Burgess Letter On Consultations

Published: August 13, 2013 01:12 pm EDT

After meeting with the Ontario Horse Racing Industry Transition Panel, Hall Of Famer and breeder-owner Robert Burgess has issued the following letter to the industry as a follow-up to his report in July.

Burgess met with the Panel along with prominent horseman Robert Fellows and another Hall Of Fame member, COSA President Bill O'Donnell. The letter, signed by Burgess and Fellows, appears below.


Updated Status Report to Ontario's Standardbred Horsemen and Breeders from Robert Burgess and Robert Fellows.

This Updated Status Report covers the very important matters discussed during our meeting with all three members of the Ontario Transition Panel, John Wilkinson, John Snobelen and Elmer Buchanan on Friday afternoon, August 2, 2013. William O'Donnell of COSA also attended this meeting.

1. A document titled "Current Status Report" was originally filed by Robert Burgess with the Transition Panel on July 16, 2013. In this report Burgess reviewed the Transition Panel's draft plan in detail and seriously challenged the Transition Panel's basic and 100% faulty premise.
This premise, that SARP had been introduced in 1998 in order to stabilize the horse industry , formed the inaccurate basis upon which the Transition Panel had based its radical draft plan for our industry's future.(this plan, if implemented, would destroy horseracing in Ontario)!
The Transition Panel has titled its draft plan "Toward A Sustainable Future-- a Plan for Horse Racing in Ontario" and has attempted to justify its controversial recommendations (including cutting purses by over 50% and reducing racing opportunities by over 50%) at seminars that it held for skeptical horsemen and breeders at Western Fair, Woodbine, Ajax and Ottawa. The effect of these recommendations will reduce Ontario standardbred racing from its current proud ranking of #1 in the World.

2. The Transition Panel in its draft plan for a "sustainable future" claimed that the slots program called SARP had been originally introduced in 1998 "in order to stabilize the horse industry" --- when we all know that the real facts were that the slot machines were only introduced into Ontario so as to enable the OLG to raise one billion dollars in net new funds every year for the Government of Ontario. In general terms, there was no need to stabilize our horseracing industry at that time.

3. To permanently create this opportunity for an annual one billion dollar bonanza for the Ontario Government for 1998 and for every year thereafter horseracing was required to surrender its gaming monopoly at our various long standing locations in Ontario. Horseracing was required by Government to permit our main competition, the OLG, to occupy and operate its slot inachines under horseracing's unique and exclusive zoning from horseracing's grandstand facilities all across Ontario.

4. However, the 10% from slots revenues traditionally paid to our horsemen and breeders under SARP in return for this essential concession by Ontario's horsemen made it possible for Ontario harness racing to prosper and expand, and to retain its preeminence in the world rankings -- until struck dead by Mr. Duncan's sudden announcement on March 12, 2012.

5. We hereby confirm to you that the Transition Panel has now been made fully aware, as the "stranded purse" funds run out and as the remaining SARP funds for the first three months of 2013 evaporate, that harness racing in Ontario, as we know it, will die. Without realistic purse monies and without adequate race dates ONTARIO will be without owners to buy yearlings and racehorses and without the owners' capital to pay training bills. Standardbred racing in Ontario will be doomed if the Transition Panel has its way. The Panel has been made aware that the size of almost all major racing stables in Ontario has already been reduced by 50% to 60% and that the smaller stables, having been family-run through generations, have almost given up. We raced for $4,000 purses thirty-five years ago and cannot do so now. The panel members appeared to indicate to us that they do not care. It is estimated that a billion and a half dollars in wages will be lost this year because of Duncan's order. And the Panel does not care about that either. We find it very hard to understand how Premier Wynne and Mr. Sousa can continue to be supportive of the Panel.

