20 March 2012

Are The OLG and Liberal Government Flying By The Seat Of Their Pants?

This modernization plan by the Ontario Liberal government and the OLG is starting to remind me of a Jackie Mason monologue: Do you know whats going on with slots and the racetracks? I don't know but someone else must. Where can I find this someone else? Start with Dalton McGuinty, he seems to know most of what needs to be known. But does he know everything? Not everything, maybe the OLG knows everything. They don't seem to know everything either. I think they thought they knew everything, but they don't know everything anymore. How about Finance Minister Dwight Duncan? He seemed to know everything too, but he doesn't know everything now, except maybe when it comes to donuts.

To make sense of the above, we'll have to look at some real information and real laws that are now coming out of the woodwork.

First, in my previous post, I stated that slots were taken away rather quickly from Fort Erie, Hiawatha and Windsor race tracks because it is the OLG's goal to sell the nearby casinos, so by taking away the slots from the tracks, the bottom line revenues for the casinos would go up making them more attractive to buyers.

Looks like I was wrong as it is illegal for a private company to both own/lease and operate a casino in Ontario according the Criminal Code of Canada, unless exceptions are made. Exceptions are not a gimme when there is a minority government whose popularity has shrunk since getting elected only 5 months ago.

These laws throw a monkey wrench when it comes to the idea that racetracks can have privatized gaming. The racetrack right now owns the property that the OLG is leasing from them. If a racetrack or even another business were to take over the operations on the tracks, that would mean that the OLG is neither leasing, owning or operating the casino. This is against the Criminal Code, unless a loophole exists that they can get away with just leasing gambling equipment to make it a go.

So in Fort Erie's case, lets say that the $30 million in revenues a year caused a break even for the OLG after operating expenses and the amounts paid out to the track, horsemen and municipality. Even if $5 million of that makes its way over to Niagara Falls, that is $5 million more bottom line for the OLG and the operators of the Niagara casinos.

Now by taking away the slots without giving a privatization option to these border tracks, the province and OLG have declared these tracks as nothing but competition. And I'm sure they are hoping the tracks close down completely so that if any gambling is done, it will be on OLG product. It sounds slimy, but heck we are talking about McGuinty here.

The biggest news that came out today is that McGuinty has stated that Municipalities can hold referendums when it comes to introducing new casinos (like in Toronto). Well, according the OLG Act of 1999, a referendum MUST be held. With the recent poll that shows 60% of Torontonians against a new casino, the likelihood of a yes is far from a sure thing. Unless, those bottom dwelling Liberals can pass new legislation regarding a referendum having to be held (and I wouldn't it put it past them).

In fact, the way the laws are written now when it comes to bringing in a new casino, there are quite a few hoops to jump through.

It appears right now that the Liberals and OLG have written a check their asses can't cash. Who knows, maybe they'll decide to leave well enough alone. For the racing industry, its many direct employees, and the many businesses these employees support or help support, one can only hope.

UPDATE: McGuinty has said that the provision to have a mandatory referendum has lapsed. So that means McGuinty has one less hoop to jump through. He can bully a new casino through in Toronto now, and even if the majority of Torontonians want a referendum, politicians can do what they do best and lie or come up with an excuse for not having to do a referendum.

Bottom line, no one has even mentioned what the split will be on the new privatization deal, and this reinforces my belief that there isn't a person who knows everything yet.


For my American readers who might be confusing Ontario or Canadian Liberal Parties with political liberals in the USA, every political party in Canada is to the Left of the US Democratic Party. The Federal Conservatives and the Ontario Progressive Conservatives are to the right in the Canadian political spectrum, with the Liberal Party on the Left, and the New Democratic Party closer to the Far Left.

Personally, I'm a social liberal (by American standards), while fiscally I'm close to the centre (center in American language).

One final note: Kim Craitor, the Liberal representative for the Niagara Region (including Fort Erie) has had threats against his life and now fears to set foot in Fort Erie. Craitor, took a lot of credit (whether he deserved it or not) when a deal was made to save racing at Fort Erie three years ago, but he was nowhere in sight when an OLG gunslinger came to town last week to take away the keys to the slot machines at the track.

Politicians don't need to have their life jeopardized (besides the fact that one can get jailed for doing the threatening). You get even with them by voting them out.


Wendy Wolff said...

Just a thought...If the OLG's plan is to redirect the current slot machines to their own casino's in order to make them a sale-able commodity....would that not put them into FEDERAL ANTI-TRUST and UNFAIR COMPETITION territory.? I would think that their partners,ie: the track owners and the horsemen would have an arguable complaint to register. Just a thought:)...Wendy Wolff

March 20, 2012 5:59 PM

Cangamble said...

Hi Wendy. I'm not sure what the laws are, but what the government did by not giving the Municipalities involved the ability to privatize the slots at the 3 racetracks appears pretty illegal to me, especially if the idea was to benefit the operators of the other casinos.

Anonymous said...

I believe Fort Erie Racetrack has a legal case against their OLG business partner who has not acted in good faith and has selected against them, which will become more apparent when Woodbine becomes the new T.O. casino location.

Lets not forget how successful the Liberals were with the Skydome in the 80's. Original building budget 50M, final costs 500M, then sold years later to Rogers at a fire sale price for something like 29M.

Trust me, the Niagara Casinos will
not be anymore successful regardless of the number of slot machines. They will be sold and it will be to foreign investors.

One thing this government can do is sell off Canada piece by piece.

Anonymous said...

I think a lot about Mr.McGinty. He appears to me to be three bricks shy of a load. Remember when he was first running for office. He had the answer to everything. He promised us the world! We elected him.
Then he said:"I didn't know there was a five billion dollar deficit" Well Duh!! Didn't every one in Ontario know that the "unpopular" Mike Harris had cut the deficit from eleven billion to five billion? Had McGinty been living under a rock? What has happened to the decicit since he came to power?? He has been grasping for straws and telling us lies since he was first elected. And we were stupid enough to re-elect him. Frankly, I don't believe he is running the show. I think there are many strings from his office to back room skuldugery at Queen's Park! Just sayin'.

Anonymous said...

Most politicians that know they are at they end and not to be elected again have to push things through that they promised to people that got them elect!! He is going to do what ever it takes to keep his back door promises!!! McGuinty is a very dangerous man right now and hopefully the Ontario people will realize this!!

Tommy Massis said...

ive always told my U.S. friends our far right in Canada is to the left of Obama