21 October 2009

Fort Erie 2010: Looking More and More Like A Long Shot

Despite the efforts of the HBPA and the Fort Erie EDTC, the likelihood that live racing will happen at Fort Erie in 2010 is very dim.

Ontario HBPA President Sue Leslie paints a rather grim picture when it comes to the potential sale of the track. "Negotiations regarding the sale of Fort Erie Racetrack are stalling. In our observations the offer made to Nordic Gaming are not in line with their expectations in terms of the racetracks value."

What value? Nordic claims they are losing $3-4 million a year. And the business isn't looking any brighter. Their handles lately have been brutal. They appear to be off around 20% of late at least.

Note to Nordic: You can barely give away a business that loses millions a year. Nordic Gaming doesn't care about that fact. They continue to ask for prices way above the market. If it wasn't for pure "extortion" this year, there would have been no racing at all.

There was government money lying around ($2 million that was supposed to go towards a feasibility project for the smoke and mirrors $300 million expansion) to give away to Nordic. There is no more money left (Nordic has it all), so there are few options left in order for racing to happen at The Fort next year.

So what are the options?

1. Nordic sells the track. Won't happen without a government bail out, as Nordic always want way too much.

2. Fort Erie doesn't open next year for racing. This will crush the already down and out breeding and owning businesses in Ontario. Right now, because of the uncertainty going forward when it comes to B racing in Ontario, there is no claiming going on at Fort Erie, and it is nearly impossible to give a horse away. If there is no out in Ontario for horse owners, demand for Woodbine horses will also get hurt. For one thing, less Fort Erie horsemen means less demand for claimers at Woodbine, and without Fort Erie, there is greater risk claiming one for $12,500 to $20,000 than ever before. If the horse isn't competitive for Woodbine bottoms, the owner pretty much has to ship the horse to the States, and many owners don't want that hassle, and they want the option at least, to watch their horse run live.

The HBPA is now pushing for slots to close if the track isn't open. This could be a great wake-up call for Nordic Gaming if it does happen. It will definitely motivate them to sell, and probably at a very realistic price.

3. Woodbine steps in and leases Fort Erie for $1. They assume all losses for the near future. This does make business sense if Woodbine's goal is to grow horse racing in Ontario and not to kill horse racing in Ontario. But I'm not sure that this is the case. As stated above, if there is no B thoroughbred track in Ontario, breeders will get clobbered as owners continue to become fewer, this time at an accelerated rate.

4. Ajax Downs runs 50-70 thoroughbred dates. This is looking like the most likely scenario. They will have a five furlong track ready to go for 2010. The only stumbling blocks are a rumoured horsemen's agreement where Quarter horsemen were promised that there would be no thoroughbred racing at Ajax through 2010. Contracts can be broken, because everyone has a price. The big negative when it comes to thoroughbred racing at Ajax is the fact they literally have no backstretch. There usually isn't room at Woodbine for B horses, so training B horses off a farm and shipping them in for race day, becomes very expensive and problematic.

5. The government (Finance Minister Dwight Duncan) buys into the Fort Erie EDTC's plan. I'll simplify the plan here: The Fort Erie EDTC wants the government to give the Consortia $15 million a year for six years to replace the proceeds Fort Erie gets from slots (which sits at around $8 million a year). The way I figure the extra $7 million will be used is as follows: $2 million extra to purses (this would be great and would encourage more ownership of horses), $3 million to cover losses (again, this is a must because the EDTC Consortia has no money, and $2 million to lease the track. The latter is a deal killer as far as I'm concerned. Giving Nordic one cent profit would be absolutely absurd.

6. The government (or the OLG) gives Nordic $2.5 million on a year to year basis to cover the losses of the track. This is probably the second most likely scenario, as it keeps Fort Erie open until Nordic finally lowers their price realistically enough to sell the joint (it is a bad time right now to begin with because of all the Magna tracks on the market. There are only so many outfits interested in owning a racetrack out there). Of course, if the government is really smart, they hire me to help get Fort Erie out of the red:) There are many ways Fort Erie can improve their bottom line.

