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Eaves Talks Handle, Quebec, Fort Erie

weg-eaves.jpg

Published: December 14, 2009 1:40 pm ET

Last Comment: December 17, 2009 10:01 pm ET | 4 Comment(s) | Jump to Comments

Woodbine Entertainment Group president and chief operating officer Nick Eaves joined Fan590 talk-show host Mike Hogan this morning for an on-air interview. During the segment, Eaves discussed the shut down of the Quebec horseracing industry, WEG's ongoing attempts to aid in its revitalization, and thoroughbred course Fort Erie Racetrack, which seemingly faces a steep mountain to climb in 2010.

The Fan590 interview was precipitated by an article this past weekend by The Globe and Mail in which it was confirmed that WEG has seen its weekly handle take as much as a $500,000 hit since simulcasting has been shut down in the province of Quebec. The article stated that, overall, WEG's weekly thoroughbred pools have seen $200,000 less action and its standardbred pools $300,000 less since Attractions Hippiques ceased simulcasting.

"The report in The Globe and Mail on the weekend referenced $500,000 a week in wagering. That's not an insignificant number," Eaves, who will soon become the next CEO of WEG, told Hogan. "It's thankfully only a relatively small part of the total wagering that various markets bet on Woodbine. But, in this day when it's pretty tough to grow a business never mind hold the line, to see that type of a reduction is a bit of a tough thing."

To aid his listeners in understanding how the complex situation in Quebec came to be, Hogan asked Eaves for a 'Coles Notes' version of the events which led to the current situation. Eaves obliged, and later in the interview went on to explain how WEG is doing all it can to provide aid to whatever group tries to get live racing in the province of Quebec back up an running (during a recent installment of Trot Radio, Norm Borg interviewed Joe Faucher about his group's efforts to get the industry in Quebec back on its feet).

"It's a tricky thing to understand. At the moment, the former operator (Attractions Hippiques) is under creditor protection, so that limits what both the regulator and other interested operators can do," Eaves explained to Hogan. "We've had conversations with a couple of interested groups that want to see the return of live racing in Quebec. These are invested industry participants that have a financial interest in racing and it's been their livelihood for some time; so we'll work with whoever emerges as the group that can get live racing started again in Quebec if there is a will on the part of the province to help them.

"We've tried to do it (provide help) in stages. We operate -- Woodbine does -- a national, with the exception of Quebec, account wagering operation that has both telephone wagering and internet wagering. We've indicated that we'd be more than happy to work with the province of Quebec to at least make that legal alternative available to their customers. Again, it's a bit complicated due to the bankruptcy protection, and really the latitude the regulator has, but we've indicated that we'd be delighted to help and want to play a part in bringing about a solution. Even though it is not our market, a failure of any kind in horseracing is not a good thing for those of us who are in the business. It is in our interest to help them try to enjoy some success."

Eaves also stated that Woodbine Racetrack recently reported that its thoroughbred handle increased in 2009. During the Fan590 interview, he spoke vaguely of the standardbred handle for this year.

"At Woodbine we had a pretty strong thoroughbred season. We just announced our meet-end results and we grew the business by about seven per cent in 2009. We're pleased about that. We haven't enjoyed the same level of success on our standardbred product, so that's an area we're focusing on. We're showing some growth; we're going to have to work awfully hard to keep growing that business."

As Eaves may have been vague about the standardbred numbers, one thing he wasn't vague about was the situation that Fort Erie Racetrack currently finds itself in. Having risen like a phoenix from the ashes, the border oval was able to host live racing in 2009, but, as Eaves conveyed, 2010 may be an even more challenging year for the historic raceway.

"I would say that it (Fort Erie's current situation) doesn't look terribly bright," he said. "We (Ontario Jockey Club/WEG) owned Fort Erie Racetrack up until 1997 and we sold it 12 years ago because certainly we were concerned that there wasn't enough of a market there. We saw the competition really building up around in Niagara Falls -- both in Ontario and New York, and Buffalo, New York and elsewhere.

"It (Fort Erie) is a small market where there is plenty of competition and not enough demand for the racing business, so I don't know if there is a whole lot of reason for optimism for that track. A year ago people were having the same discussions, and it didn't look like it would get open for this 2009 racing season. It did (open for the 2009 racing season) because people stepped in and put up some money. The real question is: will that investment be there for the 2010 racing season? Certainly, there is no indication today that that's going to be the case."

