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More On Ontario Funding Model

Published: March 3, 2014 2:36 pm ET

Last Comment: March 4, 2014 5:00 pm ET | 6 Comment(s) | Jump to Comments

Ontario Horse Racing (OHR) today released more details related to the $80 million annual funding under the Horse Racing Partnership Funding Program (HRPFP).

The details of the five-year government funding program were confirmed on February 13, 2014 following the government’s approval of the HRPFP Order in Council.

This announcement offers assurance to the racing industry that over the next five years, race dates (around 900 live dates per year) will be stable and purse levels guaranteed.

On October 11, 2013, the government released the five-year Horse Racing Partnership Plan to help Ontario’s horse racing industry build a sustainable future.

The government has committed to support the horse racing industry by:

  • providing up to $400 million over five years ($80 million each year) to sustain a wide range of racing opportunities across the province;
  • developing a new industry governance structure; and,
  • integrating horse racing with the Ontario Lottery and Gaming Corporation's (OLG) modernization plan.

The HRPFP funds, combined with the other sources of industry revenue, will be used to support the industry as follows:

$80 million per year in HRPFP funding

Approximately 90% of the HRPFP funding (approximately $72 million) is intended for the support of live racing at the core racetracks and industry development programs such as provincial marketing, animal welfare and responsible gambling that benefit the entire industry. OHR, the new industry development division of the Ontario Racing Commission (ORC), will be responsible for the delivery of the HRPFP and for the development and implementation of industry programs.

The remaining share of the HRPFP funding – around 10% or approximately $8 million – is being explicitly directed to purse accounts at regional racetracks.

Overall, more than 96% of HRPFP funding will be dedicated to purses at racetracks across Ontario.

Pari-Mutuel Commissions

Pari-mutuel commissions will continue to be split between the horse people’s purse accounts and the racetracks. For greater clarity, the direction to allocate 100% of pari-mutuel commissions to the purse accounts, as happened last year, will no longer apply.

Sharing the commission keeps horse people’s revenue from purses tied to the market and keeps everyone’s focus on the customer. Linking their success to the growth of the pari-mutuel product will benefit both racetracks and horse people, and will promote alignment with the common goal of increasing the fan base and enhancing wagering revenues.

Conceptual changes to the operation of telephone account betting and teletheatre networks were also included in the Horse Racing Partnership Plan. Telephone account betting (TAB) will be operated within a single, province-wide home market area by a sole operator. Similarly, a competitive procurement process has been undertaken to consolidate the operation of teletheatres across the province to a single network. Net proceeds of TAB and teletheatre wagering will be directed to racing at the core tracks with future growth of revenues split between the core and regional tracks on a 90:10 basis.

Regional racing – track operators and purse accounts – will continue to benefit from all pari-mutuel commissions and other revenues generated on-track. These revenues will be kept by the track at which they are generated.

The costs of horse people’s benefits programs will also be funded from pari-mutuel commissions. The funding model targets approximately $2.5 million for the operation of a consolidated industry benefits and insurance program for all active industry participants across all breeds.

Future growth of pari-mutuel commissions will be allocated for reinvestment in racing through a blend of marketing, research and development, and capital expenditures, as well as for purses and racetrack operating costs related to additional race dates.

Other costs and sources of revenue

As noted above, ORC regulatory costs will continue to be funded through the PMTR, or “wagering levies” as they are sometimes called. In turn, the ORC has committed to reducing licence fees for both racetracks and individual participants. This mix of regulatory funding demonstrates the rationale that regulatory fees are tied to the pari-mutuel handle and racing activity – in other words, regulatory funding will reflect the size and needs of the industry.

The final sources of industry revenue are the OLG leases signed with the racetracks and any additional revenue that results from the re-integration of horse racing and gaming. Both of these sources will also be used to support the operations and capital improvement of racetrack facilities.

Growth potential for the Industry

Going forward, the HRPFP funding model also recognizes reasonable returns and the potential for profitability for all industry participants – racetracks, horse people and breeders. Similarly, there will be expectations for capital re investment where it makes business sense and the maintenance of a strong focus on meeting customer needs.

