Driving through the red tape

News Sep 08, 2011 Flamborough Review

From horse and buggy contests to a high stakes sport, harness racing has become an economic driving force for Ontario. Part two of Off Track, an exclusive series by Metroland West reporters Catherine O'Hara and Christina Commisso, examines the bureaucracy involved in this important sector of the agricultural industry.

Following the heyday of the '70s, when thousands gathered at post time, the crowd in the grandstand eventually grew sparse and the allure of the races began to fade. It was clear the horse industry needed a lifeline.

The $2.6-billion business, the second largest in the agricultural sector, was an economic engine in Ontario's rural communities. The Ontario Horse Racing Industry Association looked to the province for help. The province, in turn, saw a chance to cash in.

The answer came in the form of glittering machines that eat up cash quicker than you can flip a switch. Since introducing slots at the racetracks, billions of dollars have funneled into Ontario's horse business. But industry experts say the model is broken and in need of repair – fast.

"The public policy of slots at racetracks was to enhance live horse racing and support the agricultural industry," said Brian Tropea, general manager of the Ontario Harness Horse Association (OHHA).

"As it is now, the racetracks receive their money and there's really nobody to see that they are reinvesting it back into marketing, promoting or creating incentives to bring people to the tracks to grow the horse end of it."

Since 2002, the Ontario Lottery and Gaming Corporation (OLG) has distributed $1.45 billion to racetracks and $1.43 billion to horse people, money used to fund their winnings. The cash injection had horse people from around the globe flocking to Ontario for their share of the lucrative purses. But any long-term vision for the racing industry was left at the starting line.

Impact

"When the slot program began, the government was more concerned about opening facilities as quickly as possible, and, in my view, not enough attention was paid to the program itself; what impact it would have and how it would really operate," said Stanley Sadinsky, the former Ontario Racing Commission (ORC) chair, who, in 2007, was asked to head a panel on the state of the horse racing industry.

The panel spent a year touring racing facilities, talking with horsemen and crunching the numbers. There was no doubt the slots swelled the pockets of horse owners, trainers and drivers and trickled down to the grooms, blacksmiths and hay farmers. But what was being done with that money was – and still is – an unknown.

"None of us know where this money has gone to, but people are starting to ask those questions now," said Flamborough's John Williamson, an OHHA director.

Site holder agreements between the province and racetracks included the establishment of benchmarks to ensure slots revenues are reinvested into the tracks. More than a decade has gone by since the agreements were signed and to date, the lottery corporation has yet to develop the benchmarks.

OLG spokesperson Don Pister said that under the leadership of a new chair, Paul Godfrey, the benchmarks are now at the top of the "to-do" list.

"The new board made it one of their earliest priorities to ask for better information from the horse racing industry so everyone can better understand how the slot money has been used to improve horse racing in our province," said Pister.

Racetrack owners were tasked to provide the OLG with detailed reports on how they've used the slots revenues, such as spending the funds on facility improvements or new business ventures, and how they intend to use the slots monies in the future.

These comprehensive accounts, noted the spokesperson, aim to provide better transparency and more accountability for the OLG.

Benchmarks

"All of the tracks responded – it did take some time. We are now working with the ORC and with the government to go over that information and we are in the process of creating relevant industry-wide benchmarks," said Pister.

"Certainly, there are efforts being made to start benchmarking the Slots at Racetracks program more carefully," said Wendy Hoogeveen, the ORC's director of industry development and support. The benchmarks, she explained, will serve as an "excellent opportunity for the industry to tell its story back into government about the value of the program."

And it's the information garnered from the establishment of benchmarks that will have an impact on the horse racing industry. "It will help the government in decision-making with respect to the future," said Hoogeveen.

Benchmarks or no benchmarks, Woodbine Entertainment Group (WEG) says over the years it has used the OLG money to become a leader in the North American horse racing industry.

"I think we've exceeded the criteria," said WEG's vice president of standardbred racing Bruce Murray.

The not-for-profit organization operates Woodbine and Mohawk racetracks along with two up-scale Greater Toronto Area restaurants that offer off-track betting. Murray said WEG has invested $300 million since 1997 in its facilities, including a $7-million facelift for Mohawk in 2005.

