Ontario Government Thinking Of Privatizing Slots

What Happens If The Ontario Government Sells Off Casinos?
The Ontario government is thinking about selling their Crown assets. These include Hydro One, Ontario Power Generation, The LCBO, and the OLG (Ontario Lottery and Gaming Corp.). The OLG runs all casinos in Ontario.

There still is no decision as to whether some, none or all of the Crown's assets will be sold or when they will be sold.

OK, lets look at the possible repercussions. First off, I can see the Niagara Casino and Windsor Casino being sold outright to a large Vegas based company. A company without any experience in gaming isn't going to buy the casinos. This would be good for the customer. We will see more perks. Free drinks for the shooters as well.

Now what about racetrack slots? One thing to keep in mind is that the OLG does not own the slots or the buildings where the slot machines are found. The individual tracks own all that. The OLG owns the slot machines, and their most important asset is the right to make money from those slot machines. For use of the track's building and because of the known fact that slots cannibalizes horse racing, the OLG pays all expenses to run slots and pays the track 10% and the horsemen another 10% of the profits from slots, as well they pay the township where the slots are located another 2-3%.

The best possible solution is for the OLG to sell the rights to operate slots to the individual slots. Owners of tracks have already undergone major background checks before the ORC allows them to operate a race track.

Secondly, bringing in a third party to run the slots could cause major hardship to the racing industry. Right now the OLG is pretty complacent when it comes to potential customer crossover. But get a slot operator that has its only source of income coming from gamblers losing at slots, and we might see more aggressive behavior towards potential crossover. For example, if Joe Smith loses $200 playing slots, the casino winds up over $150, the track and horsemen get $20 each. If Joe Smith loses $200 at the track, the track and horsemen wind up with over $80 each (and the casino gets nothing). It is to the tracks best interest that the gambler playing horses, and it is to the casino operator's best interest that the casino player doesn't even know horse racing exists. This could cause a hostile environment.

I'm not sure that the government can just give racetracks first right of refusal when it comes to buying the slots operations, or if they have to take the best possible offer. But it does make sense that tracks will be willing to pay the most for the operations since they can potentially cut down their labour costs and other operating costs by running both operations under the same management.

The government can simply give the tracks a 10 to 20 year mortgage to pay for the slot's operations, while still getting around 3-4 cents on every dollar wagered through the machines in the form of a tax.

Racetracks will wind up making more than the 10% they make now. Most of the extra will be used to pay down the mortgage debt. They might be in a position, in the case of Fort Erie for example, to offer a bigger cut to purses (than the mandatory 10%) if the racing game continues to sink.

The government will still have rules in place, including the 10% of slot profits that goes to purses, and they will hopefully enforce the rule that if there is no racing, there is no slots.



Teen Arrested For Having Sex With Horses
Happened at the oldest active track in North America; The Goshen Historic Track. "This guy makes Michael Vick look like a charter member of PETA," Village police Chief James Watt said.


Canadian Harness Tracks Gets Proactive: Canada One Racing Looking To Get More Bettors In North America To Be Exposed To Canadian Harness Racing

Not surprisingly, Woodbine Entertainment Group (WEG) has decided not to participate in the project. For one thing, if Canadian harness racing is put on the map, Woodbine and Mohawk would benefit regardless, and secondly and most importantly, horse racing has become a necessary evil over at WEG. WEG is now only concerned about taking what they can without spending much money. They realize that they are not offering a product that the general public wants, and with their high takeout rates, they know by now, they just can't attract new people anymore. They've given up on horse racing. Instead of changing prices and being an industry leader, their focus is now staying afloat so they can expand their profitable business (slots and potentially other casino games).

Canada One is potentially looking to embrace exchange betting. Exchange betting or not, Canadian harness racing is in a position to become a leader when it comes to lowering takeout rates collectively (can we say 12% across the board?), and getting a tremendous head start versus their thoroughbred industry rivals.


More Cuts At Woodbine
Besides recently firing the parking lot staff a few weeks ago, I also heard a rumour that Jennifer Morrison was released from her duties of odds making (including the Winter Plate Book). She will also not be giving handicapping seminars either. I emailed Jennifer and she confirmed the rumour is in fact reality.

What a stupid move by Woodbine. Jen's Thoroughblog is a source for many Ontario thoroughbred horsemen to get a daily dose of what is happening pretty much at Woodbine. Getting her to spend less time at Woodbine will cause her to have less insight on the daily goings on there, and it naturally gives her less incentive to give Woodbine positive advertising (something you won't find my here at Cangamble). Hundreds of people (mostly from Ontario) visit her blog daily. I guess she can afford to be more controversial now.

Like I wrote earlier, Woodbine is giving up on horse racing. I wonder if the Score and racing SUN TV will be affected too. Last year, Woodbine cut the talking heads from their HPITV telecasts. Woodbine may have been up 6% in handle but their real income was most likely down, and the way it is going, the trend will continue.

If you want to complain to Woodbine about Jennifer Morrison's dismissal, call 1-888-675-7223 or 416-675-7223.

