TORONTO, June 22, 2012 /CNW/ - Dennis Mills, President of Racing Future
(racingfuture.com) today sent the following open letter to Ontario Premier Dalton
McGuinty regarding the imminent destruction of the Ontario Horse Racing
and Breeding industry, with the potential loss of 55,000 jobs.
Dear Premier McGuinty,
Your government has announced that it will pull its slot machines from
Ontario race tracks, abruptly canceling a 14-year partnership that has
been helping our province's horse breeding and racing industry to make
the transition from the 20th Century to the 21st.
I am writing to share with you respectfully that I have learned in these
past weeks that the more Ontarians hear about this, the more people are
concerned. We fear that what undoubtedly was meant to be a
well-intentioned move to maximize revenue opportunities for your
government has the potential instead to rapidly become a very
unnecessary human, economic and social catastrophe.
Going ahead with this abrupt change - implemented without enough
analysis of the impact that it will have and without any alternative
measures having been put in place to offset the damage - risks ruining
the lives of tens of thousands of ordinary, hard-working people; wiping
out an industry that directly contributed more than $2.3 billion to
Ontario's annual income in 2010 and also three times as much when you
add in the indirect and induced multipliers; and squandering rather
than enhancing revenue potential for your government.
The Ontario Lottery and Gaming Corporation has already removed the slots
from race tracks in Fort Erie, Sarnia and Windsor, throwing 560
employees into the unemployment lines, and threatening the jobs of many
more. Toronto's Woodbine race track is next, where another 700 will
lose their jobs.
What is at stake here is not the removal of a "subsidy", as some people
have wrongly described it, but the wrecking of what has been a complex
and successful partnership. This partnership provided Ontario race
tracks 20 percent of the revenue from the slot machines that they
hosted, as an appropriate venue with prospective bettors already
present and with capable security. Their portion of this 20 percent
share has allowed the race tracks to increase purses, update their
interactive technologies, and make capital improvements to the tracks.
A near-equal portion of the 20 percent goes to the rural breeders and
trainers who, like most of the agricultural industry have to compete in
the face of generous offshore subsidies
And while some people associated with your government have inaccurately
characterized horse racing as the "Sport of Kings", that's only what it
used to be, not what it is in today's Ontario. These days, horse racing
and breeding is much more an industry of ordinary folks. It employs
55,000 people, 31,000 full time, and very few are rich. Many live
outside Toronto in rural areas, running small farms, breeding and
boarding horses, or in nearby towns, providing veterinary, training,
feed and transport services. In Toronto itself, people work at the
racetrack, grooming and walking horses, keeping the horses healthy and
fed, sweeping the floors and cleaning the horse stalls. Others are
running the paramutuals and maintaining the slots. It's pretty basic
work, honest labour, not lavishly paid. And they pay taxes, all 55,000
Directly, indirectly and through all its multiplier effects, the horse
racing industry contributes more than $6.5 billion a year to Ontario's
economy, of which $1.5 billion is paid in wages. The loss of
substantial portions - or all - of that contribution would be
catastrophic, particularly in Ontario's troubled agricultural sector.
Of the 55,000 people now employed by the industry, only 4,000 jobs -
the OLG slot workers - might be picked up elsewhere eventually. There's
no certainty here, and less that the jobs will reappear in locations
suitable for the workers whose lives have been disrupted.
Horse breeding and racing, in other words, is a far bigger industry than
the officials who developed this recent policy change appear to
understand. It spends more than $1 billion annually producing,
training, and maintaining horses alone, nearly all of it in Ontario.
Almost 40 percent of that is spent on training, which is the largest
single cost, with much of the overall expenditure made in rural
communities. Horse breeding alone pays out over $60 million annually in
wages, again mostly in rural Ontario.