"We wager 75 per cent-plus of the dollars bet in Canada, the rest of the tracks collectively are betting 25 per cent. That's a telltale sign itself we're doing everything we can to ensure the health and well-being of our company and of the industry," said Murray, while touring Mohawk's expanded backstretch, an on-site facility that world-class veterinarians, trainers and drivers call home.

Being a not-for-profit agency, said the vice president, gives WEG a huge advantage over neighbouring tracks.

"If we were publicly traded, you're totally bottom line driven; it's all about share price and having the stock at certain level. Our advantage (is that) any profits are reinvested back into the industry."

Do other racetracks make the necessary reinvestments? Murray said it's a "mixed bag," adding, "Some do a terrific job at promoting themselves and others do not do as good of a job, and that's just an observation."

Flamborough horsemen believe Great Canadian Gaming Corporation, the British Columbia-based owner of Flamboro Downs and 16 other tracks and casinos in North America, could stand to further promote harness racing and upgrade its facilities.

"They aren't putting enough time into their business to promote harness racing," said Paul MacKenzie, who made the move to Ontario from his native Prince Edward Island more than 30 years ago with hopes of making a better living as a trainer and driver.

Since Great Canadian Gaming, a publicly traded company on the Toronto Stock Exchange, acquired the Hwy. 5 track six years ago, MacKenzie says little improvements have been made to the facility. "Nothing stands out that would make me a lot happier," he said.

Howard Blank, Great Canadian Gaming's vice president of media and entertainment, referred Metroland to the company's financial reports for a detailed list of its track expenses.

Marketing budget

"I'm not going to discuss funds that we receive and how we spend," said Blank. "We have a marketing budget for that facility that our company uses to work on trying to attract special races, special events, promotions, media, advertising, etc.

"We have a budget like we do at every single property."

With a declining interest in harness racing in Ontario – and beyond – track owners like Great Canadian Gaming have to think outside of the box to attract patrons to the grandstand and horse people to the paddock. "Racing, especially standardbred racing, has seen declines over the years," said Blank.

According to the ORC's annual statistical report for the fiscal year ending March 2010, 18,783 licences related to standardbred racing were issued in 2009, a more than 17 per cent drop in the number issued in 2005.

In an attempt to increase attendance, revenues and enjoyment of harness racing at Flamboro Downs, Great Canadian Gaming is working with its partners and horse racing industry stakeholders, explained the vice president.

"We are not in the business to obviously lose money," said Blank, who believes there remain numerous opportunities to appeal to new patrons and get them interested in harness racing.

At its tracks in British Columbia, Great Canadian Gaming has hosted family-oriented events to entice families to spend some time at the facility. Families, said Blank, have also been invited to attend community-centered events and promotions at Flamboro Downs.

But more of those types of incentives are needed, say local horsemen.

• • •

Next week: Keeping harness racing alive for future generations,

Driving through the red tape

News Sep 08, 2011 Flamborough Review

From horse and buggy contests to a high stakes sport, harness racing has become an economic driving force for Ontario. Part two of Off Track, an exclusive series by Metroland West reporters Catherine O'Hara and Christina Commisso, examines the bureaucracy involved in this important sector of the agricultural industry.

Following the heyday of the '70s, when thousands gathered at post time, the crowd in the grandstand eventually grew sparse and the allure of the races began to fade. It was clear the horse industry needed a lifeline.

The $2.6-billion business, the second largest in the agricultural sector, was an economic engine in Ontario's rural communities. The Ontario Horse Racing Industry Association looked to the province for help. The province, in turn, saw a chance to cash in.

The answer came in the form of glittering machines that eat up cash quicker than you can flip a switch. Since introducing slots at the racetracks, billions of dollars have funneled into Ontario's horse business. But industry experts say the model is broken and in need of repair – fast.

"The public policy of slots at racetracks was to enhance live horse racing and support the agricultural industry," said Brian Tropea, general manager of the Ontario Harness Horse Association (OHHA).

"As it is now, the racetracks receive their money and there's really nobody to see that they are reinvesting it back into marketing, promoting or creating incentives to bring people to the tracks to grow the horse end of it."

