terminals to point-of-sale locations and begin to introduce other points of sale for lotteries

Recommendation 17-4:  Re-evaluate, on a value-for-money basis, the practice of providing a portion of net slot revenues to the horse racing and breeding industry and municipalities in order to substantially reduce and better target that support.

 Recommendation 17-5:  Consider directing the Ontario Lottery and Gaming Corporation to expand its existing business lines, develop new gaming opportunities and make effective use of private-sector involvement.


Ok, let's break this down;  There are so many cost-cutting areas that the OLG could focus on WITHOUT ending the partnership with the horse racing industry, that it'll make your head spin!  Hopefully future newspaper headlines will say "OLG Closing Their Sault Ste. Marie Head Office", or "Casino Niagara Ceases" (It's important to note that there is also Seneca Niagara Casino and Hotel directly across the border in Niagara Falls, NY).  They could also start introducing other point-of-sale locations that would better accommodate patrons geographically and/or demographically. 

Personally, I think it very unfair to end the contract outright with the horse racing industry but still collect on the revenue generated by patrons who still are betting on the horses.  Maybe I'm blind but in "Recommendation 17-4", I read the words "Re-evaluate", not "End the partnership outright with the horse racing industry".  We can ask ourselves, "Was the industry making boatloads of cash before the Slots at Racetrack partnership agreement began in 1998?"  The answer is "No", however, the positive ripple effects because of it extend much further than the racetrack only.

Within two weeks the OHRIA had a billboard up-and-running for their "value4money" website, which, don't get me wrong, is fantastic, but why couldn't we have had billboards up two years ago actually promoting growth within our industry?  Why did it take the ending of a lucrative partnership with the OLG to start promoting ourselves?

Did we really do our fair share as an industry to keep growing?  Imagine a billboard two years ago that read:

As an industry we must hold some accountability, and as well, we should ensure that our industry continues to grow and prosper with or without the aid of others.

"If you have no will to change it, you have no right to criticize it."
~Anonymous



"Stay safe, keep your hooves on the ground, and keep reaching for the wire!"

It's A Numbers Game...Or Is It?

The OLG's fiscal year runs from March to March, with that being said, if Windsor, Hiawatha, and Fort Erie close on April 30, 2012, there's an estimated revenue loss of $100 million for the year; an estimated $4.5 million loss to the three municipalities involved, and no where to go for the estimated 2,059,846 million patrons that frequented these three casinos during the year. 

It's pretty clear why these three casinos were targeted first; with Hiawatha Horse Park in direct competition with the Point Edward Casino, which is approximately 11 minutes away;  Windsor Raceway Casino, well, that's a no-brainer, it's taking money away from Ceasars, which is about 16 minutes away; And Fort Erie was only standing on two legs to begin with since they were eyeing at closing that establishment two years ago.  With it being in direct competition with the Niagara Consolidated casinos, seemed like a logical choice.

Fort Erie, which was established in 1897, is regarded as one of North America's most picturesque racetracks, and is filled with racing traditions...but apparently it's "getting in the way" of the almighty dollar!  If people have no qualms about bulldozing over Windfield Farms, because of highest and best use issues, then why would people care about ANYTHING horse related and ANYTHING to better it?  E.P. Taylor is probably rolling over in his grave right now!


Similar Issues Across The Border?

An excerpt from the Daily Chronicle states:  "Back in October of 2011, former Illinois Gov. Jim Edgar has been lobbying in favor of expanding gambling at Illinois' struggling horse tracks by adding slot machines under a bill passed by the Legislature in the spring. Edgar and others argue the machines could help save Illinois’ horse-racing industry, which many believe is on its last legs after the amount of money wagered last year plunging to a 35-year low.

'The [horse racing] industry is going to rise or fall on this,' said Edgar, who recently was among a delegation of horsemen that visited Springfield to lobby on the bill’s behalf. 'If it doesn’t happen, you could see horse racing pretty much disappear in Illinois.'

The measure certainly has the potential to bring more revenue to the tracks. But whether it would save them is less certain, and opponents aren’t sympathetic to the decline of the state’s oldest form of legalized gambling – already propped up, for now, with subsidies from Chicago-area riverboat casinos.

'If that sport is past its time, and people don’t want to go anymore, they should just let it die,' said Doug Dobmeyer, spokesman for the Task Force to Oppose Gambling in Chicago. 'Horse tracks are for horse racing, not mechanisms to get more people to gamble.'

Other states have found 'racinos' draw more people, even if they didn’t translate to actual increases in wagering on horses. Indiana’s two racinos, each allowed to have 2,000 slot machines, have seen their adjusted gross receipts surge from a combined $392 million in the 2009 fiscal year to $457 million last fiscal year. That’s despite seeing the amount of money wagered on horse racing drop from $190 million in 2005 to $139 million last year...."

