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Burgess Letter To Liberal Candidates

Published: January 9, 2013 10:19 am ET

Last Comment: January 9, 2013 11:42 pm ET | 17 Comment(s) | Jump to Comments

"I recently visited Delta Bingo to inspect the imitation slot machines now in operation there. The Delta Bingo staff, when asked about the availability of slot machines proudly directed me right to these imitation machines."

In a letter directed to the Liberal Leadership candidates, prominent horse owner Robert Burgess makes his case for why the new leader of Liberal party should extend the slots-at-racetracks agreement past the March 31, 2013 date and commission a "new and impartial study." Burgess' letter appears in its entirety below as well as in PDF format.


Update on the Slots At Racetracks Program to be delivered to each of the seven candidates for the Liberal leadership

Please be advised that we are finally entering the homestretch in our epic eight month battle with a self dealing OLG determined at all costs to completely destroy Ontario racing as we have known it.

Important changes in our relationship with Government may be occurring. At this time one can seriously take the position that a recovery for Ontario racing is still possible. This recovery is still possible despite the well- intentioned but totally unsuccessful efforts of the three man Government Panel appointed to fix something that was never broken in the first place.

However, many signs now point to the survival and continuation of the widely respected Ontario Slots At Racetracks Program---an equitable and very fair revenue-sharing program that has served both Ontario taxpayers and the Ontario racing industry so well and faithfully since 1998.

To most knowledgeable observers it is inconceivable that an honourable and fair new Liberal Leader, once elected by the Party, would walk away from revenues exceeding one billion dollars in 2013 alone that Godfrey and the OLG cannot replicate and cannot replace.

The new Leader can immediately extend the Slots At Racetracks revenue-sharing agreement and commission a new and impartial study. This extension by the new Leader will also, at the same time, save Ontario's horse breeding farms from an absolute and totally undeserved ruination.

Less urgent than the immediate actions of the new Liberal Leader but nevertheless important are several other positive signs of a possible recovery for Ontario's beleaguered horsemen and breeders. I have set out below several important statements supporting the Ontario horse industry, as follows:

1. On December 11, 2012 Sue Leslie of OHRIA announced "that OHRIA supports the Ontario Progressive Conservative party's push to incorporate the provincial horse racing and breeding sector in any future gaming plans." Her official statement goes on to say " It is encouraging to see the PC's taking positive steps towards creating an inclusive and integrated gaming industry in Ontario, one that includes Racing. The horse racing and breeding industry is part of the very fabric of gaming in the Province, and the Government needs to understand its economic and cultural value. OHRIA is asking the Provincial Government to defer the OLG's current modernization strategy until consultations that involve all sectors of Ontario's gaming: industry, including horse racing, can be integrated into OLG's modernization plans and extend the Slots At Racetracks Program from March 31,2013 to allow the 2013 racing season to get underway while negotiations continue."

2. We understand that Ms. Leslie on behalf of OHRIA has received a substantially similar commitment from Andrea Horwath, the leader of the Ontario NDP party to incorporate the provincial horse racing and breeding sector into any future gaming plans.

With respect to the frantic rush into 29 new casinos Ms. Horwath was very candid on Ottawa Citizen Live stating "Stop the current OLG program, allow municipalities to have referenda if they want and tie to next city election. 2014? "What's the hurry?"

Then in the Brantford Expositor on November 11, 2012 when questioned on the privatization of casinos Ms. Horwath stated "I've not been impressed with the way the OLG has rolled out the modernization. I'm astounded the Government washed its hands and allowed the OLG to put the squeeze on municipalities. Municipalities with casinos are being dictated to with no opportunity to negotiate. It bothers me that the OLG has a stated goal of modernization to get new, younger customers. For me, that's a difficult thing. I have a son who is 20. They're after my son. We don't need young people to become the prey of (casino) modernization. It would bring money to the province but at what cost?"

3. Tim Hudak, the leader of the PC party has argued correctly that the OLG vision of 29 new casinos is NOT A PANACEA to cure overspending and waste by the current Government or by any future Government.