Since 2002, the Ontario Lottery and Gaming Corporation (OLG) has distributed $1.45 billion to racetracks and $1.43 billion to horse people, money used to fund their winnings. The cash injection had horse people from around the globe flocking to Ontario for their share of the lucrative purses. But any long-term vision for the racing industry was left at the starting line.

Impact

"When the slot program began, the government was more concerned about opening facilities as quickly as possible, and, in my view, not enough attention was paid to the program itself; what impact it would have and how it would really operate," said Stanley Sadinsky, the former Ontario Racing Commission (ORC) chair, who, in 2007, was asked to head a panel on the state of the horse racing industry.

The panel spent a year touring racing facilities, talking with horsemen and crunching the numbers. There was no doubt the slots swelled the pockets of horse owners, trainers and drivers and trickled down to the grooms, blacksmiths and hay farmers. But what was being done with that money was – and still is – an unknown.

"None of us know where this money has gone to, but people are starting to ask those questions now," said Flamborough's John Williamson, an OHHA director.

Site holder agreements between the province and racetracks included the establishment of benchmarks to ensure slots revenues are reinvested into the tracks. More than a decade has gone by since the agreements were signed and to date, the lottery corporation has yet to develop the benchmarks.

OLG spokesperson Don Pister said that under the leadership of a new chair, Paul Godfrey, the benchmarks are now at the top of the "to-do" list.

"The new board made it one of their earliest priorities to ask for better information from the horse racing industry so everyone can better understand how the slot money has been used to improve horse racing in our province," said Pister.

Racetrack owners were tasked to provide the OLG with detailed reports on how they've used the slots revenues, such as spending the funds on facility improvements or new business ventures, and how they intend to use the slots monies in the future.

These comprehensive accounts, noted the spokesperson, aim to provide better transparency and more accountability for the OLG.

Benchmarks

"All of the tracks responded – it did take some time. We are now working with the ORC and with the government to go over that information and we are in the process of creating relevant industry-wide benchmarks," said Pister.

"Certainly, there are efforts being made to start benchmarking the Slots at Racetracks program more carefully," said Wendy Hoogeveen, the ORC's director of industry development and support. The benchmarks, she explained, will serve as an "excellent opportunity for the industry to tell its story back into government about the value of the program."

And it's the information garnered from the establishment of benchmarks that will have an impact on the horse racing industry. "It will help the government in decision-making with respect to the future," said Hoogeveen.

Benchmarks or no benchmarks, Woodbine Entertainment Group (WEG) says over the years it has used the OLG money to become a leader in the North American horse racing industry.

"I think we've exceeded the criteria," said WEG's vice president of standardbred racing Bruce Murray.

The not-for-profit organization operates Woodbine and Mohawk racetracks along with two up-scale Greater Toronto Area restaurants that offer off-track betting. Murray said WEG has invested $300 million since 1997 in its facilities, including a $7-million facelift for Mohawk in 2005.

"We wager 75 per cent-plus of the dollars bet in Canada, the rest of the tracks collectively are betting 25 per cent. That's a telltale sign itself we're doing everything we can to ensure the health and well-being of our company and of the industry," said Murray, while touring Mohawk's expanded backstretch, an on-site facility that world-class veterinarians, trainers and drivers call home.

Being a not-for-profit agency, said the vice president, gives WEG a huge advantage over neighbouring tracks.

"If we were publicly traded, you're totally bottom line driven; it's all about share price and having the stock at certain level. Our advantage (is that) any profits are reinvested back into the industry."

Do other racetracks make the necessary reinvestments? Murray said it's a "mixed bag," adding, "Some do a terrific job at promoting themselves and others do not do as good of a job, and that's just an observation."

Flamborough horsemen believe Great Canadian Gaming Corporation, the British Columbia-based owner of Flamboro Downs and 16 other tracks and casinos in North America, could stand to further promote harness racing and upgrade its facilities.

"They aren't putting enough time into their business to promote harness racing," said Paul MacKenzie, who made the move to Ontario from his native Prince Edward Island more than 30 years ago with hopes of making a better living as a trainer and driver.

Since Great Canadian Gaming, a publicly traded company on the Toronto Stock Exchange, acquired the Hwy. 5 track six years ago, MacKenzie says little improvements have been made to the facility. "Nothing stands out that would make me a lot happier," he said.

