31 October 2008

What Will Become Of Fort Erie?

A $300-million redevelopment billed as the saviour to all that ails the Fort Erie Race Track has been shelved.
It was shelved before it made news in the first place. The plan made no sense when the economy wasn't gloom and doom, and finally thanks to bad economy, Nordic has come clean.
Nordic ownership is not stupid. They also must realize that recessions only last a year and half usually, so by the time they built the project, the economy would be starting up again. Shelving it now means shelving it forever.
Seriously, why would a company worrying about losses of a couple million a year (supposedly), spend $300 million. What kind of rate of return could they possibly expect by building a hotel and condos in a small town that can barely support two grocery stores?
I'm thinking this plan was a whim that was initiated by the Fort Erie's Economic Development and Tourism Corp(EDTC) shooting the crap with Nordic's management, and Nordic just went along with it, because it could help get a bigger sales price for Fort Erie Race Track, or maybe the government would be stupid enough to finance most of the project.
I'm starting to believe the EDTC and the Fort Erie mayor are either very gullible, very stupid, very corrupt, or a combination of the the three. Mayor Doug Martin has to be included in the mix too. He is coming across as an inept optimist as recently seen by the Save Our Hospital Campaign, which turned out to be another waste of time. I now doubt the auto track will ever break ground in Fort Erie either. The EDTC and Martin are too inept for something so big. The conditions are probably too overwhelming to ever be reality, and the Dubai group probably knows it too.
The reason I even bring up the EDTC is that they helped perpetuate this fantasy project, that was NEVER going to happen. The track could have been sold by now.

So What Happened To The Two Million Dollars The EDTC Squeezed Out Of The Government For The Feasibility Project?
I'd like to know the answer to that one. Apparently it was given to Nordic Gaming. Given to Nordic? How much did they spend? Do they get to keep the balance because they didn't officially call off the project completely, they only postponed it.
Did they spend the $2 million? Is there any accountability?

"We will apply ... we're looking for help from various stakeholders in the track," said Stephen Ayers, without elaborating on exactly what Nordic wants.
"We're looking at some sort of support. We've not worded it yet, it's an ongoing dialogue. It could be related stakeholders, (Horsemen's Benevolent and Protective Association), the town, the province."

It is only another 5 months before horsemen either come back to Fort Erie or don't. And Nordic isn't even sure what their exact goals are and how they will achieve those goals. Nordic has to go. How can they be trusted? It appears they have already fleeced the government out of $2 million for a feasibility study on a project that was insane to begin with.

That being said, I think a case could be made for the horsemen to get a bigger chunk of the OLG casino profits, because Fort Erie is a border track that supports many jobs, and it is one of only two thoroughbred tracks in Ontario, and it is needed as a place for owners to run horses who just can't compete at Woodbine. Without a B track, owners will not have an out anymore if their horse can't make it at Woodbine or if they don't like the Polytrack. Well, the only out is to take them to the US to run, and not only is that expensive, it gives the owner less incentive to even buy a horse with all the risks involved, owners need an outlet for slower horses in Ontario...and many owners get in the game to watch their horse run live, whether it at Woodbine or Fort Erie. Owners are important, because they are what keeps the backstretch in business.

I don't see a corporation making a case for a bigger cut to keep the corporation in business however. If the corporation can't make a profit, or at least break even, force it to change hands. Nordic never gave a rats ass about horse racing to begin with. They are real estate speculators first and foremost. They are opportunists. They took advantage of The Ontario Jockey Club's foolishness (I wonder if it was Willmot's decision) to get rid of Fort Erie for next to nothing just before slots were legalized. But Nordic was foolish too relying on slots to keep the place profitable. They didn't do a thing to grow the horse race betting side, and viewed the race track as a necessary evil (much like WEG views Woodbine horse racing with respect to betting growth).

