25 October 2012

Standardbred Canada, C'Mon Man

Remember when the now disgraced and humiliated Minister of Finance Dwight Duncan started spewing lies and half truths about the Ontario horse racing industry in the spring? The way I look at it, if you have to resort to falsities to make your case, it either means your case is weak and you need to lie, or you yourself are ignorant of the facts. I think it was a mixture of the two when Duncan went on his selling of the end of slots at racetracks campaign.

I believe the large motivating factor was that he and Ontario Premier Dalton McGuinty were sucked in to Paul Godfrey's Toronto casino pitch, and desperate to reduce the deficit, Duncan and McGuinty forgot they were working for the good of the people of Ontario when they made the decision that facts and due diligence weren't important.

Duncan stressed that the government couldn't afford to give the racing industry a subsidy any longer, calling the revenues tax dollars. During the 14 years tracks and horsemen received a cut of slots revenue, it was clearly a business partnership, not a subsidy, and definitely the tracks were not receiving tax dollars. Even the OLG in their financial reports referred to monies that went to tracks and horsemen as "commissions."

When introduced, the Ontario government was looking for revenue sources, and knowing that slots could easily be introduced at established gambling centers (racetracks), and also knowing that if people voted for slots gambling, the vote would be no in most jurisdictions if done outside a track, a deal was struck. It was also known that cannibalization would occur (the tracks would lose some customers, some of their customers betting dollars, and also lose potential long term customers who would never be nurtured as Horseplayers).

Clearly, what we are seeing right now that if referendums (which the Liberal government made "not mandatory") were introduced, there would barely be a casino built in the future outside of a racetrack locale. Even without referendums, the OLG is having a very difficult time selling many towns and cities on the idea of casinos not located at racetracks. I don't think they had a clue it was going to be this tough. I'm sure Godfrey convinced Duncan and McGuinty that expanded gambling outside tracks would be a slam dunk. The reality is that in most instances, the only place a casino is accepted in Ontario is at a racetrack. This fact means that the OLG is reliant on racetracks to keep their revenue streams, and going forward, it means money coming from whatever new deal can hardly be called a subsidy.

So what does this have to do with Standardbred Canada? Well, they are using Duncan like tactics when it comes to selling their case. On one point in particular. And that is something I've written about here in the past, the percentage of net revenue that the OLG actually makes, both now, and going forward.

My beef with Standardbred Canada is that they perpetuate deceit in stressing that Bingo Halls will receive 47% of gambling revenues going forward, while slots at tracks only resulted in 25% being kept by the tracks, horsemen and municipalities, while also stating that the OLG (the government) made 75% under the old deal.

They are blurring the truth in a big way. Bingo halls are to keep 47% of revenues, however, that is after the bingo halls pay the expenses. If you check out page 16 of the OLG Annual Report, you'll find that the OLG pays the expenses at the racetracks for the casino operations, and after they paid these expenses, as well as the 25% the horsemen, tracks and municipalities received, they wound up with around 48-49% net income.

My frustration over this came to a head a few days ago, when Standardbred Canada decided not to allow my comment to be added on one of their stories, "Burgess Pens Letter To Auditor General."

Here is the rejected comment. It is completely factual, and Standardbred Canada clearly wants to perpetuate the deceit, so they didn't print it:

"Although I agree that the Auditor General should really look into this case, I get tired of seeing the 47% versus 75% case being constantly made. The reality is that after expenses the OLG received around 47-49% net from the Slots at Racetracks Program (thanks to the governments way of overpaying, expenses to run the operations were over 25% on average, which is on par to what they are offering the Bingo Halls right now).
The AG should look into the buying of Bingo Halls over the last few years as well as the fact that Bingo Halls have been on a major decline while Slots at Tracks have remained pretty much the same in recent years as far as net income received by the government is concerned. Why the preference to Bingo Halls? And where was the social and economic impact study that should have done before even considering ending the SAR program?"

I'm not sure if Mr. Burgess is ignorant when it comes to net incomes or if he just bought into Standardbred Canada's propaganda without thinking about it.

It is kind of disturbing that horsemen would be ignorant of these things. Stating the OLG made 75% of slot revenues would be like Dwight Duncan stating that the owner (in harness racing) makes 90% of the purses, overlooking the fact that owners pay day pay, shipping, vets, etc., which in many cases reduces that 90% to a negative number.

Anyway, Standardbred Canada deserves the slap. C'mon Man!

One last thing. The recommendations by the Racing Panel will be released by OMAFRA very shortly (maybe even tomorrow), and I'm optimistically expecting it to be good for Ontario horse racing and rubber stamped immediately. I think we'll see a some shrinkage, but nowhere near the alleged shrinkage George Costanza experienced when coming out of the pool in a classic Seinfeld episode:)

1 comment:

That Blog Guy said...

Don't let the facts get into the way of a good story.