In my opinion, the most idiotic quote in the above article comes from the spokesman for the Task Force to Oppose Gambling in Chicago; "If that sport is past its time, and people don't want to go anymore, they should just let it die"  Um, excuse me, horse racing in North America dates back to 1665, and as far as harness racing goes, what the hell does he think chariot races were back in the Greek Olympics in 648 BC?  Horse racing will continue, despite every negative obstacle that becomes lodged in its way.  The real focus should be on how the industry can become self sufficient, but at the same time, move forward with the times. 

Here's What The Racing Industry Will Lose

1.  Horse Numbers and Value
          a)  broodmare numbers and broodmare values decline
          b)  stallion numbers and stallion values decline
          c)  a decline in overall horse numbers
          d)  decline in value for yearlings
          e)  decline in overall horses for racing

[A survey by Equine Guelph and OHHA (using data from 1998-2002) was done to show the benefits of the Slots at Racetrack partnership; the average increase in value per horse was 114% for mares, 372% for stallions, 109% for yearlings, and 43% for horses racing]

2.  Employment
          a)  loss of workers; including both owners and employees
          b)  loss of full and part-time licensed grooms
          c)  loss of full and part-time licensed trainers

[From 1998-2002, there was a reported increase of 48% in workers (owners and employees), full and part-time licensed grooms increased 66% and 73% respectively, and full and part-time licensed trainers increased 27% and 59% respectively]

3.  Investment Values
          a)  investment values of land, facilities and equipment will decrease
          b)  on a per owner basis, land and facility investment values will decrease

[Reported investment values of land, facilities and equipment also increased from $14.7 million to $30.1 million, an increase of a 105% during this study]

4.  Racing-Related Revenue
          a)  purse revenue will decrease
          b)  the value of sales of horses

[Purse revenue had an increase in aggregate of 123%; the value of sale of horses also increased substantially to 239%.  Other racing-related revenue reported in the survey more than doubled from $1.24 million to $2.84 million.  Overall the aggregate value of racing-related revenue increased by 145%]

5.  Horse Purchases and Operating Expenses

          a)  a decrease in expanded business activity and operating expenses
          b)  a decline in horse purchases
          c)  employee compensation decreases

[From 1998-2002 an increase in annual horse purchases and operating expenses increased 137%, with the largest amount of expenditures going into horse purchases, employee compensation, training and boarding, vet supplies, and feed and hay for horses under the care of the operator]

6.  New Investment in Land, Facilities, and Equipment

          a)  the loss of incentive for horsemen to undertake long-term improvements/expansions

[Between 1998-2002, the survey showed that horse operators were now making substantial new investments in their business facilities, land, and equipment.  Annual investments for these items by the sample respondents increased 657%-$1.71 million in 1998 to $12.9 million in 2002.  This indicated that the presence of the slots revenue has provided substantial incentives for horse operators to undertake long-term improvements and expansions in their business]

7.  Share of Expenditures-Rural Areas and Small Communities

          a)  loss of money spent within the community
          b)  loss of municipal revenue

[The survey showed that slots revenue has had a very beneficial effect on rural and small communities where most of the horse operator's money is spent.  Respondents reported spending 73% of their expenditures in rural and small communities in 1998, increasing to 80% in 2002]

8.  Economic Size

          a)  Loss of value and size of horse operator businesses
          b)  Loss of size of the overall industry

[The operators responding to this question indicated that without slots revenue their businesses in 2002 would have been only 43.2% the size and 36.6% the value of their business in 1998 (at the start of the slots revenue), and that the overall industry would have been only 53.2% as large. The respondents also indicated that with continued slots revenue, their businesses in 5 years would likely be 89.7% the size and 101.4% the value of their 2002 business, compared to only 28.3% the size and 26.3% the value if the slots revenue were terminated today. Clearly, the presence of the slots revenue has had a substantial impact on the standardbred horse industry and is essential for its continued viability.]

The Overall Conclusion:
 

"Overall, the provision of slots revenue to standardbred horse operations has created many benefits for the horse industry, the overall agricultural sector, and the Ontario economy in general.  The horse industry in turn has been one of the few bright spots in the agricultural industry in recent years, as the overall agriculture sector has faced growing competition, low prices, and periodic problems with adverse weather and disease. Continued support through slots revenue for the horse component of the horse racing industry has the potential for maintaining the current viability of this industry for many years into the future."

"Stay safe, keep your hooves on the ground, and keep reaching for the wire!"

And They're Off...!!!

Wow!  That certainly didn't take long for the OLG to obliterate 3 casinos!  As of April 30, 2012, Windsor, Hiawatha, and Fort Erie will be the first three on the chopping block, and according to the OLG fourth quarter fiscal report (2010-2011), that's approximately 574 OLG employees total--and does NOT include the associated jobs affiliated with the horse racing aspect!  Seems that protection of Ceasars Windsor, Niagara Fallsview and Point Edward Casinos are the reasoning behind these three racetrack/casino closures?