December 17, 2009 - 10:01 pmThe rideau carleton racing

The rideau carleton racing community has been in disarray because of the nightmare situation in Quebec , and the pressure on the purse account trying to accomodate the transient horse community from Q uebec. There has not been one discussion on this website abo ut the devestating effect on the permanent ontario residents who own, train or drive horses for the last ten years ,and have called rideau their home track. But have this problem affect weg for a few weeks and now we got a problem. Having over 200 starts as an owner in 2008 and less than 30 in 2009 at rideau carleton I will not have a meaningful horse presence in rideau until the orc will allow racetracks in ontario to institute the same policies that exist in slot jurisdictions such as Pennsylvania where almost every race is Pennsylvania sired or owned preferred. As a ontario resident you can enter your camluck filly who hasnt raced in 3 weeks at pocono and if there are 9 pennsylvania owned or sired horses entered in your class, you are not getting in.My guess is weg will get back their lost handle from Quebec and this problem will go back to the back burner. As this industry is destroyed from the borders inward ,the proper targeting of the slots subsidy will only become an issue when weg and central ontario horsepeople deem it to be important. Windsor is destroyed,Rideau is a mess, Michigan horsemen are increasingly being seen at Western fair, Quebecers are being seen at Kawartha, the problem is comin to a track near you.

December 14, 2009 - 6:37 pmRandy, why were slots

Maury Ezra SAID...

Randy, why were slots introduced at racetracks to begin with? We know the answer.
It isn't all about what is most viable to make the most money when discussing whether Fort Erie is more important than Quebec.
Lets look at the big picture. Where are horses that don't poly or can't compete at Woodbine's bottoms run? Do you think owners are going to want to constantly make choices about sending their horses down south when they are off form? And don't owners like having the option to watch their horses run live?
Take that away, and you wind up with less horses, and less demand for horses. Who else gets hurt? The breeders of course.
And when that happens, the Ontario government might ask themselves why they are giving slots to racetracks in the first place? They aren't supposed to be in the casino business worrying about the bottom line from slots. They are supposed to support the ONTARIO racing industry.

December 14, 2009 - 5:33 pmIf we're going to try and

If we're going to try and regain lost ground for the industry, we're going to have to also be able to analyze situations differently, rather than relying on the same tired criticisms of industry players. The horse racing industry is in a crisis and some parts of it can be saved, while others are becoming a money pit.

In Quebec, there was about $115 million of wagering in total last year. The amount that was wagered into the WEG pools came in at about a 3% commission level, so on the whole, it did little for either the track or the purse accounts. However, the total wagering dollars did help with pool sizes and that in itself is a valuable contribution in that it helps attract other wagering.

On the Quebec side, about $100 million of the $115 million was wagered outside the province. If wagering were to remain at that level, even if the proportion wagered on in-province racing was less, a Quebec association getting the benefit of all the remaining commission amount might have $15-20 million to work with. If that amount were split along traditional lines, there'd be $7-10 million for operations and $7-10 million for purses. Spread over 50 days of racing, on my math, that would work out to a potential of somewhere between $140,000 and $200,000 per day for purses. More than that, every dime would have been generated by wagering which is a claim no track in Ontario can currently make. In my view, that might make the operation viable. I'll bet that at least it will attract both interest and entries. It might even attract wagering into Quebec.

I can't speak to the economics of Fort Erie, but I expect they are somewhat less compelling. Moreover, the fact is Fort Erie already has a pride of place in the WEG wagering operation, including televising of the races on HPI. The stark and simple reality is that with that assistance, and with slot revenue, it does not appear to be destined to succeed.

I'm not sure that there's much evidence of favouritism for Quebec harness and disregard for Fort Erie in the statements made by Nick Eaves. However, it may be the case that in reality, Quebec might be the better bet for long term viability with a changed business model. It's worth making the effort to offer assistance.

December 14, 2009 - 2:11 pmFort Erie was sold in 1997

Maury Ezra SAID...

Fort Erie was sold in 1997 for next to nothing. Two years before they got slots. The new owners made a fortune on their cut and then 9/11 and Sars happened along with increased competition.

Fort Erie wasn't sold because the OJC had great foresight. They were just getting rid of things that were losing them money at the time.

"Even though it is not our market, a failure of any kind in horseracing is not a good thing for those of us who are in the business. It is in our interest to help them try to enjoy some success."
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He appeared nonchalant and even indifferent when it comes to the plight of Fort Erie, but is worried about Quebec harness racing? If there is no B thoroughbred track, owners will disappear and the breeding industry which is already on life support will have the plug pulled in Ontario.

Why is he concerned about Quebec? Because of the potential lost betting revenue. Nothing more, nothing less.

The focus of WEG now seems to be grab what they can and expand gaming (other than horse racing), as horse racing has now become a necessary evil.


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