Report: No Fort Erie Racing In 2009; 190 Employees Laid Off

NOTE: Most recent updates and thoughts can be found on the bottom of this post.

There was a meeting today between employees of Fort Erie and management today.

The first report has come from Rich Newburg:

190 Employees Out of a Job

FORT ERIE, CANADA - Fort Erie Race Track has announced there will be no thoroughbred racing in 2009.

190 employees, both union and non-union, will be laid off. A meeting is being held this afternoon at the track to notify employees.

The track has been losing money for the last several years, due in part to the installation of slot machines in all race tracks in Ontario, along with the competition from casinos in Niagara Falls, Ontario and Niagara Falls, NY.

Senior Correspondent Rich Newberg will have the latest on News 4 at 5 and 6.
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The Niagara Falls Review isn't sure yet. UPDATE: Now the Review is up to speed.
'What is known is Mayor Doug Martin is making preparations to hold a press conference Tuesday morning at Town Hall to make a statement on what everyone is assuming is bad news for the track, those who work there and for the community.

“Obviously this is a meeting between the owner and the employees," Martin told The Niagara Falls Review a short time ago. "It’s confidential between them. Once we understand what the full dynamics of the situation is we’ll be having a press conference at in the morning."'
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More To Come
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Biz Journal Reports:
“It’s in serious doubt,” said Daryl Wells, track spokesman. “We’re losing money and Nordic is unable to keep sustaining those losses.”

'The track is also home to a 1,200 slot machine operation run by the Ontario Lottery & Gaming Corp. The slots, which have an average daily attendance of 2,623, will remain open for “the foreseeable” future, an OLGC spokesman said.'

This is a first for the OLGC. They have never had a track with slots go under before. The slots were supposed to compliment the racing industry. As stated here before, if the horsemen get over $4million from slots each year, the track owner also gets $4million from slots. That means the total profit from slots is over $40million per year right now. This means the government (OLGC) makes over $32million net. They do incur all the expenses from the slots operation though, but how much can that be a year? I see them doing everything they can to keep the Fort Erie slots open, but I also see that they don't care much about the track being open, or they could have relinquished a few million in profits to keep live racing going.
I still can't see that even with the $4million from slots that the track actually loses $7million a year. It just doesn't make sense.
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THOUGHTS AND RUMOURS
I just heard (a rumour?) that Fort Erie management signed over a check to the HBPA for over $2 million which is the horsemen share of the slots money to date not paid out in purses yet.

What should happen to that money? Give it to the horsemen who won purses the last two or three years at Fort Erie who earned 1-2-3 placings prorated on a percentage basis?

Give it to whoever runs the B races? Will it be Ajax Downs or Woodbine who winds up giving owners the out that Fort Erie provided if the track officially closes?

A "B" track is a necessary in Ontario for thoroughbreds (there are tons of B tracks for standardbred here). There are horses who don't poly and others who just can't compete for low claiming at Woodbine. Breeders and owners know that their horse is a possible Fort Erie horse from the get go. But take away the B track out, and there will be less owners getting into the game, especially when faced with having to go to the trouble and expense of having to go to the states with a cheap horse if they don't cut it at Woodbine.

There is also the rule that states if you claim a horse in Ontario you have to wait 90 days or for a meet to end to be able to run in another jurisdiction.

Owners who made not so great claims at Woodbine could at least run for cheaper within 30 days at Fort Erie. Now, without a B track or a plan to have cheap races in Ontario, owners will be stuck.

Nothing is official yet. Until a contingency plan is announced that states Woodbine will run extra races or that Ajax will take on 50-60 thoroughbred dates. The government could still give in to Nordic's demands and bail them out. Woodbine or another party could buy or lease the race track. There are still options, but I wonder if anyone who can make something happen cares enough.

