Ontario's horse-racing industry needs to become a player on the global stage and offer new gambling products to help secure its future viability, a report says.
The industry could generate $100-million a year in new revenues if it had a monopoly for betting on single sporting events – something that could become legal if pending federal legislation is enacted – and a lottery specifically for horse racing, says the report released on Tuesday.
The additional revenues would help offset funding the industry no longer receives from the province. The government announced in its budget last March that it would no longer use revenue from racetrack slot machines to prop up the industry.
The three-member panel – consisting of former cabinet ministers Elmer Buchanan, John Snobelen and John Wilkinson – was set up to advise the government on how to help the industry adjust to the end of the provincial funding program.
The panel concludes the industry is worth saving but says the onus is on government to take a proactive interest in it. The panel said the onus is also on the industry to provide better service to their core customers, those who place wagers on horse races.
"Ontario's horse racing industry is at a crossroads," the report says. "A sustainable future is possible, but only if the government takes action now."
For their part, the report says, track operators in Ontario often fail to meet their customers' expectations. Consumers are attracted to competitive races with full fields, more horses in each race and large wagering pools, something that is often lacking, the report says.
Horse racing now operates in a global market. Racetracks in Ontario pull in about $20-million in net revenues a year from bets placed by individuals outside the province. At the same time, many Ontarians follow and place bets on horse racing in international markets. Nabbing a larger share of the competitive world market is crucial to the industry's long-term sustainability, the report says.
Industry officials have complained they cannot survive without provincial funding. But the panel said it would be a mistake for the government to reinstate a program that had the province pay 20 per cent of slot revenues to racetrack operators in exchange for the Ontario Lottery and Gaming Corporation placing the machines at the tracks. Since the program began 15 years ago, racetracks have received $3.7-billion in slots revenue. Last year alone, the industry received $345-million.
On average, more than 60 per cent of purse money awarded in Ontario horse races comes from slots money. At some tracks, the slots make up more than 90 per cent of purses.
"The program has provided far more money than was needed to stabilize the industry – its original purpose – and has done so without compelling the industry to invest in a better consumer experience," the report says.
But the report warns that the $50-million in transition funding the government has promised, spread over three years, is not enough. Just how much funding the panel is recommending is not known. It asked the government not to disclose the amount, saying this is something that should be negotiated between the province and the industry.
Ted McMeekin, Minister of Agriculture, Food and Rural Affairs, said in a statement he is prepared to negotiate. His overture was welcomed by Sue Leslie, president of the Ontario Horse Racing Industry Association.
"As our industry continues to crumble around us, OHRIA can't sufficiently state the urgency for these negotiations to commence immediately," she said.
New Democratic Party MPP Taras Natyshak accused the government of leaving the industry "out in the cold" by pulling the funding.
"With a swipe of a pen and without any consultation, the government cancelled a revenue generating program without providing an alternative to the industry," he said in a statement.