Can Nordic Keep The Slots Open Without Having To Run Races At Fort Erie?
Don't expect a Niagara journalist to ask this type of question. Unfortunately, I haven't got an answer to this yet. Is there a loop hole that allows the slots to be open? If not, it might explain why Nordic applied conditionally for race dates. They still get to keep the profitable side of their business running until a final decision is made.
Lets say the answer is that they can keep the casino going. The government will still make a fortune from it, and Nordic will be somewhat profitable. This doesn't bode well for horse racing in 2009 and beyond. I wonder what the cut would be? Would Nordic get to keep 20% of the profits instead of 10%, or would the government get the extra 10% since the horsemen will no longer getting it.
Lets say the answer is that they can't keep the casino going. The track is industrial land. It is not feasible to put up a bunch of homes next the Peace Bridge truck fumes. And it is pretty hard to find a company or companies that are mid size or large that will be attracted enough to move to Fort Erie. So Nordic will have a lot of land that is next to worthless, unless they want to relocate the proposed auto track there, that is. Still, bare land in Fort Erie is still cheap to come by relatively, so Nordic won't get much either way if they sold it.
The only thing that makes sense is for another buyer to come along. One that will try to make the horse racing side work. The OLG will support a new buyer because if they can't operate the casino there, they will be out quite a lot of dough. I don't think they would give Nordic that much support considering Nordic's track record of near extortion (saying they won't run unless they get a handout).

It makes sense for Woodbine to buy the track. Isn't Woodbine a non profit organization anyway? They can afford to absorb a small loss in order to keep the B Track in business. What about turning a profit? Surely, WEG can turn a small loss into a profit....LOL...well, not with their current monkey management, and they know it.

FORT ERIE HANDLE DOWN
Like almost every other track in North America:
FORT ERIE, Ontario - Total handle from all sources on the live Fort Erie meet this year, with its 80 live racing days used in a direct comparison with the corresponding number in the 84-date 2007 season, dropped 9 percent from just under approximately $71.5 million to slightly over $65 million.

Overall, the average daily handle was off $80,869 per day, a corresponding 9 percent drop.

The average daily ontrack handle declined from $81,148 to $67,757, down 16.5 percent.
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Cutting out Saturdays was probably responsible for almost half of this drop. But Saturdays are a very bad overall handle day.

Offtrack handle on Fort Erie races averaged $745,547, down 8.3 percent from last year's $813,026.

Purse distribution was up from last year, as an increase from $8.7 million to $9.4 million gave horsemen an additional $680,740 in 2008, a 7.8 percent increase.
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That is surprising. The extra money didn't come from betting, it must have come from slots, or money that was accumulated from the year before.

Other statistics of interest included an identical number of average runners per race in both seasons, 7.8 horses per race. The number of races run dropped from 745 to 725 in 2008 and total number of runners dropped from 5,799 to 5,642, down 2.7 percent.
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Runners were probably down more than they should have because the decision to race came early last year which was late for many horsemen.


Reality Check
Horse racing is trending down in North America at an alarming rate. New horseplayers and new owners (most are introduced to the game because they bet first) are not being created because the game in not competitive with other forms of gambling today (The cost to players ie takeout, is beyond excessive, so nobody wins, and since nobody wins, no buzz is created causing other people to give it a go).
Tracks are closing. The economy is the final nail in the coffin possibly for Fort Erie Race Track.
Fort Erie needs to be sold, or I'm afraid, it will vanish, unless the OLG caves in and gives the owner an unprecedented bigger share of the casino profits.

13 comments:

Anonymous said...

Very well written, your questions are legitimate. You should summit the information to the newspapers!!! I wonder if they have the guts to print it.

railbirdbrad said...

Im giving a game day guarantee,There will be no racing at Fort Erie ever again.I live in the region. bottom line,It's over.Jockey's will be exercise rider's and trainer's will be groom's at woodbine.not all but most.The rest will be on welfare,

Anonymous said...

A quite astute commentary on Fort Erie.

