OLG changes spell doom for horse racing industry: OHRIA

If the Ontario Lottery Gaming Corporation carries out proposals to modernize the gaming industry, it will start a downward spiral that will ultimately lead to the death of the horse racing industry in Ontario, according to the president of the Ontario Horse Racing Industry Association.

OLG is proposing to modernize its gaming system, which it states will result in an increase in its revenues by more than $1 billion a year, and would create 2,300 net new jobs in the gaming industry, and nearly 4,000 additional jobs in the hospitality and retail sectors by 2017-18.

Internet-based gaming is growing, the Canadian dollar is higher and U.S. border communities are building their own gaming sites, which means the province's gaming system has to change, the government stated in a press release. These reforms will modernize gaming in Ontario by allowing safe, responsible access to gaming opportunities.

The government has directed the OLG to implement a number of the proposals including reconfiguring the number of gaming sites and tailoring the types of gaming activities made available at each site; launch multi-lane sales of lottery tickets at major retail outlets, including grocery stores; increasing operational efficiencies by expanding the role of the private sector; stopping annual payments to the horse racing industry by ending the Slots at Racetracks program on March 31, 2013 and allowing slot facilities to be located more strategically; implement a new fee model for municipalities hosting gaming sites; and allowing one new casino in the GTA, subject to an OLG business case and municipal approval.

The strategy for land-based gaming and Internet-based gaming is so expansive, the competition for the horse racing industry will be “extremely difficult” to overcome, Sue Leslie, president of OHRIA, said. The OHRIA stated this will be further exacerbated by the fact OLG is proposing to stop annual payments to the horse racing industry by ending the Slots at Racetracks program.

“We knew OLG was looking to expand its land-base gaming,” Leslie said. “Because we are the most profitable partner OLG has - we return more than $1 billion a year - we foolishly thought they would look to us as a partner to expand, so that the horse-racing industry would thrive and the rural community would thrive, and that they would take this partnership and make it even bigger and better.”

OHRIA is still very interested in pursuing that avenue, but OLG doesn't seem to have any interest, Leslie said.

“(OLG has) a proven program that generates more than $1 billion in revenue per year, and that's what they decide to cancel – it doesn't make sense,” she said.

Instead, the change would spell the end to the industry as a whole. Leslie said she, and her peers, were “absolutely shocked” at this announcement.

“The industry as a whole is devastated,” she said. “This is our entire industry that is at stake.”

The changes would have a particularly devastating effect on the small and rural communities, such as Sudbury Downs, she said, as well as on municipalities that rely on horse racing.

“Every time you contract an industry ... as the number of horses decline, as the purses drop, and the race tracks aren't able to be competitive, (municipalities) won't be able to survive as a result, because there won't be any jobs.”

On the surface, the OLG's plans might look good, she said. The government polled Ontarians to see if they would rather support horse racing or the elderly, “a pretty easy question to answer on the surface, but below the surface, they don't really understand that this is a program where the revenues are the very money used to support health care and education.”

It's still too soon for OHRIA to devise a strategy, “but we are going to do everything we can to convince them this is a huge mistake,” Leslie said “When they talk about creating 2,400 new jobs, it also means 60,000 jobs lost, 80 per cent of which are in the rural community.”

For now, Leslie said it's important that the industry stays united.

“I'm sure if we start breaking it down into localities, which I think the government wants us to do, it just weakens our cause,” she said. “We have a lot to do, we have to regroup, and we can't give up.”

The City of Greater Sudbury also received benefits through OLG's slot machine program. The program has yielded millions of dollars in revenue since OLG inked an agreement with the Town of Rayside-Balfour in 1999.

No comment was immediately available from the city.

Posted by Arron Pickard