6. Unfortunately, from time to time the members of this Panel made it very clear to us at our meeting that they do not appear to understand or care about our crisis and the resultant job losses and pain. We all understand the importance to the Ontario economy and to the Ontario job front of the continued existence of large 60 horse public stables like that operated by Robert Fellows concentrated in racing at Mohawk and Woodbine. Unfortunately the Robert Fellows stable has now been reduced to 27 horses from 60 and will not be adding yearling purchases this fall. Last year his stable purchased 13 yearlings. To hopefully assist the Panel in understanding how stables of this size are normal small businesses operating in rural Ontario we filed with the Panel copies of Robert Fellows' federal income tax returns. We also filed full and detailed employment records for each of his employees and details relating to his retention of veterinarians, blacksmiths, feed companies, hay suppliers and expenditures on equipment purchases and repairs.

7. In fact, the Panel's unyielding stance on the destruction of standardbred racing in Ontario seemed to us, at our meeting, to be totally inconsistent with Premier Kathleen Wynne's enthusiasm and public utterances dealing with the future of horseracing in Ontario. Premier Wynne and Mr. Sousa have amply demonstrated to us their integrity and courage in their handling of the Paul Godfrey matter.

8. Furthermore the Panel members argued strenuously with us at our meeting on Friday that the 10% from slot revenues paid to horsemen under SARP for 12 years was not meant (for some unfathomable reason not explained to us) to be "permanent" but only "long term"!
In our opinion this incomprehensible attitude does not reflect an appropriate public policy for agriculture in rural Ontario.

9. Since the OLG slots currently continue to operate every day at full speed under racing's unique and exclusive zoning at all of our racetracks (albeit not as successfully as they had operated at the time when the slots were still complemented by horse racing prior to the cancellation of the SARP program) we still have absolutely no idea what the Transition Panel had in mind by their expression "long term". We fail to see any rationale at all for cancelling SARP without and until a mutually satisfactory replacement funding formula is in place. As long as the OLG slot machines are still operating in our racing facilities we must have SARP or a mutually satisfactory replacement funding formula!

10. By far the most remunerative (to the Ontario Government - approximately $600 million dollars annually) slot machine site in Ontario is the site at Woodbine Racetrack. A carefully negotiated renewal agreement was entered into by Woodbine Entertainment with the OLG in 2010 to install 1,000 additional slot machines and to extend the Woodbine license term potentially to 2025. One would normally have assumed that "long-term" would have meant that under SARP the payment to horsemen of 10% from this increase in slot revenues would have continued likewise to 2025. Obviously news of this slot renewal to 2025 and news of a big expansion instilled widespread long term confidence in Ontario's horse industry. However, this key long term expansion was also reversed by Mr. Duncan within a year of its signing with no prior research and with no reason given.

11. During our discussion with the members of the Transition Panel they expressly discouraged and spoke against any institution of legal actions by horsemen and/or breeders for damages against the Government or for damages against the OLG. They recommended against both class actions and actions to be based upon the legal theory of detrimental reliance. The Panel did not suggest to us any alternative means by which our horsemen could achieve fairness or compensation for their unexpected losses due to the precipitate and willful behaviour of our Provincial government.

12. Furthermore, it was not at all comforting to us to be advised by the Transition Panel in their role as senior representatives of our Ontario Government that if there had indeed been a breach of contract committed by Government or by the OLG this breach would only have amounted to a breach of a moral obligation! They told us that they did not view moral obligations seriously.

13. In response to questions from the Panel about possible legal proceedings by aggrieved horsemen we confirmed to the Panel Members that neither of us had a mandate to institute or discuss legal proceedings of any kind against the Government or against the OLG. on behalf of individual or collective horsemen and/or breeders. That is the role of counsel for the aggrieved party.

14. However, in response to their questions we did advise the members of the Panel, that based upon many discussions we have heard from standardbred horsemen and standardbred breeders, there is a great degree of outrage, disappointment and bewilderment over the current crisis. It seems to us from these discussions that a much more likely course of action to be followed by aggrieved horsemen and breeders (other than standard legal proceedings in response to the stonewalling they are receiving from their elected representatives) would be to collectively take matters into their own hands. This other alternative course of action could more than likely be patterned after the recent radical steps taken by Ontario's school teachers and by Ontario's native Indians.

