Earlier this week, Ontario’s Auditor General Bonnie Lysyk confirmed what people in Ontario’s horse racing industry have known and lived through for the past two years.
In the Auditor General’s special report on the Ontario Lottery and Gaming Modernization Plan and cancellation of the Slots-At-Racetracks Program (SARP), Lysyk concluded that “OLG developed its Modernization Plan without sufficiently consulting such stakeholders as municipalities and the horse racing industry The profit estimates should have been more realistic, and the abrupt impact on the horse racing industry could have been mitigated had more people been consulted beforehand.”
When it comes to horse racing, the plan was not only misguided, it was downright mean.
As the Auditor General notes, the Liberal government was fully aware that cancelling SARP, which provided $347 million to racetrack operators, race purses, horse breeders and others involved in horse racing in 2012, would have a significant impact on Ontario’s horse racing industry.
According to the report, the Ontario Horse Racing Industry Association estimated in July 2013 that 3,000 horse owners had left the horse-racing industry since 2011; 9,000 jobs had been lost, primarily in rural Ontario; and breeders’ activities had dropped by about 60 per cent. Evidence of the latter was served in April when Ontario’s standardbred horse breeders, who’ve suffered tremendous losses directly linked to the SARP cancellation, were finally forced to take action. Breeders are now suing the province and OLG for $65 million in damages.
Back in 2012, not only did the government fail to consult the horse racing industry, then Ontario Premier Dalton McGuinty and Finance Minister Dwight Duncan took dead aim, saying their government could no longer afford to subsidize horse racing and that the money the industry has received would be better spent on health care and education. The government even launched a mean-spirited media campaign painting the racing industry as a bunch of fat cats feeding off the public trough.
Somehow the Liberal government had conveniently forgotten the genesis of the SARP program and the partnership that was forged.
In the late 1990s, Mike Harris’ Conservatives were determined to tap into the public’s growing appetite for gambling. After a failed referendum that would have allowed the Tories to establish charity casinos throughout the province, the government had no choice but to approach the horse racing industry.
“When people said ‘no’ to expanded gaming, the only place the government could put slot machines was racetracks, because they were established gaming facilities. In the eyes of the public, it wasn’t an expansion into their neighbourhoods,” notes Sue Leslie, president of the Ontario Horse Racing Industry Association (OHRIA).
It was a decision the horse racing industry entered into with trepidation. On one hand, it could infuse much-needed cash into an industry facing mounting competition from ever-growing forms of gambling. On the other hand, by bringing the slots into their tracks, the industry would bring the competition within easy reach of racing customers.
“Both the government as well as the industry at that time knew there would be cannibalization of horse racing’s product. The government was going to use our buildings, our lighting, our parking lots and infrastructure, all for free. They did not have to put up a dime to move into the buildings. In exchange for that, we get 20 per cent of the revenue. It’s so simple and so fair,” said Leslie.
Premier Kathleen Wynne is also trying hard to forget. Since McGuinty’s hasty exit from the Premier’s office, Wynn has been doing her best to distance herself from the OLG modernization plan. OLG Chairman Paul Godfrey was fired; CEO Rod Phillips also left the building and Wynn even decided to slide into the agriculture minister’s chair, partly to help mend fences with rural Ontario and horseracing.
There’s also a cruel irony in the fact that the original Liberal government strategy was to paint the SARP partnership as a subsidy to justify killing it. Now, the government is working really hard to paint the current subsidy as some form of partnership.
Wynne has been playing a slow game of give-back with the horseracing industry ever since taking office. The latest commitment to the industry stands at a $500 million subsidy over five years, a fraction of what the industry earned under SARP. You can understand why blood starts to boil when horse people think about being beholden to government handouts while thousands of slot machines at Ontario’s racetracks continue rake in gambling dollars for the government.
There’s also a cruel irony in the fact that the original Liberal government strategy was to paint the SARP partnership as a subsidy to justify killing it. Now, the government is working really hard to paint the current subsidy as some form of partnership.
How the horse racing industry ends up is really anybody’s guess. A lot may depend on what happens this week when the Liberal government tables its budget. If the budget is defeated and Ontarians go to the polls more change could be coming — both the PC and NDP government have promised to reinstate the SARP program at some level, but racing should expect to get less from any future program.
As horse racing struggles to build a future, one of the few hopeful lights is having the sport integrated in the province’s gambling strategy. To Wynne’s credit, she has insisted that OLG resources be brought to bear to help build a future for horse racing. That could include increased marketing for the sport and offering million-dollar lottery bets though OLG kiosks throughout the province and other new racing-themed gambling products.
It should also be noted that the horse racing industry has come to realize that it needs to be proactive and invest in its future. Horse people have now know that they simply can’t show up, race their horse, take the money and go home. They have to invest. Like dairy farmers who spend millions each year to help milk compete in the beverage case, horse people are finally realizing that racing is their product and they can’t leave it to the individual racetracks to market and sell the game.
In the end, the Auditor General’s report didn’t tell us anything we didn’t already know. Probably the most revealing thing is what we learned about the Liberal government’s approach to public policy. With horse racing and SARP, policy was based on no consultation, denying the facts and a ‘just throw them overboard and see if they can swim’ attitude.
We should demand better from an elected government.
