1 / 11

Enhancing and Advancing Horse Racing in Ontario

Enhancing and Advancing Horse Racing in Ontario Presentation to Hon. David Caplan Minister of Public Infrastructure Renewal August 30, 2005 This Presentation About OHHA The Economics of Racing OHHA’s concerns: Lack of accountability? Who is in charge? Next Steps About OHHA

Download Presentation

Enhancing and Advancing Horse Racing in Ontario

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.


Presentation Transcript

  1. Enhancing and Advancing Horse Racing in Ontario Presentation to Hon. David Caplan Minister of Public Infrastructure Renewal August 30, 2005

  2. This Presentation • About OHHA • The Economics of Racing • OHHA’s concerns: • Lack of accountability? • Who is in charge? • Next Steps

  3. About OHHA • The ONTARIO HARNESS HORSE ASSOCIATION was formed in 1961 by an interested group of owners, trainers, and drivers of standardbred horses. The purpose of OHHA: • to represent Ontario harness horsemen in negotiations of purses, racing conditions, and all matters affecting the industry as a whole • Liaise with the tracks, Standardbred Canada, the Ontario Racing Commission, and the Provincial and Federal governments. • After 40+ years of service to the industry, OHHA’s role has expanded to include not only negotiation with the tracks, the ORC and governments, but: • Ontario Lottery and Gaming Corporation regarding slot agreements • Management and disbursement of the revenue from the purse pool • Promotion of racing and the standardbred industry through Ontario Sires Stakes programs, OHHA race dates and tracks, a speaker’s bureau, advertising, youth camps and media days • Creation of OHHA benefit and group RRSP Programs • OHHA currently represents over 5,700 members • OHHA has recently ended its participation in OHRIA

  4. The Economics of Racing • The standardbred industry accounts for slightly over 2/3 of Ontario’s race horses, with thoroughbreds accounting for the remaining nearly 1/3. • Standardbred racing revenues are 70% from live racing • Thoroughbred racing revenues are 30% from live racing with the balance being driven through importing of foreign racing product for viewing/wagering • Since the introduction of slots revenue in 1998, purses offered by race tracks in Ontario for standardbred racing have more than doubled, to $189 million (2002 figures) • Wagering at race tracks during this time remained relatively constant, so the increase in purse money has come primarily from the slots revenue. • Our track owner partners have a wide range of approaches to business • Agricultural societies to large corporations • Some consolidation and new owners in the industry as well • The business environment and relationship with tracks is not consistent across the industry which is sometime challenging

  5. The Economics of Racing • The standardbred horse racing and training industry is an agricultural -based industry that has linkages throughout the agricultural sector, supporting-service industries, and the rest of the Ontario economy. • This industry has a particularly important impact on rural areas, where most of the business activity is located. • Huge multiplier effect • One of the few agricultural areas that is growing and thriving in the current economy • Our investment in each horse is a 4-5 year one as they are bred, raised, trained and, hopefully, raced • Major growth in the export of yearlings and aged racehorses • Since slots, additional revenues have been reinvested into Ontario’s rural economy to the tune of 4,100 jobs with an estimated annual payroll of $154 million that ultimately is re-circulated back into the economy (OLGC Estimates) • Critical to remember that the horse industry plays an important role in the entertainment industry, providing the horses to support racing and associated activities at race tracks throughout Ontario

  6. RACE PURSE 90% 5% 5% OWNER DRIVER TRAINER Investments Feed Bedding Equipment Labour Farrier Veterinarian Truck Trailer Buildings Track CARE & TRAINING FEES BREEDERS For New or Replacement Stock Investments Feed Bedding Equipment Labour Farrier Veterinarian Truck Trailer Buildings Track Broodmares Foals Yearlings Stallions The Economics of Racing: We need to race to continue to grow • Racing purses fund the day to day financials for our industry • Growing the purse pools spurred the initial expansion of the industry • Decline in racing opportunities can offset gains and affect the entire industry • If horses are limited in their ability to race, the pool of purse money is immaterial

