On Tuesday, March 26 it was announced by both the Ontario Liberal Party and the Great Canadian Gaming Corporation that transitional funding agreements have been reached which will ensure the continuation of live racing at Flamboro Downs and Georgian Downs beyond March 31, 2013. The Province of Ontario has also announced that it has reached a transitional funding agreement for the Fort Erie Race Track.
Both the Province of Ontario and Great Canadian have issued releases regarding the tentative transition funding agreements, although neither release goes into detail regarding terms of the deals.
There has yet to be a release from the Fort Erie Live Racing Consortium (FELRC) regarding a transitional deal. The consortium operates live racing at the historic thoroughbred border oval. It has been reported that the FELRC will be holding a press conference this Thursday (March 28) at 11:00 a.m. to announce its deal.
The Ontario government's transitional funding announcement is the third of its kind since the Provincial Liberal Party dropped the bombshell in 2012 that it would be terminating the slots-at-racetracks program effective March 31, 2013. The first of the announcements came this past January and pertained to the continuation of live racing at Woodbine Racetrack and Mohawk Racetrack (for expanded coverage of that announcement, click here). The second of the announcements came earlier this month at Grand River Raceway, where it was announced that transitional funding deals had been reached with Grand River Raceway, The Raceway at the Western Fair District, Clinton Raceway and Hanover Raceway. It was also made clear during the Grand River Raceway announcement that horse racing would be incorporated into the Ontario Lottery and Gaming Corporation's gaming modernization plan.
The contents of the Province of Ontario's most recent release on the transitional agreements appear below, followed by the contents of the Great Canadian release. The Ontario Horse Racing Industry Association has commented on the deals, and the contents of its release appear below the Great Canadian release.
Trot Insider will update this story if the FELRC issues a press release on the situation.
Three More Race Tracks Sign Funding Agreements
Ontario Government Committed to Sustainable Horse Racing Industry
The new Ontario government has reached tentative transition funding agreements with Georgian Downs, Flamboro Downs and Fort Erie Race Track -- the latest step in ensuring race dates for the 2013 season.
They join six other race tracks that have also reached agreements-in-principle for transition funding. Western Fair, Clinton, Hanover and Elora also signed agreements-in-principle with the province earlier this month, while Woodbine and Mohawk race tracks signed on Jan. 23, 2013.
The new Ontario government will continue to negotiate agreements with other interested race tracks to provide transition funding for the next three years in order to ensure a strong future for horse racing in the province.
- Georgian Downs and Flamboro Downs are operated by Great Canadian Gaming Corporation.
- The Horse Racing Industry Transition Panel, made up of former cabinet ministers Elmer Buchanan, John Snobelen and John Wilkinson, released its final report on Oct. 23, 2012.
- Up to $30 million will be available for the Horse Improvement Program in 2013. The Horse Racing Industry Transition Panel, the Ontario Racing Commission and members of the province’s world class breeding industry are discussing the allocation of these funds.
- The Ontario Lottery and Gaming Corporation has reached commercial lease agreements-in-principle with all 14 race tracks in the province that host slots facilities.
Kathleen Wynne (Premier and Minister of Agriculture and Food): "Ontario's horse racing and breeding industries are an important part of a healthy economy in Ontario. We will continue to work in consultation with the industry partners for the long-term good of the industry and the province."
Howard Blank (Vice President Communications for Great Canadian Gaming Corporation): "Today’s announcement is good news for the future of horse racing in Ontario. We are pleased to be able to welcome live horseracing fans to our properties this season."
(Ontario Ministry of Agriculture and Food)
Great Canadian Gaming Reaches Agreements in Principle for Transition Funding for Horse Racing at Georgian Downs and Flamboro Downs
Great Canadian Gaming Corporation today announced that it has signed agreements in principle with the Government of Ontario for transition funding. This funding will provide support to continue horse racing at the company's Georgian Downs and Flamboro Downs racetracks beyond March 31, 2013 as Ontario's horse racing industry adapts to a more sustainable model.
The letters of intent set out the key terms for transitional funding and the expected number of race days, which will form the basis for formal transfer payment agreements. Once completed, the formal agreements will be subject to approval by the Ontario Ministry of Agriculture and Food.
"Today's announcement is good news for the future of horse racing in Ontario," stated Mr. Howard Blank, Great Canadian's Vice President of Communications, Entertainment and Responsible Gaming. "We are pleased to be able to welcome live horse racing fans to our properties."
"Ontario's horse racing and breeding industries are an important part of a healthy economy in Ontario," stated Ms. Kathleen Wynne, Minister of Agriculture and Food for the Province of Ontario. "We will continue to work in consultation with the industry partners for the long-term good of the industry and the province."
Once formal transfer payment agreements have been signed with the Government of Ontario and once definitive lease agreements for the Ontario properties have been signed with the Ontario Lottery and Gaming Corporation, the Company will need to re-evaluate its assumptions used in the recent long-lived asset impairment tests for these properties. Based on the terms of the letters of intent for the transfer payment agreements (along with the letters of intent for the lease agreements), we continue to expect the company's Ontario properties' EBITDAs will decline as compared to the levels realized in 2012. However, the company expects that it may need to record long-lived asset impairment reversals for Georgian Downs and Flamboro Downs.
OHRIA: Deals for Fort Erie and Great Canadian Gaming but Long Term Integration Still Needed
The highly successful Slots at Racetracks Program ends in one week, and while OHRIA is pleased with deals for racing at three more Ontario race tracks, the industry association is still pushing for financial details from government on the promised long-term integration strategy.
In a press-release earlier today, Premier Kathleen Wynne, announced that a deal has been made between OMAFRA’s Transition Panel and Great Canadian Gaming, owners of Flamboro Downs and Georgian Downs race tracks, as well as with the Fort Erie Live Racing Consortium, who operates Fort Erie Race Track. The deals will allow all three tracks to host racing in 2013.
“While we are happy with the announcement that there will be racing at three more racetracks in 2013, OHRIA is continuing to stress the importance of details of the long-term integration strategy,” commented Sue Leslie, President of OHRIA. “Without knowing the financial returns long-term, breeders and owners will continue to resist investment if they cannot see a viable future for the industry.”
Earlier this month, Kathleen Wynne, speaking in her role as Minister of Agriculture, announced in a press conference at Grand River Raceway that horse racing will be integrated into the Province’s gaming strategy. This announcement did little to quell the fears of investors as financial details and timelines were not provided along with the announcement and have yet to be revealed.
“We need to know financial details for the long-term which is why we are asking Premier Wynne to extend the existing Slots at Racetracks Program until a strategy going forward can be formulated,” stressed Leslie. “We understand the need for our industry to evolve, and to provide good public policy for the government, however our industry will not survive on short-term promises. We need the details of a commitment now.”