It is not an exaggeration to say that the swift and arbitrary removal of
slot machine revenues from Ontario's 17 race tracks will severely
damage the horse-breeding and racing industry across the province. It
could destroy it completely. That would put a large number of good
people, with specialized skills that can't be transferred, into the
unemployment lineups. It will also shred the interlocked fabric of
Ontario's already-fragile agricultural sector, making other parts of it
non-viable. If this industry disappears, it will make the lives of far
more than the 55,000 directly affected harder, and the losses in tax
revenue to government, given the multipliers involved, wider and deeper
than can be drawn on a simple balance sheet. It will be far greater
than $78,2 million.
Here is what we already know for sure: Based on 2010 figures, the
removal of slot machine operations will result in a direct loss of $60
million in annual tax revenues to the local governments that host the
race tracks. $165 million will be taken from the already-vulnerable
annual incomes of rural horse breeders and trainers. The race tracks,
which have invested heavily to upgrade their facilities over the 14
years that the revenue sharing program has been in place, will lose
$169 million annually, along with virtually all of the capital
investment they have put into hosting the OLG slots. Purses will
dwindle again, the horses, along with their trainers and riders will go
elsewhere, and so will the people who bet.
Even from a government tax revenue perspective, it doesn't make sense.
Government tax revenues from paramutual betting on the horses at the
tracks netted $782 million in 2010. If the tracks are forced to close,
that's a net loss to government of $437 million dollars - even if it is
able to capture all of the $345 slot revenue it gains by canceling the
partnership with the race tracks.
It isn't only a matter of cut-and-dried economics either. Horse breeding
and racing resonates through Ontario life in unique and complicated
ways that are very much cultural as well as economic: Horses are a way
of life for those 55,000 people. It's more than just a livelihood.
There are 30,000 race horses directly involved, and when you add in the
dressage and show-jumping horses that originate in the breeding and
racing industry, there are a great many more. Horses are among the
world's most beautiful and loved animals - and destroying the horse
breeding and racing industry would deprive Ontarians of much of their
For all these reasons, Premier, I am writing to urge you to urgently
consider that there are alternatives that can enable you to achieve
your government's fiscal objectives - much more effectively, in fact -
while also being consistent with your often stated commitment to
maintaining and improving the quality of life for all Ontarians and
particularly the most vulnerable.
We don't claim to have all the answers, and there is literally no limit
to the imaginative initiatives that can be undertaken. But I would like
to share with you here a few initial suggestions:
Direct an immediate halt to all further slot machine withdrawals from
racetracks at least pending a detailed review of impacts and
alternatives, and direct the implementation of measures to cushion the
impact and safeguard the survival of the industry;
Direct the Ministries of Finance, Industry etc. and OLG to produce
detailed cost/benefit analysis of the current partnership-ending
initiative, including costs of job loss, general economic impact on our
province, the net revenue effect for the Ontario government, and the
impacts and alternatives for 55,000 current industry workers, and make
Direct OLG to provide horse racing betting at all its 11,800
distribution outlets to provide a new revenue stream for both
government and industry;
Initiate steps to issue a request for proposals for 500 restaurants to
host viewing and betting on horse racing in proper social environments
like the Turf Club on Bay St.;
Direct the Ministry of Tourism, Culture and Sport to develop and
recommend a plan for maximizing the sport and tourism benefits of all
horse-related facilities and assets in Ontario, using the State of
Kentucky as an initial model;
Direct the Ministry of Health and Long-Term Care to explore ways to
maximize health, social and economic benefits that can be derived from
therapeutic human interaction with horses - for example, with regard to
autism, cerebral palsy, dementia;
Require that at least 30 percent of all races and 45 percent of all
purses be directed toward races of only Ontario-bred horses.
Mandate race tracks to spend at least 10 percent of their revenues from
slot machines on local promotions and advertising, including educating
Ontario customers about having the lowest track takeouts in North
Premier, these are only a few initial urgent suggestions. What is
important is to approach the current crisis that your government's
initiative has created in the industry as a moment to seize the
opportunity to simultaneously strengthen an important and productive
industry; safeguard and enhance the futures of 55,000 hard-working
Ontarians; and enhance both your governmen's revenues and the economic
and social interests of our province.
We look forward to your response.
SOURCE Toronto Partners Inc.
For further information:
please contact Dennis Mills at 416-587-1716.