Save for the possible exception for downtown Toronto in several years time, new casino locations (other than those to be approved now at current racetracks) are clearly NOT available anywhere in Ontario at any significant location at this time. New casino locations are even more unlikely to be available in the future when, in addition, approval by REFERENDUM will presumably be required. This failure by the OLG to even find sites exemplifies the complete and abject failure of the OLG's gaming modernization plan and exposes the Government's heavy financial spending on it.

Mr. Hudak also wants the OLG out of the business of operating slot parlours at racetracks and wants the racetrack owners to own and operate these facilities on an individual basis and not on a group basis. As a corollary of this policy it goes without saying that to be profitable and competitive with Pennsylvania, New York and Ohio for the standardbreds (and with Florida, New York and California for the thoroughbreds) these facilities will be required to retain the 10% purse levy for horsemen and be so mandated by Government in order to keep purse levels competitive and to maintain horse supply.

4. Messrs. McGuinty and Duncan have resigned. Mr. Godfrey and Mr. Phillips are widely reported to be on thin ice as most rural Liberal backbenchers (through no fault of their own) face very tough uphill battles to retain their seats at Queen's Park. This situation was created because of the precipitate and grossly unfair treatment meted out by Mr. Godfrey to local horsemen and to their
local rural electors and friends. In December most of the security staff at Mohawk Racetrack in Campbellville were terminated due to the closure of the backstretch. This is insignificant when compared with the firings scheduled to take place on March 31, 2013 if Mr. Godfrey and Mr. Phillips are allowed to continue to indulge their unreasonable fantasies.

Race horses and breeding stock likewise are no longer wanted under "gaming modernization" as 150 to 200 hapless animals are slaughtered every week at Kitchener supposedly to satisfy the tough conditions imposed on the OLG by American casino owners and investors (i.e. that they would not investigate Ontario and/or make major casino investments here if horse racing were allowed to compete with them for the wagering dollar).

5. The 2011 Annual Report of the OLG is an absolute disgrace and an example of civil service profligacy, reportedly with over 300 employees each earning over $100,000. yearly. As of the date of this Annual Report Mr. Godfrey still continues as Chairman with other developers such as Mr. Anthony Melman, a retired Vice - President of Onex Corp. (ONEX is rumoured to be one of the bidders for a Markham casino) and Mr. Dale Lastman, (counsel for both Mr. Godfrey and Mr. Larry Tanenbaum of Delta Bingo fame in downtown Peterborough) as directors. Despite the fact that the Slots At Racetracks program contributes a return of over a billion dollars yearly to the Ontario Government there is not a single representative or friend of racing on the OLG board.

Incidentally, I recently visited Delta Bingo to inspect the imitation slot machines now in operation there. The Delta Bingo staff, when asked about the availability of slot machines proudly directed me right to these imitation machines. This is an example of the circumvention of the spirit of the law by Delta Bingo and its owners.

With Mr. Godfrey's OLG gaming modernization plan in shambles and with this serious conflict of interest involving the slots at bingo initiative (bringing a lot of unwanted media attention to Mr. Tanenbaum and to the OLG) Mr. Godfrey should resign his OLG chairmanship. Incidentally, Mr. Tanenbaum earns a 47% return on his various bingo investments in Ontario, as mandated by the OLG.

For copious details of this conflict of interest I would direct you to a carefully researched article written by Mr. Darryl Kaplan, the editor of Trot Magazine titled "Exclusive: The Ugly Truth Behind The OLG Bingo Expansion" appearing on the Standardbred Canada website on January 3, 2013.

I have reproduced this article in its entirety as an appendix to my brief. This demonstrates that all of the Government money currently being spent/wasted by the OLG on its extremely expensive and pervasive advertising campaign in Metro Toronto to justify its gaming modernization boondoggle will not succeed.

6. Mr. Hudak and Ms. Horwath, by their public pronouncements, have consistently and with some passion supported racing and its preservation in Ontario as we know it. Similarly, almost all of the Liberal leadership candidates are calling for a review of Mr. Godfrey's policies and a meaningful extension of the Slots At Racetracks program. That means that after any subsequent provincial election where the Liberals do not win an absolute majority the racing industry will have the necessary votes at Queen's Park to be able to stop the train and get a meaningful extension of the March 31, 2013 date and a proper review of the Slots At Racetracks revenue sharing agreement.