You can read through the OLG Strategic Business Review

I've been pretty quiet lately about speaking up with regards to what the Ontario Liberal Government is doing to the horse racing industry -- well, no longer.  As I sit writing this blog, I keep glancing at the London Free Press' bold-lettered headlines --  "McGuinty's Big Gamble".  As of March 13, 2013, the province will pull the plug on slot revenue for the horse-racing industry, which will, in turn, annihilate the sector. 
But wait a minute...was this in the master plan when Finance Minister Dwight Duncan tapped Paul Godfrey--a well-connected businessman, newspaper publisher and former Metro Toronto chairman--to head a new OLG board on February 19, 2010.

In a nutshell, the Ontario Government will halt the annual payments of $345 million as of March 13, 2013, with the province arguing that the money is better spent on health and education, and of course, to reduce the overall deficit.  But wait a minute...back in June of 2011, the OLG paid out $2 billion in cash to the province after a year of record-breaking revenue.  The $2 billion payout -- the biggest since 2003 -- was drawn from the $6.7 billion in total revenue the OLG earned for the fiscal year ending March 31.  And yes, the OLG staff also got their share of the revenue boom; $11.6 million was spent topping off staff paychecks even though salaries were frozen under a governement "belt-tightening" drive.

Ironically, in early March of this year, Toronto mayor Tom Ford recently asked Paul Godfrey and the OLG to fund an overhaul on the underground transit expansion that would specifically include an extension to the Sheppard line, but was answered with a flat-out "No".  "If we did a special purpose lottery for Toronto, how long do you think the line is going to be of municipalities across Ontario that would ask for similar things for swimming pools or skating rinks", Godfrey said.  But wait a minute...If the OLG plans to contruct a casino in the GTA within the next 5 to 7 years, would the public not need adequate and updated transit to access it?  Meaning that the OLG can eventually fund this project without a guilty conscience because A) They've freed up funds by pulling the plug on the horse-racing industry, and B)  They now have a legitimate reason for the upgrades, without getting backlash or asking for hand-outs from other municipalities.


Why An Isolated Casino in the GTA - In Fiscal Terms

In a quarterly performance report for OLG resort casinos (Third quarter of fiscal 2008 - 2009 [October - December]), Ceasars Windsor, Casino Rama, and Consolidated Niagara reported a third quarter gaming revenue of $349.1 million, with a year to date revenue of $1,093.9 million.  These establishments below are NOT directly associated with a horse track venue, which could be why the OLG is looking to the greater Toronto area for their casino and NOT at Woodbine or Mowhawk -- Simply put, it attracts more money to be put in the downtown core AND offer a resort-like setting--WITHOUT the smell of horse sh#t around you!




Note:  The Ontario Government receives 20% of gross gaming revenue from resort casinos and 100% of profits from Ceasars Windsor, Casino Niagara, and Niagara Fallsview.  Net revenue from Casino Rama are distributed to Ontario's First Nations.  As compensation for hosting a resort casino, the hosts cities of Windsor and Niagara Falls, each receive $2.6 million annualy for ten years, following $3 million annualy for the next ten years (commencing May 1, 2008 at Windsor)

But wait a minute...A fourth quarter fiscal report from the OLG for 2010-2011 (January to March) states that the OLG Slots at Racetracks produced a fourth quarter revenue of $411.7 million, with a year to date of $1,734.5 million.  Of that year to date revenue, $161.7 million went to horse people, $175.8 million went to the racetrack, $60.1 million to the municipalities, and $185.3 million to OLG employees.  A total of 18,267,943 patrons attended the racetrack/casino establishments during this fiscal year, while 14,625,998 patrons visited the larger, non-racetrack resorts (Ceasars Windsor, Casino Rama, and Consolidated Niagara) in 2008.  Are we saying that the racetrack/casino establishments can't carry themselves economically?  On top of the loss of the $345 million to the racing industry, we're cutting the $60.1 million distributed to the 18 participating municipalities -- an average of $3.3 million dollars cut from each municipal budget.

In a 2010-2011 public account document, the OLG committed to the establishment of an additional Slots at Racetrack operation at an estimated cost of $18,954,000;  An amendment that would take them to the year 2016; quoted below:

g. OLG Casinos and Slots

The Corporation is committed to the establishment of an additional Slots at Racetrack operation at an estimated cost of $18,954,000.  In connection with the terms of an amending agreement and assignment, consent and acknowledgement agreement between the Corporation and a Slots at Racetrack site holder, the Corporation agreed to provide the site holder with payments which commenced December 31, 2009 in the amount of $5,600,000 per annum for three years in lieu of a predetermined percentage of revenue from slots.

