27 February 2012

Ontario Liberals Spewing Lies and Half Truths

The Ontario Liberals have now gone over the line in trashing Ontario horse racing and the revenue sharing slots deal that racetracks have at this time.

On the weekend they launched a couple of radio ads.
Text of Ontario Liberal Party Radio Ads

Radio Ad One:
“Did you know that Tim Hudak’s PCs started a secret subsidy for a few, very wealthy racetrack owners? And now in these times of restraint, Tim Hudak says these rich payouts should be protected. He’d cancel full day kindergarden, leaving 50,000 four and five year olds stranded. Are we really going to spend more on horse racing than full day kindergarden? The PCs should do what’s right. Tell Tim Hudak his priorities aren’t your priorities.”

Radio Ad Two:

“Did you know that Tim Hudak’s PCs started a secret subsidy for a few, very wealthy racetrack owners? And now in these times of restraint, Tim Hudak says these rich payouts should be protected. But when it comes to our seniors, he voted against new supports to help them stay in their homes longer. Are we really going to protect horse racing over our parents and grandparents? The PCs should do what’s right. Tell Tim Hudak his priorities aren’t your priorities.”

To actually hear the ads, click here and scroll down.

This is repugnant and slimy politics at its worst. Secret subsidy? For a few wealthy racetrack owners? This is just complete crap. I know politics gets dirty, but resorting to blatant lies to make ones case means that the case might just be very flimsy. I believe that this propaganda campaign launched against horse racing in order to break a deal that has benefited everyone except addicted gamblers is way off base. Also, this is not about tax dollars but after tax dollars earned in a business that governments shouldn't even be in, in the first place.

First off, lets address the secret subsidy for a few wealthy track owners claim. Here are the documented words of David Willmot in 2001 which pretty much explains the origins of the slots deal. Also of note, Woodbine Entertainment is a nonprofit organization (they reinvest their profits), and they account for making close to 50% of the revenues from slots in all of Ontario:

"How we got the slots is that the government was looking around for new sources of revenue, possibly through expanded gaming. Fortunately, we convinced them (and they knew, anyway, from their constituents) that slots in bars and restaurants is a terrible social idea. It is just too “in your face” for the average public. They were also looking at the idea of 44 charity casinos around the Province of Ontario, but reaction from people was the same; “We don’t want 44 charity casinos.” The charity casinos were to be mini-casinos since they were talking about 450 slots and 60tables. That would have been a new intrusion of gaming into many neighborhoods and it was very skeptically looked upon. We took that opportunity to work with government, and we said, “If you put the slots at racetracks, and don’t go with the 44 charity casinos, we can provide you with 70-80 percent of the revenue you were projecting from your total expansion, but we can do so in a socially responsible way in a location where there has been regulated gaming for decades.” We were talking, basically, of destination locations. People have to make a conscious decision to travel to the racetrack to gamble.So, this was a politically safe and socially responsible way for government to expand gaming, and, at the same time, because they were focused on creation and preservation of jobs, to help regenerate a very large agribusiness."

It doesn't sound like a subsidy to me, but a business partnership that benefited both the government and the racing industry. One could even argue that racetracks agreed to receiving too small a percentage.

The reason I state that the percentage may be too small is that this same Ontario government that is now calling the slots agreement a subsidy is venturing out to get into online gambling. They, through the OLG, recently closed an RFP (Request for Proposals) in order to choose a PARTNER that has experience in online gambling.

So lets get the crystal ball out. 2 years from now, the government, still looking at a huge deficit, realizes that there was 1.5 billion in revenue earned from their online sites. However, half a billion stayed with the company that set the whole thing up. How, possibly could the government then call that money a subsidy to the other company? They can't. They would be laughed at. But if you buy into the Liberal propaganda right now, isn't that money they pay the internet company (which will mostly be profits for that company), money that could have gone to all day kindergarten or health care?

This is a disgusting campaign by the Ontario Liberals (it should be noted that Federal Liberal Party has all but marginalized themselves out of the political scene in Canada of late).

It is also seemingly unworkable and if pursued it could get uglier and possibly have illegal ramifications.

Though it is hard to speculate on exactly what these snakes have up their sleeves (OK, snakes don't have arms, but you get my drift), however, I don't see how their plan can work other, than stealing a small percentage of what the current arrangement is.

Logistically, they can't demand that slots stay open, if the track owners get a smaller cut or no cut at all, as the government are only renters.

A government cutting back on spending, isn't about to outlay cash to build new casinos on government property. And a government that is receiving over a billion dollars from slots, isn't about to cut off the source of their revenue....anywhere.

So what are their choices? Partner up with large casino companies (who will wind up receiving a lot more than 20% of revenues) and have them finance new casinos? Doesn't sound like a smart move or one that will increase their bottom line one iota.

Buy out at least some of the tracks? These buyouts generally are at high premiums (they have to be, so it doesn't appear that the government took advantage of a situation that they are creating). Payback from such a buyout will take a decade to recoup. It doesn't fix the current deficit problem at all. The last thing the government needs to do is make bad buys as slot revenues are destined to drop from here on in, if internet slots becomes a reality in the near future.

It may come down to track owners telling the government to get off the property, if the new slots deal is too low. And the government needs to watch itself that they don't put a track into a fire sale position, and then buy out the track. That has lawsuits written all over it. And again, the government is not in a position to close down one slots location as there is no guarantee they will make up the lost revenue at another location.

Finally, the Liberals are shooting themselves in the foot through lies and propaganda. In the internet age, the truth generally wins out. If they keep this nonsense up, they will be the next marginalized political party in Canada.

An online petition was started on Friday, and it has over 5,000 signatures. If you haven't signed it, what is wrong with you?

The Thoroughblog also touches on the scummy tactics used by the Liberal government. Check out the promises McGuinty made to the horse racing community when he was begging for votes.

Tim Hudak (the Conservative Party leader) and the NDP both promised to keep things status quo with respect to the slots agreement. Now that Ontario has a minority government, it will be very telling if either party backs down on their stance.


Anonymous said...

Where do the the big breeding farms stand with all this???? With all these new Stallions in Ontario why have we not heard from them? None of this makes any sense!!!!

That Blog Guy said...

So where are the horse racing industry radio ads explaining what is happening?

Anonymous said...

People would rather go to the casino. Let horse racing die,its a joke at best with the cheating that goes on.

Anonymous said...

People would rather go to the casino. Let horse racing die,its a joke at best with the cheating that goes on.

Anonymous said...

Liberal Democrats,PETA etc.are not friends of Horseracing.

Tim said...

Gee, American style attack ads. I thought Liberals were against that.

@ Anonymous (5:30)
Are you also in favour of doing away with politics because of all the cheating that goes on?

warlord said...

What happens if there are contracts with some racetracks that extend longer than 2013? Can OLG just walk away? Do they have escape clauses? When does WEG's contract expire?