Ontario’s racetrack math
I bought my first racehorse 30 years ago along with a few friends. We had a few successes and we paid a lot of bills. We proved that a handful of people of modest means can get together and act like one big owner and have a bit of excitement. Most of the glamour and bragging rights came from a win photo that you hung on your recreation room wall, not an invitation to a society ball. For the record, none of us has ever been introduced to the Royal Family.
The reality is that it’s hard for most owners to gain fame or make money in horse racing but it now looks like it could get a lot more difficult.
In the mid-1990s, horse racing was struggling following a difficult and prolonged recession. Casino gambling did not have a permanent home and the number of racetracks in Ontario had dwindled from more than 50 in the late 1940s to the 17 we have today. With the new availability of unregulated offshore gambling through the Internet and simulcasting of races in Ontario from across the world through satellite feeds, the local racetrack in Ontario, down to a third of its former glory, looked to be a shaky proposition.
At the same time, casino gambling also looked like it was on its last legs. For years, itinerant weekend gambling that located and pulled up stakes every weekend was losing its financial viability. It became clear that the only way it could survive was to set up and stay put. On paper, permanent casinos located close to large populations were a nobrainer.
The only problem is that Ontarians didn’t want casinos in their back yards and routinely voted them down. There is every reason to believe, faced with the prospect of gaming emporiums as nextdoor neighbours both to themselves and their children, they would vote for exclusion again.
That’s why both sides seized the opportunity to place slot machines at racetracks, the only local properties in the province that were already zoned for gambling. Conveniently, they were mostly some distance away from local neighbourhoods, schools and community and youth centres. It was an arrangement that worked and that continues to work.
The racetracks provided access to their existing sites, saving everyone the massive expense of building new facilities.
For more than 10 years, the Slots at Racetracks Program has been a highly successful partnership that has allowed the horse-racing industry to sustain itself and continue providing many economic benefits to rural and municipal economies, while earning the provincial government more than $1.3 billion in revenue every year.
This highly successful and lucrative arrangement is no more a subsidy to racetracks than the funds that go to any other agency, board or commission in Ontario to raise revenue to reduce the taxes Ontarians would otherwise have to pay.
Is the money paid by the government to generate new business, electrical power or liquor sales a subsidy? If so, then let’s call every investment a subsidy and banish the concept of investment from the government dictionary.
But this is no time for levity. The horseracing industry spends more than $2 billion per year in Ontario, with more than 80 per cent of that money being spent in rural Ontario, while 60,000 jobs are attributed to the racing and breeding industry.
By preserving the existing program, the government would continue to collect $1.3 billion annually from the horseracing industry while ensuring the industry remains economically sound for those rural communities and the families that rely on it for employment.
Yet the industry and the families it supports are not the only part of the equation. The government cannot pull the plug on the revenue-sharing agreement without placing thousands of horses in jeopardy because their lower future purse earnings would make their financial upkeep a problem.
The true innocents in this whole affair are the horses themselves. If the breeders, owners and trainers are no longer able to pay the bills at some point down the road, there will be insufficient numbers of farmers and other interests to absorb the thousands of horses who would lack racing venues and whose purse earnings would no longer be viable.
We don’t like to think about what happens to horses that farms can no longer support but allow me to leave that to your imagination.
The reality is that there is no right or wrong number of racetracks for Ontario. A number of armchair statisticians have weighed in with their assessment that 17 racetracks in Ontario (one for each 800,000 in population) are way too many. Let’s teach some of their racing expertise to New Zealand, where there are 61 tracks (one for each 72,000) and Australia, where there are 451 (one for each 50,000). These countries are sure to appreciate our new-found expertise in racetrack math.
The true innocents in this whole affair are the horses themselves. You can imagine what will happen to horses that farms can no longer support