In connection with the terms of an amending agreement and an assignment, consent and acknowledgement agreement between the Corporation and a Slots at Racetrack site holder, the Corporation agreed to amend the horse racing industry payment during the five-year period commencing January 1, 2011 to a predetermined amount of $8,000,000 per annum in lieu of a predetermined percentage of revenue from slots.

Would this not commit the OLG to at least 2016?


Further Notes:

Clinton, Dresden, and Hanover racetracks are the lowest revenue producers, have the lowest patron attendance, and provide jobs for approximately 276 OLG employees, NOT including the jobs of horsemen.  Look out people, you could be next!

Is it not time for action?  Why is it that the OLG/government refuses to do absolutely NOTHING in order to maintain a marriage with the horse racing industry?

On a personal note; I have a Stonebridge Regal foal due near the end of April 2012 and I shutter to think that I may very well have to train him to be a riding horse..The OLG and the Liberal government should split the cost of my $4000 stud fee!


Stay safe, keep your hooves on the ground, and keep reaching for the wire!

Remembering Cam Fella

"He was aptly named 'The Pacing Machine.' He was 'The People's Horse,' the legendary Cam Fella, who after his retirement from stud was taken on a tour of major raceways and small-town tracks across North America to raise money for charity, attracting large crowds to greet him at every stop.

Cam Fella was Canada's standardbred equivalent to thoroughbred's Northern Dancer. Like "The Dancer", Cam Fella was not only a great racehorse, but an incredibly majestic sire of champions and world record holders. He did more than any horse to focus public attention on harness racing during the 1980s, challenging all comers at tracks across North America. His feats endeared him to countless fans, many of whom formed an entourage that traveled to wherever Cam Fella raced.

On the track he had the will to overcome seemingly insurmountable leads by his foes. He simply refused to be beaten. His regular driver and trainer, Pat Crowe, said: "losing just wasn't in Cam's book." Dave Perkins in The Toronto Star wrote, "He was from his own competitive planet, known for going only (but absolutely) as fast as necessary. He did his winning face-to-face, looking the competition in the eye and not letting it past." His exploits became legendary. Consider his race record, which ended in 1984 on the crest of 28 consecutive victories, and earnings of over $2 million, which at the time made him the richest pacer in history.

Canadian trainer Doug Arthur paid $19,000 for the son of Most Happy Fella at the 1980 Tattersalls Sales in Lexington, Ky. At two the colt won three of 11 starts, breaking stride and being disqualified on three occasions. A 2:00.2f win in his final start of 1981 in the Valedictory Series at Greenwood Raceway prompted Norm Clements of Uxbridge and Norm Faulkner of Stouffville to buy the colt for US$140,000. For the next two years he won 58 races in 69 starts. In 1982 and '83 he was voted Horse of the Year by both the USTA and the CTA. His wins at age three included the Cane Pace, Queen City Pace (now called the North America Cup), Monticello-OTB Classic, Prix d'Ete, Messenger, Provincial Cup and the Confederation Cup. At four his 30 wins in 36 starts included the Stewart Fraser Memorial, Canadian Pacing Derby, B.C. Classic, World Cup, Graduate and Driscoll Series, Frank Ryan Memorial, American-National Maturity, Blue Bonnets Challenge Cup, Mohawk Gold Cup and U.S. Pacing Championships at Roosevelt and Sportsmans Park.

Retired to stud in New Jersey, Cam Fella became one of the greatest progenitors in the history of the standardbred horse. He sired 1,002 foals. His offspring accumulated $106.9 million and included 16 winners of at least $1 million and 268 performers that earned $100,000 or more. His millionaires include Eternal Camnation, Presidential Ball, Cams Card Shark, Precious Bunny and Camluck. His daughters proved to be prolific producers as well. Jennas Beach Boy (p,4, 1:47.3) and winner of $1.9 million is out of one of Cam's daughters. Cam's stud career ended in 1997 when he had to be gelded because of cancer. To ensure that Cam Fella's "unparalleled contributions to the sport are never forgotten," Standardbred Canada established "The Cam Fella Award" to recognize extreme effort and dedication to Canadian harness racing by an individual or group."  The Canadian Racing Hall of Fame


So, while venturing off to a myriad of antique stores once again today, I came across an old framed photo of a "Hunt Scene", you know, the ones with the hounds and horn blowing riders?  So you ask..."What does THAT have to do with Cam Fella"?  Absolutely nothing!  It was the print BEHIND it that really caught my attention.  An old framed poster of Cam Fella, signed by his driver, Pat Crowe!  Here it is below:

There's no date on it, just the autograph of Pat Crowe!  And of course, nothing to be found on the internet as to where this poster came from.  So, once again, I ask if anyone knows anything about this poster or even it's value (I got it for next to nothing as far as I'm concerned), please let me know!


Stay safe, keep your hooves on the ground, and keep reaching for the wire!