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Stratford, ON - The Canadian Farm Builders' Association supports the continued business partnership arrangements between the Ontario Lottery and Gaming Commission (OLG) and the horse racing industry in Ontario.
Recent comments made by Dwight Duncan, Ontario Minister of Finance, have suggested that the Liberal government would review the partnership known as the Slots at Racetracks Initiative.
His comments reflect suggestions in the Drummond Report that the McGuinty government, "Review and rationalize the current provincial financial support provided to the horse racing industry so that the industry is more appropriately sustained by the wagering revenues it generates rather than through subsidies or their preferential treatments."
The economic report further recommends that the province, "re-evaluate, on a value-for-money basis, the practice of providing a portion of net slot revenues to the horse racing and breeding industry and municipalities in order to substantially reduce and better target that support."
BACKGROUND
The Slots at Racetracks Initiative began in December 1998. The agreement was created between the Ontario government and the horse racing industry with the objective of promoting live horse racing as well as creating economic development in the agricultural sector, through increased purses, improved quality of horses and enhanced breeding.
Here's how the agreement works: under the Slots at Racetracks Initiative, the horse racing industry receives 20 percent of the total gross slot revenues, with ten percent going to the horse industry, to be invested back into horse breeding, ownership and racing, and ten percent to the racetrack operators. Host municipalities receive five percent of the gross slot revenues on the first 450 machines and two percent on additional machines.
At the end of 2000, the program's first full year, a study done by the Ontario Ministry of Tourism, Culture and Recreation reported that the fledgling agreement that had been beneficial to all parties.
The report recognized that, "The horse racing and breeding industry is an agricultural based industry that is helping to increase and diversify the tourism, entertainment and export economic base of Ontario."
With the Slots at Racetracks Initiative barely in place, the study reported that after only one year the total purses increased by 52.7 percent. Wagering increased by 4.4 percent, and more than $26.2 million was distributed to the host communities in that first year. Total race days for Thoroughbreds and Standardbreds increased by 4.2 percent and total races increased by 10.5 percent in the first year alone.
In 2000, capital expenditures by racetrack operators for track upgrades and construction of new slot machine facilities at racetracks was $319.2 million dollars as the infrastructure was put in place.
Since then the horse racing industry has flourished and so has the money it has helped to generate for government coffers. Quarter Horse racing has joined Thoroughbred and Standardbred racing in the initiative.
A 2011 report by the Ontario Horse Racing Industry Association (OHRIA) indicates that Government revenue from Ontario's horse racing industry has increased by 27 percent over the last ten years with the province of Ontario receiving $261 million dollars a year.
That same OHRIA study also reports a vibrant horse racing industry that employs an estimated 60,000 Ontarians and pays a total of $1.5 billion dollars of wages and salaries each year in Ontario, and it names horse racing as the second largest sub-sector of the agricultural economy in Ontario, exceeding the contributions of hogs, poultry, eggs and wheat in 2010.
The Ontario Harness Horse Association (OHHA), explained in a press release that racetrack slots generated approximately $1.7 billion in 2011, from which the Ontario government paid roughly $355 million in operating costs and approximately $345 million to the horse racing industry to cover its negotiated fee. "That means that last year alone, the government of Ontario cleared over $1 billion from revenue generated at racetracks across the province, without investing a penny in the industry."
CFBA SUPPORTS THE HORSE RACING INDUSTRY
The CFBA and its members believe it is vitally important that the immense benefits of the present partnership with the horse racing industry continue.
"This is not a subsidy, grant or gift to the horse industry. This is a productive, revenue generating, program that is actually bringing in revenues, at an increasing rate, for all the parties involved," said Gary Van Bolderen, President of the Canadian Farm Builders' Association."Do not fix what is not broken."
He points out that direct and indirect investment stimulates local economies with demand for products and services in rural Ontario provided by veterinarians, farriers, hay and grain suppliers, transportation workers and harness and saddle makers, as well as those of us who build the barns and farm infrastructure, to name just a few who depend directly on the horse industry for their livelihood.
"Everyone benefits from the present agreement," said Van Bolderen. "There is no reason to review or change the present program. Local communities have increased revenues, the provincial and federal coffers have more revenue, and the employment of workers in the horse racing industry provides 60,000 good jobs. The horse racing industry is critical to the economic stability of rural Ontario."
The CFBA is strongly opposed to the Liberal government tampering with or destroying the successful agreement between the OLG and the horse racing industry in Ontario.
"Please voice your concerns to your MPP or Finance Minister Dwight Duncan," asks Van Bolderen. "Let them know what the horse industry in Ontario means to you."
To email Mr. Duncan:
dduncan.mpp@liberal.ola.org
To find your local MPP:
http://www.ontla.on.ca/web/members/members_current.do
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