7. There is now ample precedent for very successful revenue sharing agreements between racing and slots in neighbouring competing jurisdictions. For example, in New York State nine racinos (slots with racing) are presently operating successfully between Buffalo on the west and New York City to the east. In the first six months of 2012 the nine racinos earned and contributed almost six hundred million dollars to the State of New York and local governments.

Incidentally it is rumoured that Delaware North, which operates the racino at Buffalo Raceway, is a possible bidder in Ontario. It is indeed difficult to comprehend why the OLG is fighting the racino model here in Ontario with such unexplainable vigour.

Accordingly the OLG should be ordered by Government to include in its current Request For Proposals details requiring applicants wishing to operate or purchase any of Ontario's slot operations (only those where racing facilities now exist) to demonstrate how they will operate and continue to fund the racing operation under their management during the term of the contract they are proposing to win. This is absolutely necessary for racings' survival.

8. Since 1998 the racino model in Ontario has been extremely successful with over a billion dollars to Government being earned in 2012 by the Ontario Government from its revenue-sharing agreement with up to seventeen racetracks.
In contrast, the OLG's five stand-alone slots and casinos that the OLG itself operates have returned virtually nothing to Government year after year and represent a burden to taxpayers.

An explanation for this anomaly may be that there is a stigma about going to play the slots, even though many racetrack attendees may go over to the slot side of a joint facility and play the slots too. Certainly, most players obviously prefer to say that they are "going to the races". Actually going to a race or to a sports event must be more socially acceptable than going to the slots.

Perhaps the OLG should consider building racetracks at their slots-only facilities so that they can become revenue producers for the Ontario taxpayer like the little village of Elora with Grand River Raceway that contributed over $44,000,000 to the Ontario Government in 2012!

9. All strong business models everywhere thrive on constant growth and expansion. This is Business 101. As soon as things start to go the other way the business model always fails. Ontario's racing industry was the envy of the World until the OLG interfered with it.

If, as recommended by the three man Government Panel both our annual racing days and the number of tracks permitted to race were artificially reduced by fifty per cent (50%) in 2013 it would lead to a slow and absolutely certain death for Ontario racing. This recommendation, although well-intentioned, is a total economic miscalculation.

Ontario's racing's future has already been imperilled by the OLG's gaming modernization plan which completely decimated the 2012 Ontario breeding season and now threatens the 2013 breeding season which starts on February 15, 2013. With our horse supply ruined and our breeders in serious financial danger racing cannot survive.

CONCLUSION

In my opinion, for what it is worth, the only way to SUBDUE THE OLG MONSTER is for all horsemen, all breeders, all racetracks, all affected municipalities, all owners and all trades people to STAND TOGETHER AND FIGHT TOGETHER TO THE BITTER END as we approach January 26 and March 31, 2013. There is no step or action (however unpleasant) available to the racing industry in this desperate fight which, if necessary, we should not take.

As I said at the beginning of this brief, it is inconceivable that an Honourable and fair new Liberal Government Leader would walk away from revenues exceeding one billion dollars in 2013 alone that Godfrey cannot replicate or replace. The new leader can just as easily extend the Slots At Racetracks revenue - sharing agreement and commission a new and impartial study.

To do otherwise would be fiscally irresponsible.

Robert B. Burgess Q.C.

January 9, 2013 - 11:42 pmMr. Burgess, thank you. I

Dick gidlow SAID...

Mr. Burgess, thank you. I live in Ohio and I Race and Breed in Ontario. Ohio has now adapted the Ont. SAR program and in its first year it is thriving.There is one Racino operating in Ohio presently and it is producing revenue of approx, $10 Mil/mo. There are 2 more planned for next year, 1 of which is at the track at Lebanon, Ohio. That particular track is old and very tired and reminds me a lot of the old track in Hull,PQ. The Lebanon facility is in the process of being sold to a partnership of Churchill Downs and Delaware North from Buffalo. They will put in several "Jillion" dollars to build a new Track with a, or because of, a Racino License that goes with the deal. They also plan to further invest in a destination Entertainment complex to max out the value. That is the same Delaware North Company that you mentioned in your letter.
The Ohio Racing Community which was left for dead,is now ramping up fast with the return of Breeders and the opening of new Farms and Facilities...thanks to the adaptation of the Ontario style SAR program by Gov.Kasich. We too had been victims of a Vegas style take over of Ohio Gambling by a previous Administration. The Casino Folks really were not very happy when Gov. Kasich authorized Racino's
The OLG is simply a bureaucratic organism that is totally outdated and arrogant. I wish that I did have, but I don't have a vote.....
but all of you do! The OLG needs to be independently investigated by the next Gov't and new business orientated management put in place. 13 $100k jobs...the savings there could heat some classrooms next year! 47% take on Bingo...You know who is yelling out BINGO on that deal! Stop it now!
Thanks again Bob