  7. The Economics of Racing: Ways for the industry to grow • Slot revenue growth – increases purses • Some consensus that this has almost reached a peak • SLOT OPERATIONS NOT TIED TO RACE DATES • Slots are open whether the track is dark or not • Pari-mutuel growth – increases in betting grow revenue to the industry and interest in the racing business generally • Betting on track, some revenue from betting at teletheatres, telephone betting, some revenue from betting on Ontario tracks at other locations • We derive the vast majority of our revenue from live racing in Ontario • Priority for OHHA to build this line of business for the industry to continue to thrive as it grows the interest in the business itself • Generate new investments by owners, drive growth in other racing related businesses • DIRECTLY LINKED TO RACE DATES • Alternative forms of wagering – PRO-LINE? • Have been piloting projects with OLGC – Daily Double – to build interest in the sport but for no new direct revenue • Would like to pursue some other alternatives with OLGC to generate increased revenues to the industry if possible

  8. OHHA’s Concerns: Are the slot agreements being respected? • When slot agreements were signed with OLGC, many, if not all of the agreements created a formal linkage to the success of the on-site racing: • Supposed to be facility enhancements for horsepeople as well as slots patrons • Agreements called for benchmarks to measure the growth and success of the racing business at the tracks and for audited financial statements to be provided as a measurement of some of these benchmarks • These were to be enforced by OLGC • Problem is that these benchmarks and accountability measures remain invisible within the system • ORC, not OLGC is engaged in a business plan review and asks for benchmarks as part of race date applications • ORC is not a party to the slot agreements, does not have access to the agreements and there are no penalties for not following through on plans from the previous year • No relationship at all between slot agreements and racing dates • Are some areas of the province where there have been a major decline in race dates • OHHA is concerned that it is possible and preferable for some of these tracks to have less racing rather than more • Can keep costs down when you don’t have to staff track, maintain track etc • Such a trend would be devastating to the standardbred industry • Currently there is nothing to prevent this from happening

  9. OHHA’s Concerns: Who is holding tracks accountable? • Who is in charge? • OLGC is signatory of the Slot Agreements and these agreements explicitly call for action on the part of OLGC including termination of slot agreements for non compliance • ORC is not the enforcer of slot agreements and its benchmarking process is meaningless • OHRIA is supposed to be participant in the benchmarking process and is so weak that it can’t possibly speak for the standardbred industry • OHHA is additionally concerned that there are now preliminary discussions to grow the slot facilities without ensuring that these initial agreements have ever been complied with • OHHA will want a direct role in negotiating and ensuring compliance with benchmarks for each track and would not be satisfied if OHRIA continued to have this responsibility

  10. OHHA’s Concerns: Who is holding tracks accountable? • OLGC has indicated in the past that “enforcement” measures in racing are the purview of the ORC • OLGC has been very hands off when it comes to issues of enforcing these agreements (Windsor Raceway a recent example) • OHHA is very concerned that this responsibility has shifted inappropriately to the ORC • ORC is only legislated to deal with racing - as it happens - at the tracks and they have, on a consistent basis, argued that they have no jurisdiction to deal with “the private business arrangements” of track owners • Their granting of race dates despite no action on promised improvements is evidence of this • It is critical that this role remain at the OLGC and that OLGC is proactive in this role Will OLGC take the lead on the benchmarking process per the slot agreements? Can OHHA directly participate in these discussions? Will these discussions happen prior to the growth of slot facilities at current locations?

  11. Next Steps • Confirmation from MPIR that OLGC has the mandate to review and enforce slot agreements including benchmarking and reporting requirements • Working discussions with OLGC on appropriate benchmarks for the slot agreements • Working group with track ownership led by OLGC? • Direct OHHA participation? • Meeting with OLGC to pursue wagering opportunities through ProLine to enhance exposure to horse racing betting and grow revenue to the industry

More Related