15. Accordingly, we informed the Panel in answer to their questions that total desperation with the complete unfairness of their situation might ultimately lead standardbred horseman and breeders to demonstrating with caravans of horse trailers at 15 kilometres an hour on Highways 400 and 401. This may be all bravado but in our opinion this alternative seems to have the broadest support. The other alternative action that we have also heard widely discussed would involve the staging of a series of sit-ins utilizing all the stools at specified slot locations on racing's dark days. We are only reporting what we heard discussed.

16. In Sub-paragraph 4 of Paragraph 1 of the executive summary to the Transition Panel's Plan for Horse Racing in Ontario there is an unbelievable statement that reads as follows:
"To firmly link the industry with the horseplayer and fan, the Panel now concludes that future public funding for horse racing should be based on a dollar for dollar match with the industry commission on pari-mutuel wagering".

The Panel members seemed to agree with us that after they had just cut our purses in half and reduced our race dates by fifty per cent that our future public funding could also be reduced by another fifty percent! It is axiomatic that with fewer opportunities available for patrons to wager overall wagering must surely decline.

WITH PURSES AND RACEDATES REDUCED BY 50% HOW ON EARTH WILL INDUSTRY COMMISSIONS ON PARI-MUTUEL WAGERING POSSIBLY INCREASE? EVEN THE PANEL MEMBERS COULD NOT EXPLAIN THIS TO US.

17. In 2012, Thoroughbred, Standardbred and Quarterhorse racing deservedly received their 10% share of slot revenues earned in Ontario which horsemen and breeders had negotiated with the Government of Ontario at arm's length at the time of inception of SARP (in return for their consent to the introduction of slots in their facilities in 1998.) In 2012 this amounted to 172.5 million dollars. It is pure fantasy to try to reduce this to 60 million dollars as recommended by this three-man transition panel on its own.

18. On an equally important point the members of the Panel abjectly failed to properly explain the relevance of the Ontario pari-mutuel tax reduction passed in 1996, seventeen long years ago. The members of the panel continued to claim with great persistence that in calculating the Ontario Government's annual cash contribution to purses (and that is what the horses actually race for in order to enable bills to be paid) we must add in this unrelated 50 million dollars for this pari-mutuel tax reduction. This is an attempt by the Panel at double counting. To count this $50 million again as funding for future purse distributions is completely illusory. Dr. Ted Clarke of Grand River Raceway has already provided the Panel with a seven page memorandum fully explaining that this tax reduction has already been returned to the customer.

19. We explained to the Panel that our horsemen and breeders are still very disappointed that after McGuinty and Duncan precipitately cancelled SARP without conducting any studies (save subsequent to the cancellation order being issued) that the Government then proceeded to male new monetary deals only with racetrack operators and totally ignored the horsemen and breeders completely. We are therefore left with a situation where the operator of Kawartha Downs is now receiving millions of dollars each year in rent for a white elephant property while horsemen race there for purses as low as $3,200! The Government has left horsemen with no leverage in their quest for fair and equitable purses and race dates.

20. The Panel was unable to discuss with us the proposed expulsion of standardbreds from Woodbine Racetrack due to time constraints. However, we fully support the official statement made by Woodbine's President Nick Eaves unconditionally opposing this strange recommendation by the Transition Panel. Standardbred racing has always prospered in Metropolitan Toronto since the days at Greenwood Raceway ( Old Woodbine) and financially it is the most important and essential component of our business. To have any chance of surviving the current situation created by our Government standardbred racing must retain all of its pre-2013 racing dates on Woodbine's mile track with its appeal to the wagering public.

August 11, 2013

Robert Burgess
Robert Fellows

Tags
Have something to say about this? Log in or create an account to post a comment.