Letter to the Editor: Drummond, Dealtown, and Horse Racing

Don Drummond is a Genius!

Sometimes you just can’t see the forest for the trees! Mr Drummond is a genius, not because he has given us the solutions to the province’s deficit problem but because he identified the areas that need to be addressed. It’s up to us to cultivate the ground-work he has done and plant the solution seeds! Don Drummond has pointed us to at least one way to clip over a billion from the deficit through OLG.

One of the problem areas Mr Drummond identified for us involves the revenue sharing agreements with the horse racing industry. Millions and millions (actually the number exceeds $1.5 billion) of dollars have been paid to the race track operators and the Ontario race horse breeders over the past 10 or so years under the OLG Slots at Racetrack agreements. The 2010 payments totaled $334 million alone. Half of that goes to the track owners and operators and half goes to the horse people.

The horse people use those funds to improve the breeding stock in the province and support race purses to attract quality breeders to the tracks. This side of the current formula supports 55,000 jobs (according to the HLT Report on Horse Racing) in Ontario and generates tons of tax revenues and spending for and in the province. It would be like shooting yourself in the foot to tamper with this part of the arrangement so leave it alone. The industry derives its income from three sources: wagering on horse races, the sale of Ontario-bred racehorses and slot revenue. The Ontario Horse Racing Industry Association (OHRIA) manages the use of the slot revenues.

The second part of the formula involves payments to the track owners and operators. These payments to the 17 Slot at Track partners totaled $169 million in 2010 and many millions in previous years. The agreements anticipated that improvements would be made to racetrack infrastructures, they did not specifically require improvements to be made and benchmarks and controls were not put in place by OLG to ensure that this would happen. Most track operators did initially make improvement to their racing facilities to accommodate the slots, some more than others. With some exceptions, much of these millions of dollars paid to the track operators simply evaporated and most certainly have not been used to improve the facilities.

Maybe Don Drummond saw this loop-hole in the Slots at Track program or maybe not but this is where a change and a new solution should be found; a solution that will NOT affect the revenue to the horse owners.

Here is my solution to the later problem! Transfer the ownership of the racetracks to OLG so that 50% of this subsidy or whatever you want to call it goes back to the government to help pay down the province’s staggering deficit. There is more! Close some of the 17 racetracks and build Super-tracks with full service casinos at geographically disbursed locations, like Woodbine, Mohawk, Ajax Down, Fort Erie, Rideau and Sudbury. Oh, did I forget some of the tracks? Yes, because we need to eliminate some to consolidate.

Now for the bite that will hurt the most but will help both the horse people and the industry. Close the Windsor, Sarnia, Dresden, Clinton and Western Fair tracks and add a Super-track to the Dealtown Casino Initiative where the government already owns a 250 acre parcel of prime real estate and where they already have a 650,000 sq ft resort facility that can be transformed into the Dealtown Casino Racetrack and Retirement Village AT NO COST TO ONTARIO TAXPAYERS! The casino and racetrack will be paid for by one of the major gaming and hospitality developers, like Penn National or Delaware North who have impressive track records in both racetracks and casinos, or partners like Paragon Gaming of Las Vegas or Donald Trump who both have solid track records in Canada.

Thank you Mr Drummond for identifying the problem! Now it’s time to implement the solutions!

By Brian Keenan, Chairman of the Dealtown Casino Initiative