16 March 2012

Lets Recap What The OLG Is Really Doing

The Drummond Report came out recommending that the Ontario government revisits the slots deal it has with racetracks.

It didn't take long for Dalton (Norman Bates) McGuinty and his sidekick Dwight (Have Another Donut) Duncan to start lying about the relationship between racetracks and slots (calling slots revenues tax dollars and stating they were subsidies to the tracks) and then hinting that racetracks may lose all or some of their slots revenues.

In what seems the time it took to read the Drummond Report, border Racinos in Fort Erie, Hiawatha, and Windsor were told that their slots were going to be eliminated by April 30th this year, but that the government will make sure tracks are able to operate and purses accounts will be (close to) maintained for another year as long as these tracks race.

Of course, more lies were used by the collective PR of the OLG and Ontario Liberal Party, stating these Racinos were losing money. Revenues are way down, but the only track that is close to break even is Fort Erie, and it is doubtful that the OLG was losing a dime there.

OK, so the macro reason for the slots closures has to do with the budget, or so they claim. But why close them so quickly? Because the main agenda item is to prop up the revenues for the 4 stand alone casinos (Niagara has two) that are very close to proximity to the 3 Racinos that had the slots taken away. The goal by the government is to sell these casinos (before online gambling erodes these numbers down again), and the reality is that these casinos actually do lose money.

The fact that the government is paying lots of severance to slots employees and lots of money to the three tracks for the lost slots revenues over the next year shows that immediate deficit reduction is what this move is all about, nor is it about changing the ratio of what tracks get to keep on slots revenues.

In fact, the government has made it clear that it wants to privatize all slots and casino operations within the next year or so, which means that the OLG will not have to worry about paying slots employees, maintaining machines, etc. The gaming operator will now take over that function. The question again is what will the new cut be if a track takes over the operation, and what will be the deal with expanded slots as well as online gaming which is expected in the near future.

The government is attempting to get out of paying for the expenses of gambling, and they are looking to sell their assets (by the way, someone should clue in Puppet Progressive Conservative leader Tim Hudak that what he wants is what the government is looking to do).

This isn't really what the Drummond Report said to do, but this is the new direction the government is taking. Let gambling competition run amok, and tax the gambling company as much as it can (without having no gambling companies interested in doing business with an untrustworthy government in Ontario).

Hudak meanwhile, is not getting the big picture. The government is looking to put slots anywhere and everywhere, which means that Fort Erie and the other tracks should have had the opportunity to keep them. But the selling of the casinos is the reason they were taken away abruptly.

I wonder if Fort Erie, Hiawatha, and Windsor have a legal case by having their rights denied to compete to have slots, and the way in which this was done (especially if it turns out that the other tracks will be given the choice to operate slots).

Down the road, once the government decides what their new cut is going to be on slots and how and for what price they will sell the location rights, the rest of the tracks that have slots will make their decision as to whether to operate or not. Once the Niagara Falls casinos as well as those in Windsor and near Sarnia are sold, Fort Erie may have the opportunity to buy the rights to operate slots, unless part of the sale of the casinos will have a clause that no other gambling operations can be put up within a 25 mile radius, for example.

I have to say though, Duncan, McGuinty, and Paul Godfrey make me sick with their lies and misrepresentations. Hudak, if he wasn't so clueless and wasn't so badly managed, could have been the Ontario leader right now, and one thing is for sure, this wouldn't be going down like it is right now. I also believe that there would be no closures either, nor would racing be destined to die at any location in the near future either.

The next stage in the game for the Ontario Liberal Party and OLG is to believe they are entitled to have gamblers gamble with them. It won't work as long as they maintain their Pro-Line odds mentality. See "Is Horse Racing in Ontario the Fall Guy For Government Mismanagement?"

Note: The photo above is circulating on Facebook (where I happened to come across it). McGuinty has pissed off quite a few people. Even I find the message a bit harsh but decided it fit in well with the blog piece.


Anonymous said...

Doesn't anyone see the tracks that lost their slots were in direct competition with the 100% owned OLG casinos. That's why the slots were taken away without discussions or options. 80% not enough for OLG.

Now, don't you find it suspicious that Woodbine is no where for comments!

Part One:
Well, I believe we will see Woodbine become the new T.O casino location (of course with a new deal on the slot revenues). Perhaps purses will have to be dropped, but, with the highest purse structure in North America it shouldn't prove to be a major hardship.

Part Two:
In this new deal Woodbine will have all the financial resources, tax breaks etc. of the govn't in their newly formed partnership to construct the new tourist Woodbine Entertainment facility. hotels, restaurants,golfing,skating, etc.

By forming this new realty partnership with the government/for a lesser percentage of slot revenues will have allowed Woodbine to diversify their revenue flow from pure gaming to tourist entertainment center.

Of course, not all of the plan will be announced. A respectable amount of time would be allowed between each in the hope no one is matching the dots or cares anymore. Toronto residents will be happy because they don't want a casino in Toronto.

It is all smoke and mirrors.

And for Fort Erie, a delay of coming up with a plan asap, will result in racing gone. The Prince of Wales race will be gone to Woodbine forever. If there is any interruption of Fort Erie's yearly race meets, the track will loose its main historic race and will never get it back.

Fort Erie looses big time in this plan for Woodbine Casino. I think there should be some kind of legal recourse as Fort Erie is the only thoroughbred racing track is the 3 tracks to have slots taken away completely without any options, when the OLG will be coming up with new agreements for other non thoroughbred tracks.
I believe Fort Erie has been selected against because it has thoroughbred racing!

This is only my opinion on how I think this scenario will play out.

Anonymous said...

That is the absolute truth!!!!!

Anonymous said...

I'm sure things will start to happen now! The mayor has just returned from his week's vacation, while the town was being flushed down the toilet.

I guess his comments were via telephone.

Destruction of the town and the mayor
is on vacation? What's with that?

Anonymous said...

d-bag mguinty wants an issue to campaign on in case his budget gets defeated next week. so its horse racing vs full day kindergarten. Hmm a secret subsidy for the Ontario Teachers pension plan? Isnt that the richest pension fund on the planet??

Not to mention all the non-union daycare workers and babysitters fool day kindergarten will put out of work..

Mark said...

Thank you for taking the time to research the information for this post. I am not sure who wants what but there's definitely something in the middle of all these actions.