Its closing will be too bad for the horsemen. But there is one way to save it. Namely by all other Ontario racetracks, (both harness and thorobred) to share and/or donate to Fort Erie horsemen, a portion of their own slot revenues currently being recieved for purses. It will be horsemen helping horsemen. Can such a simple idea ever fly?

Cangamble said...

Anon1, feel free to email my post to any press person you deem worthy.

Anon2, you are missing the point. The money that betting and the slots generate get the horsemen by, though minimally. It is the track operation that Nordic says is losing them money. Nordic wants the extra dough for themselves. Good luck getting horsemen to help a corporation. That is just silly to ask for.
Nordic should just get the hell out of Dodge.

Anonymous said...

"Summit" the idea to the newspapers...really. Newspapers report on facts and quote reliable sources.

I would say this story is irresponsible journalism, except for the fact, it isn't journalism at all. This is nothing more than an opinion. There are no sources, or facts behind most of the allegations written.

I am not suggesting there is not more than meets the eye here, but until there are some credible sources quoted, or facts presented, take this for what it is...an opinion.

By the way, there is absolutely no chance that the Race Track will get double the take on slot revenue if they are not racing. OLG is not that stupid. The site holder agreement is very clear on this issue.

If you want an answer on whether OLG can continue to operate the slot facility, why not check with your MP on what the Ontario Legislation states?

Cangamble said...

Anon12:44AM: The point of this post is that there are unanswered questions that need to be asked by the media, or at least I would like to see them asked.
I don't profess to have the answers, and it is apparent to most readers that I'm speculating and taking educated guesses, I don't state otherwise.

thirsty said...

Just had a meeting with a member of Fort Erie Town Council and believe me when I say it is as esy as 50 million only after Nordic turns a profit. As far as the 2 million, ony 400 thousand has been spent on studies etc. Nordic should be looked at as a night in shinning armour. The province is the one holding out. They don't want For Erie to stay open. Every resident of the Niagara Region should personally call Kim Craitor it hey have a financial stake in this. Just through the key away to Fort Erie if it doesn't open. Can you say WELFARE-UNEMPLOYMENT-CRIME & DISASTER FOR THE ENTIRE NIAGARA REGION. CALL YOUR MPP KIM CRAITOR IT'S THE PROVINCE THAT DOESN'T WANT THIS - NODIC WANT THE ROJECT AND IS WILLING TO INVEST 300 MKILLION AND IN RETURN ONLY WNAT'S 50 MILLION ONLY WHEN THEY TURN A PROFFIT- IT'S AS SIMPLE AS THAT.

Cangamble said...

Thirsty, Stephen Ayer has said the project is put on hold because of the economy.
It wouldn't matter if the government OKed it or not.

It isn't a feasible project anyway. It makes no sense.

There are only two solutions: A new owner, or the province gives in and gives Nordic a bigger cut of the slot profits.

Anonymous said...

Time to start up the "Move Canada's Wonderland to Fort Erie" rumours again!

Where's that rich Minor fellow when you really need him? Someone tether some Canada geese to the infield pond and tell him it's "Hialeah North" with its own cold climate flamingos!

Seriously though, I wish all those in the community the best of luck with what seems to be troubled times ahead.

I wonder if there really is some traction in Ajax downs hosting TBs. My guess is no, at least for a while. The QH folks likley want to swim in the slot money for a while before sharing.

KH

The Editor said...

You are so right. I have been asking the same question re: $2 million on my newsblog: http://www.crystalbeachstrand.com/index.html

Anonymous said...

Your an idiot Editor. The only question you've ever asked is "do these stretchy pants make my ass look fat" The answer by the way is YES. One should always consider the source before accepting anything as fact.
http://crystalbeachstranded.blogspot.com/

Anonymous said...

an YOU are an ASS for NOT asking "where is the $2 million"?

Anonymous said...

I know where the 2 million is YOU idiot. Maybe if you ask the question enough times, you'll eventually beleive your own conspiracy theory. Hey Moron, the same people that stole the 2 million are the same that knocked off JFK and they are hiding it in an airplane hangar in Area 51!