A transition panel of former Ontario cabinet ministers is calling for a major restructuring of the way the province’s horse racing industry operates.
The panel, made up of former cabinet ministers Elmer Buchanan, John Snobelen and John Wilkinson, released its final report last week to agriculture minister Ted McMeekin, but has yet to disclose how much provincial money should go into the transition.
In an interim report released earlier this year, the panel had called for $50 million in provincial funding to assist the industry with the transition after the provincial Liberals announced an end to the $345 million Slots At Racetrack Program (SARP) that saw race tracks annually receive funding from Ontario Lottery and Gaming Commission (OLG) casino profits.
The panel later ruled that $50 million was insufficient to assist the industry, but in its final report no figure was disclosed, pending the outcome of negotiations between the industry and the province.
“We feel strongly that publicly releasing some of the estimates therein, particularly sensitive financial information concerning the amount of public support required for race tracks, would not be in the public interest today,” the task force members said, referring to their decision not to release how much provincial funding will be needed in the transition.
“We advise that this information should be withheld until such time as the government and the industry have concluded their negotiations.”
The panel believes any new public funding for horse racing should be reviewed after three years, and monitoring should be ongoing to ensure the investment is meeting public-policy objectives and delivering no more funds than necessary to do so.
The panel is also calling for the industry to explore alternative revenue sources, streamline its regulatory procedures and reduce the number of race days.
“The panel found a genuine willingness within the industry to build a new partnership with the government based on the public-interest principles,” the final report states. “In consultation with stakeholders, the panel has developed a new sustainable horse racing model for the conduct and management of horse racing in Ontario.”
With the end of SARP funding, which provided 63.6 per cent of purse money to the industry, the panel is calling for purse money to come from the industry’s share of pari-mutuel wagering. The report also calls for a total of 800 race days annually – or about half of the current schedule.
The panel is recommending a change in the way the Ontario Racing Commission (ORC) operates and is proposing it divide its operation from administrative and regulatory to just regulatory.
“The administrative function should be transferred to a new industry-led entity within no more than three years. The ORC would then have a purely regulatory role,” the panel recommends.
The Ministry of Agriculture, Food and Rural Affairs should be responsible for oversight of the industry through the ORC and the ongoing monitoring of the new racing model to ensure the pubic interest is protected, the report recommends.
The panel is recommending several potential revenue-producing options, including a racing-specific lottery, Sports book (betting on single sporting events), and a new pari-mutuel product called historical horse racing that involves betting through an electronic terminal on the outcome of past races, which are not identified to the player.
“These new products could potentially generate revenue that could be used to offset the need for direct funding, enhance live racing in Ontario and return revenue to the treasury,” the panel concluded.
The panel is also calling on horse breeders and owners to establish lifecycle plans for horses to guide their care when their racing careers end. At the same time the panel recommends public funding for developmental work to assist in the effort.
Wellington-Halton Hills MPP Ted Arnott pointed out that despite the panel’s call for immediate negotiations with the horse industry to discuss its recommendations, “the clock is ticking.”
Arnott said the decision by outgoing Premier Dalton McGuinty to prorogue the legislature means the government can’t respond with any new legislation on a new horse industry plan prior to the March 31, 2013 deadline when SARP funding will end.
“The days are fast approaching when the government has to make a decision,” Arnott said. “I would hope optimism by the task force members can be embraced by the government.”
Perth-Wellington MPP Randy Pettapiece added, “For months, the government has left the horse racing industry hanging, with no idea of what the future holds. They need some certainty so that they can begin planning for the future.”
Dr. Ted Clarke, general manager of the Grand River Raceway, doesn’t believe the shutdown of the legislature will prohibit an agreement that, according to him, can be worked out based on government policy, not legislation.
Clarke said he hopes the recommendations contained in the report will assist the industry in pulling together an operating system prior to the March 31 SARP deadline. The general manager said prior to the government announcement, the industry was divided on how it should operate.
“The mechanism that has been followed so far has not been necessarily unifying,” he said. “I think it will happen if we are to go forward.”
Clarke credited the panel report with making the government aware of the role the horse racing industry has on Ontario’s economy.
“The panel has convinced the government perhaps the industry is a much larger enterprise than what they first considered it was,” Clarke said, referring to the government’s first intention to stop SARP funding without any consideration of the impact it would have on the industry.
Clarke said he hopes all sides can work on finding a solution. “The report gave a model. It gave an opportunity to create a solution,” he said.