The Horse Racing Partnership Funding Program is part of the Ontario government's ongoing plan to foster a dynamic and innovative business environment.

Growth of the industry – for all stakeholders – will come from performing well in the marketplace and expanding the fan base (particularly the horse players). The Plan encourages the industry to grow wagering revenues and enhance its fan base by creating and offering products consumers want.

Steve Lehman
Executive Director

(ORC)

March 4, 2014 - 5:00 pmIntegrating horse racing with

Norm Brunet SAID...

Integrating horse racing with OLG modernization plan. Well were coming up on the 2 year anniversary of the announcement of the termination of SARP. Tracks that were NOT making enough money via the slots were closed down and other tracks that were doing well like Windsor ( 40 Million $ profit last year of operation )but were competition to the OLG stand alone casinos were closed down.
The last 2 years we saw a large exodus of horses, broodmares, stallions and last but not least jobs go south of the border. The price of Ontario breds dropped by 50% putting all breeders at risk financially. We are now officially subsidized by this Government rather then being partners in a revenue sharing agreement.
Many Municipal Governments were torn apart over the decision to host a casino that in all eventuality will NOT happen.
Just a brief recap of what went on over the last 2 years and we the horseman still don't quite understand what THE PLAN IS !!!

March 4, 2014 - 10:25 amCustomer friendly-these words

Customer friendly-these words just jump out at you! What did the horsemen do to make standardbred racing customer non friendly? We had world class racing, because we had world class breeding and we had world class breeding because we had over 10,000 owners and breeders willing to invest an average of $220,000. in the sport(2010 study commissioned by the Federal Government). We had world class stallions; where are Muscle Mass and Bettors Delight now? We had world class drivers; where is Scott Zeron now? The number of owners that have thrown in the towel is catastrophic to the industry; breeders are in the process of suing the government and the O.L.G. for the disaster that they (the government and OLG) have created. What is so hypocritical about all this is the fact that the three so called Amigos have directed the government in a direction that will not result in a positive outcome for horse racing. They have to know that the culprit in all this is 'some' of the race tracks. Some were allowed to take their share of the slots and invest nothing to make their facilities customer friendly. The dining room at Georgian Downs was closed last year-how does that help customer friendly? OLG has made sure that their rest rooms are customer friendly, the entrances at most of the tracks are designed to take you to the slots! The list just goes on, but everyone knows that the slots are the crack cocaine of gambling and unless we are partners with that obvious winner, we can not win! We the horse people(the throw aways) have so little hope,so little trust in the people now in charge. And lastly, why were the culprits('some' of the race tracks)not held to account in this "customer friendly" scenario. Why were they so richly rewarded by to the tune of millions of dollars with secret contracts; perhaps the Auditor General will give us the answer, if the report ever sees the light of day!

March 3, 2014 - 7:24 pmI still have questions. Will

Greg Perry SAID...

I still have questions. Will this funding program end at the end of 5 years?
If not, why don't they renew it each year so everyone knows they have a 5 year future in the business? If it will end in 5 years does anybody think we can increase betting enough to survive beyond that point? Does anybody believe the
OLG is going to work with us, especially if the premier that directed them to do so loses the next election?

March 3, 2014 - 6:05 pmExpanding the Horse Players!!

Expanding the Horse Players!! Good luck with that in Ontario!!

March 3, 2014 - 3:20 pmOk,......can anyone out there

Ok,......can anyone out there tell us what that all means ??????

March 3, 2014 - 2:50 pmIntegrating horse racing with

Integrating horse racing with OLG modernization plan??? What all is contained in that to benefit the racing industry? They were allowed to get established at the tracks as per the previous agreement and they are still at the tracks selling lottery tickets, slot machines etc. which all cannibalizes the racing sector in exchange for what? I firmly believe they should not be allowed at the tracks to compete with our industry. Do you allow Ford to sell their new cars on a GM dealerships lot?


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