With the OLG’s announcement to eliminate its strategic partnership with the horse-racing industry, MPP Jeff Yurek (Elgin--Middlesex--London) has just one question: how is eliminating the OLG’s most fruitful partnership of the last 10 years a good business decision?
In a press release from Yurek's office, the MPP discusses his stance on the OLG's recently-revealed modernized gaming strategy stating that abandoning partners is a bad business decision.
Ten years ago, the government sought ways to increase slot revenue. They struck a deal known as the Slots at Racetracks program which in 2010 generated $1 billion in operating profit. At $2 billion, the revenue from the Slots at Racetracks arrangement accounts for 33 per cent of the OLG’s total revenue.
“This has been a fruitful partnership for both Ontario’s horse-racing industry and the OLG,” said Yurek. “It allows the government to offer slot gaming at locations outside of resort casinos without having to spend millions of dollars to build their own facilities.”
Minister Dwight Duncan shook rural Ontario recently when he announced that he would end the agreement between the OLG and the horse racing industry. Despite the government receiving their highest dividend ever from the OLG of $2 billion in June, Duncan wants to eliminate this profitable business arrangement.
“From a business perspective, I just don’t understand this move,” remarked Yurek. “Here you have this solid partnership that has generated billions of dollars to fund health care and education and the government isn’t even interested in working with their partner to develop a strategy. It’s a shame and as I say poor business.”
The release states that such bad business decisions by Ontario’s Crown Corporations are unfortunately common. Many people were left scratching their heads when the Auditor General revealed that the LCBO pays more than market value for many products due to an inane and complicated pricing formula.
Now the horse-racing industry is experiencing first-hand the follies of dealing with a government-run business.
With nearly 60,000 jobs tied either directly or indirectly to horse racing, the news has sparked fear and uncertainty. Breeders’ businesses have come to a halt as cancelled orders skyrocket.
“I think the uncertainty is the worst part of this situation,” said Yurek. “People don’t know whether the fate of the Slots at Racetracks program at Fort Erie, Windsor, and Sarnia will be the fate for all racetracks across Ontario.
“I think Duncan owes it to all the families that are affected by his unilateral decision to at least level with them and give them some clarity on what his true intentions are. While he’s at it, he should also let us know how he intends to make up the $1 billion profit that will be lost by cancelling this program.”
(With files from the Office of MPP Jeff Yurek)