25 February 2009

Slots Will Have To Close If Fort Erie Doesn't Race

There is absolutely no way that slots can remain open if Fort Erie were to not race this year. The reason is pretty simple. It creates a horrible precedence.

What is to stop Windsor or other tracks from cooking their books a bit (or maybe legitimately having losses), showing a loss, and then stating they won't run races because they are losing money???????

Even Woodbine can get in on the action and move some numbers around to show that Mohawk loses money. What could the government do to prevent them from closing the racing operations, if Nordic can close the doors on horse racing but continue raking in the dough from slots?

It wouldn't take a lot for bigger corporations like Great Canadian Gaming or WEG to be able turn their tracks into bottom line losing operations. How much of a loss would it take for them to halt racing thanks to this potential precedence? How about a dollar or more.

The government needs to tell Nordic like it is. Without live horse racing there can be no slots. Right now, Nordic is using the non commitment by the government as a negotiating tool. The fate of the slots needs to be addressed now, before any further negotiations take place.

The government doesn't want to lose out on the slots revenues. They also don't want to be responsible for another 300 casino employees being out of work. But they have no choice because we could easily see another 10 tracks feint overall losses in the near future, and that would tread completely against why slots were put into tracks in the first place.

The government must make a stand NOW! By not giving a definite as to whether the slots remain open, the price of the track is also a big question mark. Nordic says they lose money even with the $4 million they get from slots each year. A company that loses money isn't worth much. Especially with the realistic little upside that the track has as is (the land can't be worth that much because Woodbine sold the place to Fort Erie over 10 years ago for $10 and assumption of $3 million in debt). But a company that nets $2-3 million a year (and this would be the case for Nordic if it can operate without live racing), is worth anything from $16 million to $25 million.

The least the government needs to do is to fine any racino owner their entire slots cut if they do not have live races. Then Nordic would be forced to be the ones to decide to cut off the slots. This would be due the fact that their property taxes would remain high if the slots operate, but would go down immensely if they were not operating any business on the property.

Here is an update from the Ontario HBPA site:

Good Morning Horsepeople,

The breakdown of negotiations yesterday regarding the purchase of Fort Erie Racetrack from Nordic was disappointing, but not entirely a surprise to all of us involved in the process.

For Clarification:

* The HBPA has been fully apprised and engaged in all negotiations.
* The HBPA fully supports the steps and position taken by the EDTC.
* The rhetoric coming out of Nordic is at best, misleading.
* The EDTC did NOT withdraw the offer. The offer made to Nordic had an 11am on Monday February 23rd deadline. Nordic failed to respond by that deadline.
* The Province is the key to the ongoing success at Fort Erie. The Province & our regulator, the ORC, are fully apprised of the developments.
* Negotiations among all parties will continue and are ongoing as we speak

We, the horsepeople, and particularly, right now, the Fort Erie horsepeople are amazingly committed. You are resilient, proud and dedicated to both our industry and especially to the horses. Now, you have also demonstrated incredible patience.

We can’t promise the final outcome of Fort Erie, but we can promise the effort to save Fort Erie will be fought to the bitter end. I personally, will not be deterred or intimidated by criticism, public posturing, or set backs such as yesterdays.

Please continue to refer to our website.

Respectfully yours,

Sue Leslie

Good for Sue Leslie and calling Nordic liars. If they lie in press releases, imagine what they do with their books. There is no way they are losing the kind of money they claim legitimately.

I have a feeling the government is trying hard, and they thought Nordic was going to accept the deal on Monday.

At a trade show in Niagara Falls last Thursday, Michael Bryant, the province's minister of economic development and Government House Leader said:

.... 'the province provided $2 million to the Fort Erie Economic Development and Tourism Corporation to assist with negotiations to save the Fort Erie Race Track and the Niagara Economic Development Corporation has also received more than $1.9 million to apply to business initiatives.'

"The government has to act now and as quickly as possible, we're investing literally billions of dollars...."

(In an interview with This Week, Bryant said the province is continuing to work on keeping the track in Fort Erie open and residents can expect an announcement as early as next week.) Note: It looks like he was expecting a positive outcome, but obviously that was not the case.

"Fort Erie and potential opportunities with the race track has the government's full attention."

So what are the options?

Fort Erie closes and the slots close. Fort Erie becomes a ghost town. Nordic is stuck with a lot of real estate that will become more and more worthless each day. The Ontario thoroughbred industry will also suffer more. Breeders will have less of a market to sell to. Owners with horses not capable of running at Woodbine will be forced to race in the states. Less owners, less interest in racing overall.

Fort Erie closes but slots remain open. Again, the precedence this would bring with it would cause many tracks in Ontario to at least think about closing the racing side of their operation.

Nordic sells the track. Realistically, it won't happen because Nordic has historically wanted too much money. If the government is intending to buy though, it is to their own best interest to state that without racing there will be no slots, as this will force Nordic to sell at a more realistic level.

Nordic decides to race in 2009 and absorb another year of supposed losses. And pigs can fly.

The government makes an exception for thoroughbred border tracks (ie Fort Erie), where Nordic and the horsemen are to split 35-40% of the slot revenues instead of the usual 20%. This seems like a no-brainer. If the government sincerely wants to keep Fort Erie open, this is what they must do. The government needs to pressure the OLG in changing the slots revenues arrangement NOW!

As for precedence. Again, Fort Erie is an exceptional case being the only other thoroughbred track in Ontario, and the government can deem its existence crucial to the entire thoroughbred industry in Ontario. End of story.

Down The Stretch has a new issue online with an article by Perry Lefko on Fort Erie's current plight.


Anonymous said...

They should also approach the NASCAR guys and ask them if they'd be interested in building a horse track on their site. Oh and by the way here's $2 Million to get you started and you can have slot machines that will rake in another $4 Million every year.

Anonymous said...

What really irks me is that the local MLA says you shouldn't shut down the slots because that would put too manypeople out of work, they have mortgages, bills etc. to pay. So then it's okay to put the horsemen out of work and all of the spinoff businesses that go hand in hand with the racing? Don't we have bills, and mortgages and children in school....?

The slots are there to support the racing side. No racing, no slots!

Anonymous said...

I agree No racing No slots!! I agree what type of precedence would it be setting to allow the slots to continue.
Sue Leslie was kind in using the term negotiations with respect to Nordic.
Another year under Nordic would be just another sorry situation anyway.
Maybe this is what is needed to get rid of Nordic for good. Nordic should be notified immediately that without horse racing there will be no slots, see if that changes anything for them in their extortion demand!!
I also heard(just rumor)that a trainer offered 3M to Nordic for a 2009 race season and was turned down. What does that tell you? They are, oh, so going for slots without racing!
As a resident of Fort Erie- has anyone heard a comment/statement from our town mayor!!

Anonymous said...

I would love to find out more about the history of Fort Erie and Woodbine, maybe you could answer the following questions.
Fort Erie first
1.Who owned the track first
2 Who financed the buildings and stands
3 How did Woobine(ojc) come to own the track.

Woodbine track.
1. What were the conditions attached to E.P. Taylors gift of the track.
2. Did he financed the buildings and stands.