If Ajax Downs gets the dates, I would like to see a thorough investigation of the government officials that gave Ajax the idea to put in a 5 furlong track when he did.
It just smells funny, because I was told by a source before the summer that Ajax already knew they were getting the thoroughbred dates.
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Actual press release from Jen's blog:

Nordic Gaming Corporation, the owner and operator of Fort Erie Race Track, held a meeting today with its employees who work on the horse racing side of their business.

The purpose of the meeting was to inform those employees that it appears that the Fort Erie Race Track will not be able to continue live racing in 2009. While Nordic will pursue every effort to try and find a way to continue racing in 2009, there are regulatory requirements that the Company must comply with, thus these employees were advised that their employment was being terminated effective March 31, 2009. This notice immediately impacts approximately 190 employees.

This decision has been a difficult one for the company; one which Nordic has delayed for several years. As most people are aware, the company has spent the last two years focusing on efforts to “Save the Track”. Over that time every effort has been expended to find a solution to keep the track operating. Nordic has, and continues to work, with all of the stakeholders, including the various Unions and their members. However, the company is unable to continue to absorb the substantial operating losses year after year, and hence the reason for the decision to begin preparing for closure.

The company will be working with its employees and their union representatives to keep them informed of all significant information in the coming weeks and months. In that regard Nordic will comply with it’s obligations under their collective agreements as well as with the Employment Standards Act.

Nordic has also notified The H.B.P.A. OF ONTARIO and The Ontario Racing Commission of this pending action by virtue of their application for race dates to the Ontario Racing Commission, as well as in meetings and conversations with both organizations. Both these bodies have already taken action with respect to this issue, and they both have communicated those actions through public communications.

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Another rumour has the slots closing on December 31st. Can't see that happening though, but who knows?
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SIEU wants McGuinty to renegotiate slots deal with Fort Erie so that the owner can get bailed out
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From the Review:
Niagara Falls MPP Kim Craitor said a meeting has been scheduled for this afternoon in Toronto involving senior-level track officials and representatives of Ontario’s Economic Development and Trade Minister Michael Bryant.

Craitor, who has rearranged his own schedule to attend those talks, said it’s possible the meeting could resolve the situation.

He wouldn’t say what Nordic Gaming is asking for or what the province is willing to do to help.

“We have some things on the table,” said Craitor. “You can’t directly fund the race track. I mean, it’s a private business. That’s just the reality, but we want to keep it open, we want to figure out a solution to this.”

Craitor continued: “This (meeting) is about how to keep the track operating and what commitments will we (the government) be able to get from them so that we’re not going to go back at this next year.”
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This could be an affective ploy by Nordic Gaming. Getting a $3 million per year commitment from the government increases the potential sales price (which right now might be in the negatives) by up to $20 million. Nordic definitely wants out.

My source, who told me that Ajax was getting the B racing (I was told in the early summer or late spring), said that the powers that be don't like Nordic and want them out of there.

I have a feeling Nordic has two sets of books. One set shows a tremendous loss (the one the government now knows about). The other shows the track is possibly profitable. That one is for potential buyers. I could be wrong, but with all the business Ponzi schemes being discovered, I just don't trust any company that is a subsidiary of a subsidiary of a subsidiary.

It just doesn't make sense that harness tracks that have more race dates and probably have equal purse money to hand out from their portion of slots can show a profit where Fort Erie shows a loss. It makes no sense at all. I can understand that thoroughbred tracks pay more insurance than harness tracks, and Fort Erie has to also pay for a backstretch, when many harness tracks do not, but how much more does that cut into their costs....surely not $3 million a year.
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Mayor says that this isn't a ploy to pressure the government
Timing of the layoffs coincide with Ontario labour laws according to Martin.
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Talks continue There will be no long term solution as long as Nordic still owns the joint.
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In today's Toronto Star: MPP Sees Some Hope In Talks About The Track

Today's rumour: The government wants to look at Nordic's books, but Nordic is refusing. If true, this is not shocking, because how can they possibly be losing money when tracks like Beulah and River Downs get by without slots.

Again, if the rumour is true, how possibly can the government even consider bailing out Nordic, if Nordic won't play ball?