January 9, 2013 - 11:39 pmMr. Burgess, thank you. I

Dick gidlow SAID...

Mr. Burgess, thank you. I live in Ohio and I Race and Breed in Ontario. Ohio has now adapted the Ont. SAR program and in its first year it is thriving.There is one Racino operating in Ohio presently and it is producing revenue of approx, $10 Mil/mo. There are 2 more planned for next year, 1 of which is at the track at Lebanon, Ohio. That particular track is old and very tired and reminds me a lot of the old track in Hull,PQ. The Lebanon facility is in the process of being sold to a partnership of Churchill Downs and Delaware North from Buffalo. They will put in several "Jillion" dollars to build a new Track with a, or because of, a Racino License that goes with the deal. They also plan to further invest in a destination Entertainment complex to max out the value. That is the same Delaware North Company that you mentioned in your letter.
The Ohio Racing Community which was left for dead,is now ramping up fast with the return of Breeders and the opening of new Farms and Facilities...thanks to the adaptation of the Ontario style SAR program by Gov.Kasich. We too had been victims of a Vegas style take over of Ohio Gambling by a previous Administration. The Casino Folks really were not very happy when Gov. Kasich authorized Racino's
The OLG is simply a bureaucratic organism that is totally outdated and arrogant. I wish that I did have, but I don't have a vote.....
but all of you do! The OLG needs to be independently investigated by the next Gov't and new business orientated management put in place. 13 $100k jobs...the savings there could heat some classrooms next year! 47% take on Bingo...You know who is yelling out BINGO on that deal! Stop it now!
Thanks again Bob

January 9, 2013 - 6:34 pmanother well writing letter

another well writing letter by MR BURGESS but wont do much if its only published here!

January 9, 2013 - 6:29 pmThis set up will divert

carlo renon SAID...

This set up will divert billions of dollars that belong to the people of Ontario into mr. Godfrey's friends and cronies pockets though. I believe a criminal investigation should be taking place!

January 9, 2013 - 6:09 pmThank you again Mr. Burgess

Lynne Magee SAID...

Thank you again Mr. Burgess for so eloquently putting into words what many of us have known and thought for so long. Your expertise as a lawyer, longtime and dedicated horseperson and truly caring and passionate human being comes through in each letter that you write. We can only hope that each Liberal candidate and any other candidate that is running to be a part of the next government will take all of your points seriously and into consideration and do what is right for our industry and the province of Ontario should they be voted into power. It would be a bonus to see Mr. Godfrey and his cohorts at the OLG stopped in their tracks as they muscle their way through this so-called "modernization plan" by deceiving the people of Ontario with fabricated stories of wealth and pleasure when the true benefactors will be those friends and business associates that they have been in cahoots with for years. I wonder when we will see Mr. McGuinty's and Mr. Duncan's names appear on their list of Executive Board Members. The corruption and collusion that has taken place amongst the many involved parties (the Liberals, the OLG, the casino owners, Larry Tannenbaum, and probably many more is disgusting to say the least. The fact that the Ombudsman still has not released an announcement of an ivestigation is also very disturbing. He was made aware of this corrupt plan to desimate horse racing while expanding bingo halls and casinos months ago and has yet to act on behalf of the people of Ontario.
You mention that Mr. Godfrey and Mr. Phillips at the OLG are reported to be on thin ice---as they should be. The fight is not over. Your letters never fail to encourage and all horsepeole and anyone connected to the horse racing industry should be inspired by you words-----

"In my opinion, for what it is worth, the only way to SUBDUE THE OLG MONSTER is for all horsemen, all breeders, all racetracks, all affected municipalities, all owners and all trades people to STAND TOGETHER AND FIGHT TOGETHER TO THE BITTER END as we approach January 26 and March 31, 2013. There is no step or action (however unpleasant) available to the racing industry in this desperate fight which, if necessary, we should not take."

