17 October 2012

All Signs Point To Yes For Ontario Horse Racing

The much anticipated OMAFRA Report on horse racing's future in Ontario has been completed. It should be public by the end of the month.

Listening to an interview of panel member John Snobelen it is easy to be very optimistic to believe that racing in Ontario does indeed have a future, and possibly a very good future.

It is my understanding that those interviewed by the panel gave the panel an entire picture of how exactly horse racing works in Ontario as well as giving them a very good idea of how much economic impact horse brings to Ontario, and how disastrous it would be if horse racing were left to stand on its own at this time.

Even though Ontario Premier Dalton McGuinty was able to legally coat his Teflon skin with more grease by quitting and proroguing the House, Snobelen made it pretty clear that the report does not need to be voted on. However, McGuinty could easily defer OKing the recommendations until a new leader is voted on, I still think, listening to Snobelen, that the government will rubber stamp the recommendations understanding the sense of urgency here.

The report will most likely not be to everyone's liking. I expect the track owners to have most of the profits that were earned via slot revenues to be cut drastically (I expect rental agreements with slot racetracks to be large enough to pay for real track expenses in most cases). And then you have the entitled horsemen (you know who you are), many who won't be satisfied unless they wind up getting 125% of the former deal.

I did send in a few of my blog posts in lieu of not being asked to advise the panel directly:) I trust they were read and given serious consideration.

Here are my predictions:

In all likelihood, I think it might be realistic to think that we will see something like a three year deal (where the money comes from isn't important only that it will be a true subsidy this time most likely). I think we'll see anywhere between $100 million to $150 million per year go towards purses and breeding.

I think we'll see a focus on money going towards Ontario bred/Ontario sired horses.

I'm hoping to see major incentives to increase handle as well, something sorely missing from the original slots deal.

Although sports betting will likely not be as popular as they think, I do think it will be mentioned as an additional source of revenue (though it on par with slots and can be called a subsidy whenever the government wants to end the deal). Sports betting will be good for a track like Fort Erie, as long as sports betting has the same juice bookies demand, and as long as the US doesn't have legal sports betting.

I also expect to see wagering terminals to pop up in more locations as well as a provincial or national horse racing lottery to be recommended. This would actually turn into a potential windfall for the industry, and create new Horseplayers.

Speaking of Fort Erie, from what I have heard, the panel is well aware of the necessity of having a B racetrack. Hopefully, Fort Erie will be on the list for a stand alone subsidy, even if it means racing only 60 days a year, it will buy some time for the track to be sold to someone who is interested in horse racing as well as it buys time in case the proposed new Speedway is actually built.

I think we'll see a slight shrinking overall, but it might only affect the hit and run outfits who bring in a horse for one big race and then exit stage right.

The reality is the industry (harness and thoroughbred) can handle a 20% shrinkage as long as the remaining 80% focuses mainly on Ontario bred and owned horses, or American outfits that set up shop in Ontario. All good for the local economies.


Anonymous said...

Who is the author of this material? Where do the numbers come from.

Anonymous said...

Hope you are right.