Ontario Racing Shares Facts About Horse Racing Funding

The Letter of Intent as a Starting Point

The recently completed industry consultation on long term funding revolved around a proposal developed by Ontario Lottery & Gaming (OLG), Woodbine Entertainment Group (WEG) and Ontario Racing (OR). To engage the industry in meaningful discussion, it was necessary to create an initial framework as a starting point.

The LOI dated September 19, 2016 and released on February 10, 2017 was created to be this starting point – not an ending point. The framework document dated September 19, 2016 is the only LOI and there will not be a new or final LOI. The comments and suggestions from the horse racing industry that will be contained in the Ontario Racing consultation report are important and will be used to guide the negotiation of a long-term funding agreement.

Slot Lease Revenue and Horse Racing

When the provincial government cancelled the ‘Slots at Racetracks Program’ (SARP), they severed the connection between gaming revenue and horse racing. The existing post-SARP slot leases at racetracks and the revenue they generate are related to gaming – slot revenues support the capitalization, operation and management of slot facilities. The notion that current slot lease revenues are wholly available to support or augment horse racing revenue is not accurate.

The contractual agreements between OLG and racetracks related to slot leases have been considered ‘private’ because they are commercial contracts that are gaming related and not horse racing related.

The Horse Racing Industry by the Numbers

Everyone in the horse racing industry is challenged with the availability of accurate and factual information and financial statistics. In some cases, we know exact numbers - like gross wagering revenues in Ontario and pari-mutuel tax reduction (PMTR) revenues.

Ontario Racing spearheaded the release of the Horse Racing Partnership Program (HRPP) revenues and we also know the exact amount of the Enhanced HIP revenue flowing through OMAFRA to the industry for breeders’ associations and breeder awards. What we don’t know relates to individual racetrack wagering and commissions, and race track operation costs.

We know that the $99.4 million of government support through the HRPP was allocated like this:

• $80.8 million went to all racetracks for purses
• $5.7 million went to breeders awards (Enhanced HIP)
• $11.0 million went to racetrack operations – all at FAR racetracks (Fort Erie, Ajax, Rideau Carleton) and regional racetracks (Leamington, Hiawatha, Kawartha and Dresden)
• $1.96 million went to programs and administration (2015 data) – ORC, marketing, responsible gambling etc.

 It is important to note that 80% of government funding goes directly to purses.

The Pari-Mutuel Tax Reduction

We know that the Pari-Mutuel Tax Reduction (PMTR) generated $60M in revenue in 2015-16. (A detailed breakdown of this funding can be found on the Ontario Racing website).

• $26.0M went to the Horse Improvement Program – purses & awards (Thoroughbred & Standardbred)
• $13.0M went to Racetrack Customer Benefits – direct marketing, player rewards, etc.
• $10.9M went to Racetracks – racetrack operations & capital improvements
• $6.5M went to the Ontario Racing Commission’s regulatory services
• $3.5M went to Horsepeople Benefits and Marketing (Money received by horse people's associations for medical, dental, life insurance, fire and transportation along with third party liability insurance while racing or qualifying at Ontario racetracks. The marketing money is being held in trust until a decision from the Horse Racing Appeal Panel on how it should be distributed is released.)

Available Information

Drawing conclusions on the financial state of the industry with estimates, incorrect information and faulty assumptions is not a responsible approach. Not all revenue and expense information is accessible to all industry stakeholders due to legal restrictions imposed on agencies, government and private businesses. 

Ontario Racing will continue to champion more transparency and as much information sharing as legally possible, with all industry participants.