Howard Blank, Great Canadian Gaming's vice president of media and entertainment, referred Metroland to the company's financial reports for a detailed list of its track expenses.

Marketing budget

"I'm not going to discuss funds that we receive and how we spend," said Blank. "We have a marketing budget for that facility that our company uses to work on trying to attract special races, special events, promotions, media, advertising, etc.

"We have a budget like we do at every single property."

With a declining interest in harness racing in Ontario – and beyond – track owners like Great Canadian Gaming have to think outside of the box to attract patrons to the grandstand and horse people to the paddock. "Racing, especially standardbred racing, has seen declines over the years," said Blank.

According to the ORC's annual statistical report for the fiscal year ending March 2010, 18,783 licences related to standardbred racing were issued in 2009, a more than 17 per cent drop in the number issued in 2005.

In an attempt to increase attendance, revenues and enjoyment of harness racing at Flamboro Downs, Great Canadian Gaming is working with its partners and horse racing industry stakeholders, explained the vice president.

"We are not in the business to obviously lose money," said Blank, who believes there remain numerous opportunities to appeal to new patrons and get them interested in harness racing.

At its tracks in British Columbia, Great Canadian Gaming has hosted family-oriented events to entice families to spend some time at the facility. Families, said Blank, have also been invited to attend community-centered events and promotions at Flamboro Downs.

But more of those types of incentives are needed, say local horsemen.

• • •

Next week: Keeping harness racing alive for future generations,

Driving through the red tape

News Sep 08, 2011 Flamborough Review

From horse and buggy contests to a high stakes sport, harness racing has become an economic driving force for Ontario. Part two of Off Track, an exclusive series by Metroland West reporters Catherine O'Hara and Christina Commisso, examines the bureaucracy involved in this important sector of the agricultural industry.

Following the heyday of the '70s, when thousands gathered at post time, the crowd in the grandstand eventually grew sparse and the allure of the races began to fade. It was clear the horse industry needed a lifeline.

The $2.6-billion business, the second largest in the agricultural sector, was an economic engine in Ontario's rural communities. The Ontario Horse Racing Industry Association looked to the province for help. The province, in turn, saw a chance to cash in.

The answer came in the form of glittering machines that eat up cash quicker than you can flip a switch. Since introducing slots at the racetracks, billions of dollars have funneled into Ontario's horse business. But industry experts say the model is broken and in need of repair – fast.

"The public policy of slots at racetracks was to enhance live horse racing and support the agricultural industry," said Brian Tropea, general manager of the Ontario Harness Horse Association (OHHA).

"As it is now, the racetracks receive their money and there's really nobody to see that they are reinvesting it back into marketing, promoting or creating incentives to bring people to the tracks to grow the horse end of it."

Since 2002, the Ontario Lottery and Gaming Corporation (OLG) has distributed $1.45 billion to racetracks and $1.43 billion to horse people, money used to fund their winnings. The cash injection had horse people from around the globe flocking to Ontario for their share of the lucrative purses. But any long-term vision for the racing industry was left at the starting line.

Impact

"When the slot program began, the government was more concerned about opening facilities as quickly as possible, and, in my view, not enough attention was paid to the program itself; what impact it would have and how it would really operate," said Stanley Sadinsky, the former Ontario Racing Commission (ORC) chair, who, in 2007, was asked to head a panel on the state of the horse racing industry.

The panel spent a year touring racing facilities, talking with horsemen and crunching the numbers. There was no doubt the slots swelled the pockets of horse owners, trainers and drivers and trickled down to the grooms, blacksmiths and hay farmers. But what was being done with that money was – and still is – an unknown.

"None of us know where this money has gone to, but people are starting to ask those questions now," said Flamborough's John Williamson, an OHHA director.

Site holder agreements between the province and racetracks included the establishment of benchmarks to ensure slots revenues are reinvested into the tracks. More than a decade has gone by since the agreements were signed and to date, the lottery corporation has yet to develop the benchmarks.

OLG spokesperson Don Pister said that under the leadership of a new chair, Paul Godfrey, the benchmarks are now at the top of the "to-do" list.

"The new board made it one of their earliest priorities to ask for better information from the horse racing industry so everyone can better understand how the slot money has been used to improve horse racing in our province," said Pister.

