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?
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!