I need to also mention the obvious: Without racing in Fort Erie, the Niagara Region's economy will get hurt big time.

If you want to help encourage the Honourable Dwight Duncan, Minister of Finance save Fort Erie racetrack, email him at (NOTE: It appears the email address may not work):
dduncan@mpp.liberal.ola.org. or fax him at 416-325-0374

For more read Perry Lefko's article in the new issue of Down The Stretch. Down The Stretch also has some early Breeder's Cup selections.


Anonymous said...

Always appreciate your astute comments and analysis.

Your blog should be mandatory reading for all those involved in the ongoing fiasco at Fort Erie.

Anonymous said...

I second hiring you! Fort Erie management is 3/4 of the problem right now. We need some new blood, with a fresh perpective, not the old boys' network.

As for Ajax, why would we want to drive even farther? Woodbine is bad enough if you live in the Niagara/Hamilton area.

If racing is pulled at Fort Erie, then the slots had better shut down as well. If the slots remain open, then you are going to have every small standardbred track in Ontario asking for the same concessions. Oh, wait...maybe this is Woodbine's plan-close down every other track so we're the only game in town...hmmm!?

railbirdbrad said...

Low level claimers need a palce to run,thats the bottom line,can you see WOODBINE being like Turway park,they run $5000 claimers as the majority,And you will travel to Ajax Downs if you have to!

Anonymous said...

Betfair has cut a deal to allow customers to bet into US pools. Tracks include Woodbine and Ft Erie. So in theory, Betfair punters will be playing with the same takeout as the rest of us when they play these pools.

YET, Canadian Betfair customers are not allowed to use Betfair to bet into the US tote. Why is that ?


Cangamble said...

Railbird, I don't think most outfits will exist if they have to race off the farm. When you factor in shipping and training on a farm, it gets to be too expensive when running for cheap.

Betfair customers have the option to bet directly in the North American pools. It might take away from their play on the exchange, but the smart ones will stay on the exchanges for the most part.

Woodbine must have signed a deal which won't allow Canadians to access the parimutuel pools from Betfair's site. It is too bad that Betfair caved. I wonder if Canadian customers will soon be banned from the exchange betting too.

Woodbine operates like a Mom and Pop store with some clout trying to keep Wal Marts away from them. The customer ends up losing.

Meanwhile, they are big enough to become the Wal Mart, but not under their current management which needs to be hoofed out onto the streets.

Anonymous said...

what about ajax and FE running 40 dates each? Split the season dummies.

bullring said...

How could slots be allowed to go on if the horse racing is shut down? The slots only exist because of the racing.

And besides, like someone mentioned above, it will set a terrible precedent.

railbirdbrad said...

How can you claim a horse@ Woodbine for say $20.000 and if hes not a good claim,where do you go?pay your trainer $80 a day for 90 days when you can finally send your horse to the states? dont you think the American trainers will catch on that you are trying to dump your bad claim?Woodbine horseman need an option for such cases as this,Low level claimers need a place to race,

railbirdbrad said...

Its 100% that Woodbine signed a deal with Betfair not allowing Canadians to bet into their tote,They just added Hastings to the menu,i dont think Hastings will fly on Betfair because they are low level claimers and they have ''no name horses and riders,so that should flop!I play Bet fair daily,but I also bet exotics,point being if certain tracks were not posted by Betfair,i would not bet these tracks through Woodbine or any other ADw's,Woodbine loses very little to Betfair because im sure Canadian players on Betfair would not play nearly as often through the Woodbine accounts.

railbirdbrad said...

Did something really go wrong with the 1/9 shot in the 4th race @ Penn national Saturday night Oct 24th,or did the jockeys pound the show pool,the 1/9 pulled up and show prices were $71.80 $110.60 and $ 205.20,