Racetrack owners were tasked to provide the OLG with detailed reports on how they've used the slots revenues, such as spending the funds on facility improvements or new business ventures, and how they intend to use the slots monies in the future.

These comprehensive accounts, noted the spokesperson, aim to provide better transparency and more accountability for the OLG.

Benchmarks

"All of the tracks responded – it did take some time. We are now working with the ORC and with the government to go over that information and we are in the process of creating relevant industry-wide benchmarks," said Pister.

"Certainly, there are efforts being made to start benchmarking the Slots at Racetracks program more carefully," said Wendy Hoogeveen, the ORC's director of industry development and support. The benchmarks, she explained, will serve as an "excellent opportunity for the industry to tell its story back into government about the value of the program."

And it's the information garnered from the establishment of benchmarks that will have an impact on the horse racing industry. "It will help the government in decision-making with respect to the future," said Hoogeveen.

Benchmarks or no benchmarks, Woodbine Entertainment Group (WEG) says over the years it has used the OLG money to become a leader in the North American horse racing industry.

"I think we've exceeded the criteria," said WEG's vice president of standardbred racing Bruce Murray.

The not-for-profit organization operates Woodbine and Mohawk racetracks along with two up-scale Greater Toronto Area restaurants that offer off-track betting. Murray said WEG has invested $300 million since 1997 in its facilities, including a $7-million facelift for Mohawk in 2005.

"We wager 75 per cent-plus of the dollars bet in Canada, the rest of the tracks collectively are betting 25 per cent. That's a telltale sign itself we're doing everything we can to ensure the health and well-being of our company and of the industry," said Murray, while touring Mohawk's expanded backstretch, an on-site facility that world-class veterinarians, trainers and drivers call home.

Being a not-for-profit agency, said the vice president, gives WEG a huge advantage over neighbouring tracks.

"If we were publicly traded, you're totally bottom line driven; it's all about share price and having the stock at certain level. Our advantage (is that) any profits are reinvested back into the industry."

Do other racetracks make the necessary reinvestments? Murray said it's a "mixed bag," adding, "Some do a terrific job at promoting themselves and others do not do as good of a job, and that's just an observation."

Flamborough horsemen believe Great Canadian Gaming Corporation, the British Columbia-based owner of Flamboro Downs and 16 other tracks and casinos in North America, could stand to further promote harness racing and upgrade its facilities.

"They aren't putting enough time into their business to promote harness racing," said Paul MacKenzie, who made the move to Ontario from his native Prince Edward Island more than 30 years ago with hopes of making a better living as a trainer and driver.

Since Great Canadian Gaming, a publicly traded company on the Toronto Stock Exchange, acquired the Hwy. 5 track six years ago, MacKenzie says little improvements have been made to the facility. "Nothing stands out that would make me a lot happier," he said.

Howard Blank, Great Canadian Gaming's vice president of media and entertainment, referred Metroland to the company's financial reports for a detailed list of its track expenses.

Marketing budget

"I'm not going to discuss funds that we receive and how we spend," said Blank. "We have a marketing budget for that facility that our company uses to work on trying to attract special races, special events, promotions, media, advertising, etc.

"We have a budget like we do at every single property."

With a declining interest in harness racing in Ontario – and beyond – track owners like Great Canadian Gaming have to think outside of the box to attract patrons to the grandstand and horse people to the paddock. "Racing, especially standardbred racing, has seen declines over the years," said Blank.

According to the ORC's annual statistical report for the fiscal year ending March 2010, 18,783 licences related to standardbred racing were issued in 2009, a more than 17 per cent drop in the number issued in 2005.

In an attempt to increase attendance, revenues and enjoyment of harness racing at Flamboro Downs, Great Canadian Gaming is working with its partners and horse racing industry stakeholders, explained the vice president.

"We are not in the business to obviously lose money," said Blank, who believes there remain numerous opportunities to appeal to new patrons and get them interested in harness racing.

At its tracks in British Columbia, Great Canadian Gaming has hosted family-oriented events to entice families to spend some time at the facility. Families, said Blank, have also been invited to attend community-centered events and promotions at Flamboro Downs.

But more of those types of incentives are needed, say local horsemen.

• • •

Next week: Keeping harness racing alive for future generations,