Horsepeople at small Ontario tracks refuse to sign long-term funding deal with the province

May 4, 2018

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Ontario Harness Horse Association representatives in Leamington and Peterborough say the 19-year deal, which promises up to $105 million a year in funding, has some serious flaws.

by Sandra Snyder

Mark Williams has retirement clearly in his sights, but the 60-year-old has decided he is not going to sail quietly into the hereafter. Two days after the initial deadline for signing a long-term funding agreement that would provide the Ontario horse racing community up to $105 million per year for up to 19 years, Williams has not signed the Lakeshore Horse Racing Association’s copy of the document and has no intentions of doing so.

Lakeshore Horse Racing Association operates Leamington Raceway at the Leamington Fairgrounds, the southernmost racetrack in Ontario. The half-mile oval hosts 13 afternoons of harness racing from the beginning of August through the end of October, offering total purses of about $35,000 on each 10-race card. The deal on Williams’ desk guarantees that $35,000 for the duration of the agreement and offers some additional funding for capital improvements and operations.

Williams, who is both president of the not-for-profit Lakeshore Horse Racing Association and the District 11 board member for the Ontario Harness Horse Association (OHHA), is not a fan of the deal for a number of reasons, but when it comes to his primary beef, he has his horseman’s helmet strapped firmly on.

“We want the same as everybody else gets in Ontario. I don’t know why they think it costs less to feed a horse and train a horse down here in Windsor than it does in, for example, Flamboro, or any of the other racetracks. So we want parity and that’s it,” said Williams. “We get $35,000 a card and they want us to sign on for 20 years at $35,000 a card, no chance to expand, no anything, no representation on the board, nothing, just like we’re the last third cousin.”

Ontario is divided into three levels of tracks — grassroots (such as Leamington), signature (such as Flamboro) and premier (Woodbine at Mohawk Park).

Flamboro Downs, will play host to 135 programs in 2018 offering total purses of about $65,000 on a 10-race card. Leamington Raceway and its closest neighbor, fellow grassroots track Dresden Raceway, will play host to 11 programs this season and offer total purses of about $35,000 across 10 races.

Approaching its sixth birthday, Lakeshore Horse Racing Association was born in the wake of the closure of the slot parlor at Windsor Raceway in April 2012. Windsor Raceway ceased all operations in August, 2012 and one year later Leamington Raceway was granted its first race dates. Windsor, had it survived, would have been considered a signature track and Leamington’s dates have not filled the void left in its wake.

“We’re already in the bottom of the barrel, so we can’t get down much lower unless we just cancel right out, and really that might be a mercy kill because we’ve had all we can take. We’ve struggled for five years,” said Williams, who has piloted the winners of over 5,000 races and $22 million in earnings during his career.

“Bad enough $35,000 a card isn’t even anywhere near the amount of money you need to maintain a horse, plus we’re going to get to do that for the next 19 years. I’ll be 80 years old before they get out of this contract, these younger people in the business, and what a hoot that is. What do you think $35,000 a card will be worth in 19 years, $3,500?”

Williams and the other members of the Lakeshore Horse Racing Association figure they are better off sticking with their current transfer agreements, which give Leamington Raceway $35,000 per card through the end of 2020, while trying to negotiate a better deal with whatever government emerges from the June 7 provincial election.

“I really, really doubt we’ll have any progress until either we get a new government or we have three years and I’m done these contracts,” said Williams. “I don’t really see any progress where we’ve come from. We’ve been going back and forth for two and a half weeks, three weeks now.

“My father is a founding father of OHHA,” added the Cottam, ON resident. “My father, he’d climb right out of the urn on the counter and choke my neck if I sign this stupid thing.”

Williams noted that the lawyer Lakeshore Horse Racing Association consulted also advised against signing the agreement, but declined to share the specific concerns the lawyer raised.

Brian Tropea, the general manager of the OHHA, also consulted a lawyer regarding the agreement and was advised not to sign due to a variety of issues, including the assignation of title to racetracks for all live racing presentations and the ability of Ontario Racing to use those videos at will.

“We had a copyright lawyer look at the video of racing, and the production of the racing for simulcast purposes 15 years ago to make sure that we were able to make a legal argument that if a racetrack tried to sell our product without compensating the horsepeople that we would have a legal right to have revenue that was generated from the sale of that product,” explained Tropea. “And the copyright lawyer said absolutely, you guys are performers and you have an ownership of that product, but they said in order for you to protect yourself and make sure that you can actually represent your members in a legal proceeding they need to sign off and expressly give you the ability to represent them as far as their intellectual property rights go, so we put language on our membership forms to allow us to do that.

“If we sign the contract now it turns over those intellectual property rights to Woodbine Entertainment Group or to Ontario Racing, and we can’t do that. We can’t just take somebody’s intellectual property rights that they have signed over to our association and then give them to somebody else.”

Like Williams, Tropea is concerned about the level of purses and the fact that there are no cost of living increases in the agreement. He also wonders why the agreement does not spell out how the industry would share in revenue from any new gaming products that are based on horse racing.

“The Premier said that she wanted gaming and racing integrated, and there is talk of lottery-style products that would involve the running of races, there is talk about historical racing, there’s been a lot of talk about a lot of different products that could help to replace the lost revenue,” said Tropea, referring to the money that flowed to purses during the Slots at Racetracks program between 1998 and 2012. “But there is nothing in the agreement that addresses, if we do get any of those things, how that revenue would be split with the horsepeople.”

Revenue splits between racetracks and horsepeople have been a hot button since the advent of pari-mutuel wagering, and Tropea said it is one of the central pieces of information missing in the long-term funding agreement.

“The way I read it — and I could be misreading it, but I think I understand it as well as anybody that has taken a shot at reading it — is that racetrack owners have to operate racing at a break even model, where all of the commissions from wagering would go to Ontario Racing Management and then they will take the amount of wager that happened on your product, figure out what percentage that was of the total bet in the province, and give you back that amount of the net commissions from wagering in Ontario,” Tropea said. “And nobody knows what the net commissions have been for the last number of years. So you’re basically asking somebody to put a lot faith into, and a lot of trust into something.

“It wouldn’t seem to me that it would be that difficult to say, based on 2017’s results and your wager, here’s what the new financial model would look like for your racetrack, and as far as I know I don’t think anybody has seen that.”

On April 28, the OHHA held an information meeting for horsepeople in District 3, where Kawartha Downs is located. Kawartha is the only other racetrack that has publicly stated it will not sign the agreement in its current form. According Mike Davies of The Peterborough Examiner (full story here) the OHHA encouraged District 3 members to support Kawartha Downs’ management in their negotiating efforts with the government.

With Kawartha Downs and Leamington Raceway withholding their signatures on the agreement it would
appear that the long-term funding for Ontario’s horse racing industry — standardbred, thoroughbred and quarter horse — will be put on hold once the Writs of Election are issued on May 9. Harness Racing Update contacted Cal Bricker, senior vice-president for horse racing at the Ontario Lottery and Gaming corporation (OLG) for clarification about whether the agreement could move forward without signatures from all 15 racetracks, but Bricker was unable to respond before the publication deadline. HRU will continue to track events as they unfold in the next week and provide an update, including Bricker’s responses, next Friday.

Those interested can read the documents pertaining to the funding agreements.

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