Hopefully, more than just the politicians are listening. Are we ALL ready to really fight with Mr. Burgess to the bitter or glorious end?

January 9, 2013 - 4:23 pmCongratulations on another

Dave Nicol SAID...

Congratulations on another truthful, factual and necessary report on this tragedy continually being presented by unelected, untruthful individuals using semantics to spread their fiction! If we were allowed to elect a racing czar to deal with this miscarriage of justice I would proudly start with Mr. Burgess. Imagine that? The truth and nothing but the truth! Wait a minute did we ever lose this right to be treated otherwise? Only in the newly ungoverned Province of Ontario that allows taxpayer money to be used by these unelected spendthrifts to spread their poisonous untruths? I am a proud member of the horseracing industry in Ontario and demand to have my rights protected by those elected to SERVE! Don*t give up folks! With people like Mr. Burgess and Darryl Kaplan on our side we will be in safe hands.

January 9, 2013 - 4:11 pmA well reasoned and extremely

Phil Porter SAID...

A well reasoned and extremely accurate version of the events that have taken place. Many thanks to Mr. Burgess for his expertise and influence and for all he has done during the past several months. I truly hope the horse racing industry are the benefactors of his hard work and support. To say I am disgusted with the government and the OLG would be understating my true thoughts. The names mentioned by Mr. Burgess are the architects of this attack on our industry and on the people in our industry. I don't believe for one second that health and education will receive any additional funding resulting from ending the SARP program. This is clearly a smokescreen to satisfy the American Casino lobbyists and, of course, our 'starving' Bingo Hall owners and their 'supporters'.

January 9, 2013 - 3:52 pmGreat letter Mr. Burgess. I

Great letter Mr. Burgess. I have forwarded your letter to the address mention here and to every other liberal member and media place I could find. This needs to be read and heard loud and clear. Their corrupt deeds need to be out in the open and every "city" person needs to know what is really happening.

January 9, 2013 - 3:04 pmI agree with Murray Brown. My

I agree with Murray Brown. My vote goes to Bob Burgess for his relentless approach and efforts to save Ontario racing, the hard working families associated with it and the horses who don't deserve to be slaughtered because of the whim of some brain dead politicians who didn't take the time to think about the ramifications of their actions.

January 9, 2013 - 2:21 pmIts a shame that the Cam

murray brown SAID...

Its a shame that the Cam Fella award was not given out this year. My vote if I had one would have gone to the brave people like Bob Burgess and Anthony MacDonald who have continued to fight despite the obviously stacked deck presented by messrs Godfrey and Tabnenbaum and their lackeys McGuinty and Duncan.

January 9, 2013 - 1:49 pmThis article is the best

Peggy Powell SAID...

This article is the best thing that I have read in a long time.If the new Liberal leader were to follow Mr Burgess's recommendations they would gain thousands of votes. Not mine though. After all these months of waiting and agonizing over what may become of the Standarbred Industry and most of all what will happen to the thousands of horses who do not deserve to be in this life threatening postion in the first place, I have found myself becoming a little depressed and seemingly giving in to the inevitable. With all the negativity in our Industry it was easy to do. This article seems to give me new hope . Let us all stand together ,side by side , owners, breeders,trainers , drivers,grooms,horse lovers, and most of all racetracks If we do this maybe we can save our Industry. Thank You Mr. Burgess for giving me and many others a little hope.It is wonderfull to see that some one is still out there fighting for all of us.

January 9, 2013 - 1:38 pmBob What a tremendous

Charlie Reid SAID...

Bob What a tremendous letter.You have given every horseman in Ontario a little hope when this travesty to racing in Ontario is so close to becoming a reality.I wish I could put Mr. McGUINTY, Mr.DUNCAN and Mr. GODFREY in my truck and take them to the slaughter house in Quebec and show them the unbelievable number of race horses from Ontario that are being slaughtered each week because of their policies to take the slots away from the racetracks. They have no idea what they have done to so many families in Ontario. I would like to thank you from the bottom of my HEART for your support and your INSPIRATION to every horseman to keep fighting. Charlie Reid Meadowview Farms

January 9, 2013 - 12:54 pmThank you very much Bob! I

Carolyn Rae SAID...