Woodbine Lowers Track Takeout On Triactors Slightly

Here is a release from Woodbine Entertainment, with my comments added (of course):

Effective Wednesday, June 17, Woodbine Entertainment Group will reduce the takeout on its live thoroughbred and standardbred triactors to a total takeout of 27%, from 28.3%, when all of the mandatory regulatory deductions are included.

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Though it is encourage to see that a takeout rate has been reduced in North America, lets not get too excited. With this drop, Woodbine now has gone from having the 68th highest triactor track takeout to now being tied for 66th (out of 71 tracks). They "zoomed" by Fort Erie (28.2%) thanks to this drop.

Unlike U.S. racetracks where taxes are primarily applied to winnings, Canada has its taxes applied as a percentage of wagering. More specifically, mandated regulatory deductions account for 6.8% of wagering or about 24% of Woodbine Entertainment Group's (WEG) total triactor takeouts, the majority of which is represented by the province's 4% Horse Improvement Program.

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That is not the consumer's problem. From a customer's standpoint, this is still no justification to have the 66th highest takeout. There are 56 tracks with takeouts of 25% or less, and they all make less than Woodbine does right now when taxes are taken out. And it isn't like the H.I.P. program doesn't help Woodbine's business by making it more lucrative to own a horse running at Woodbine and helping the field size as well because of the purse structure. Bigger fields equals more betting.


WEG's efforts to make its live race triactors more competitive by replacing this excessive pari-mutuel levy with a slots-based levy have been rejected by horsepeople's associations.
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Nobody said the horsepeople's associations understand growth. But again, it is up to Woodbine to explain the situation better to them (they have failed obviously). But it is still good to know that the HPBA are a bunch of collective self serving fools. I knew that already.


Simultaneously, in order to partially offset $1 million of new simulcast costs demanded by some Churchill and Magna controlled tracks, triactor takeout rates on these simulcast signals will increase to the same 27% total takeout including all mandatory deductions.
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Tracknet has increased signal fees. This hurts the bettor in a big way. Woodbine too, charges a high signal fee, so they aren't innocent here either. And upping the takeout rate to 27% by Woodbine should be deemed illegal. Canadian customers will be getting ripped off even more by WEG if they play Magna or Tracknet tracks. For example, if a triactor pays $810 at Churchill at Churchill, those playing through American ADW's and at Churchill, as well as at simulcast locations will get $810. If someone takes the same risk and cashes the triactor on HPI or Woodbine controlled tracks, the payoff will be $730. This means that nobody should be betting these tracks through HPI. There are alternatives. And players must use these alternatives.

The tracks affected are Arlington Park, California thoroughbred tracks, Churchill Downs, Fair Grounds, Gulfstream Park, Oaklawn Park and Pimlico Racecourse. California regulations also mandate an additional 0.5% on their tri pools.
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Again, if you place a bet on these tracks through HPI or at a track under Woodbine's umbrella, you are a mooch.


WEG understands the sensitivity of price increases but believes that limiting the increase to only tri pools on a small number of tracks is better than the alternative of Churchill and Magna pulling their simulcast signals from the Canadian market.
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Translation: WEG relies on players being suckers and mooches.

As a net result of all these changes, WEG will still absorb approximately 90% of these increased costs or $900,000 per year, in an effort to minimize the impact to its customers. The recent simulcast agreement with Churchill and Magna will ensure their signals remain in Canada at least until the spring of 2011.
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I won't be betting Tracknet or Magna tracks though WEG, so it really doesn't matter to me. It is hard enough to try to beat this game without getting ripped off because a company (WEG) puts itself way ahead of the customer.

If WEG cannot afford to pay out the exact amount that a triactor pays, they should not offer the product, and the government should take steps to not allow them to get away with upping the takeout rate to suit their bottom line.


HANA Pool Party
We are encourage players to put some money in the 9th Race at Monmouth tomorrow. The race is the Monmouth Stakes. Free past performances for the race, thanks to TrackMaster and PaceFigures.com. Strike A Deal might have the fitness edge, but since he is 0 for four at the mile and an eighth distance (with two seconds and a third), he looks like one to include in the exotics, but hard to key on in the first position.


Great article on Presque Isle Downs by someone who really gets it

While some things have improved, others haven't. The sky-high takeout rates that are in place at all Pennsylvania tracks remain in place. Takeout is the set percentage of money taken from a betting pool and not redistributed in winning payoffs.

..............Horseplayer and former economist Maury Wolff has estimated that for every one percentage point increase in takeout, handle decreases between 7 percent and 8 percent. For six consecutive years, Tampa Bay Downs has decreased takeout levels at the start of their meet, and it's no surprise that their racing product has enjoyed a rapid increase in popularity over that time frame.

Management is right when they tell you most bettors don't know that the $470.40 Superfecta payoff they collected on a race at Presque Isle Downs would pay $534.40 had the same race been run at Keeneland Race Course because of the difference in takeout rates between the tracks. However, what most management types fail to realize is that people who get more money back tend to bet more and come back more often, while those who get less back tend to bet less and in a lot of cases give up on the game altogether............

...............Presque Isle Downs has developed a reputation as a track that cares about its own slots players and cares about keeping the horsemen content, but does not care about the horse player.

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Presque Isle, Woodbine, Fort Erie, the list is pretty big when it comes to that last line.