Thank you very much Bob!
I have forwarded your letter along with my comments below, to the Ontario Ombudsman, [email protected] and Marketplace at the CBC in hopes that we may get some media attention. I am hoping all who read this will also forward it to the above 3 addresses in anticipation that "swamping" with this letter will bring further attention to our issue!

Please, everyone, forward Mr. Burgess' letter!
[email protected]
[email protected]
[email protected]

"Very well written letter by Mr. Robert Burgess, QC, regarding this "boondoggle" created by Paul Godfrey and the OLG to the good of his "buddy" and Business Partner, Mr. Larry Tanenbaum.
Hopefully someone in the Media will pick up this very accurate accounting of this "conflict of interest" between Mr. Godfrey and Mr. Tanenbaum, at the expense of the Ontario Taxpayers!
Even if the taxpayer has no interest in Horse Racing, they should be interested in why this Liberal Government is allowing Paul Godfrey and the OLG, under the guise of a "gaming modernization plan" to completely decimate the 2nd largest sector of the Agriculture Industry in this province, to line the pockets of "some", at the expense of the Ontario Taxpayer.
Read this and absorb exactly what has and still is being allowed to happen by Duncan and McGuinty. McGuinty has prorogued Parliament in order to stop any further investigation or formal charges being laid, but surely the Ontario Ombudsman can and should do something about this before it is too late!"

January 9, 2013 - 12:44 pmCongratulations Mr. Burgess

Congratulations Mr. Burgess on your well put view of the corruption in this Liberal Government. In the beginning if all 60,000 or so people involved in the horse business would have formed one party (UNION) or became members of such, they would not be in this situation. The Union or its Lawyers, would have demanded an internal investigation of the OLG's ridiculous and corrupt plan. Look at all the wasted tax payers dollars that this situation has created, all because of THE GREED OF SOME WELL PLACED PEOPLE, ask the people who receive welfare benefits (not of their choosing), how they get by, and maybe some of these so called RESPECTED BILLIONAIRES COULD LEARN A LESSON OR TWO ON HOW TO MANAGE THEIR MONEY INSTEAD OF DIGGING INTO THE TAX PAYER'S POCKETS FOR THEIR SPENDING HABITS. Have a good day and thank you Mr. BURGESS.

January 9, 2013 - 12:35 pmThank you for not giving up

Thank you for not giving up Mr. Burgess. I agree with you 100%. It is about time the dirty truth about what is really going on behind this self-serving decision the Liberals have made regarding expanded gambling and horse racing in this province.

January 9, 2013 - 11:47 amBravo Mr. Burgess. This

Terry Lantz SAID...

Bravo Mr. Burgess. This letter speaks of actual truths and absolute facts. If only all the Liberal candidates actually read this and get to the bottom of it all then hopefully the racing industry in Ontario could be saved. It has shown that you have NOT rolled over and accepted what is being done to this industry.

January 9, 2013 - 11:37 amGreat Letter. It needs to be

Georg Leber SAID...

Great Letter. It needs to be published in Newspapers and on TV. This needs a little explaining.

We know the National Post is not going to print this letter (Godfrey is CEO). By the way the same group, Postmedia Network Canada Corp owns 20 newpapers across Canada including the Ottawa Citizen and Windsor Star.

This corporation was formerly Canwest. The television broadcasting was sold off to Shaw Communications. They are cable tv suppliers, mainly out west but they own television stations as well. They at one point tried to buy 3 CTV affiliates in Ontario including one in Windsor. I leave it for someone else to see where this trail might lead.

It answers several of my questions as to why the media is extremely limp at picking up our story. Control the media and you can win the war with propoganda. Of course the other part of this is the vast amount of advertising that the OLG does on other channels and in other publications, no doubt for consideration of not running negative press on Godfrey's master plan.

Media also influences elections and leadership conventions. The National Post is very clearly Liberal (imagine that). They also favor Sandra Pupatello who is really just a Dwight Duncan puppet. Duncan is giving up his seat for her to run in that riding.

Georg Leber-ICR Racing


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