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Burgess Letter On Consultations

Published: August 13, 2013 1:12 pm ET

Last Comment: August 15, 2013 10:48 am ET | 14 Comment(s) | Jump to Comments

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.


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

August 15, 2013 - 10:48 amMr. Yamakva, I agree that we

Greg Perry SAID...

Mr. Yamakva, I agree that we have to improve wagering in any way possible or our future is bleak, however any business that has its revenues and opportunities cut in half in a snap of a finger is not going forward any time soon. As far as drivers ,trainers & owners in our business making too much money, you are way off base. Many of the "successful" people in our business such as Mr. Burgess have made incredible investments in hundreds of horses to get lucky with the five you mentioned. I would venture to say when the accounting was done there wouldn't be as much left over as people would think. The Burgess family are obviously looking to make money with their horses but they continue on for their love of our sport. On years when they don't have a top horse the "money churn" they invest back in the business keeps feed stores, blacksmiths, tack shops, grooms ,assistant trainers, truck dealerships, gas stations, farmers and other local businesses afloat. I don't know you, but I do know Blair Burgess and if you could keep up to him for a week doing what he does then maybe you could comment on how over paid he is.

August 15, 2013 - 8:19 amHorsemen have been "talking"

Don Patrick SAID...

Horsemen have been "talking" and penning letters for over a year. When will they finally take some action? I have to believe that had this situation taken place in New York or New Jersey, there would have been some deliberate actions taken by people.

It would have been great to see the racetracks refuse rental agreements, and lock out the OLG. When the 1.1 BILLION dollars stopped flowing to the OLG, things may have been different. However racetracks were willing to take something rather than nothing, and did little to resist the governments' betrayal. Horsemen are unfortunately following the same path.

August 14, 2013 - 3:54 pmHow are you going to raise

Will Boggs SAID...

How are you going to raise the handle if you don't accept wagers from Newfoundland? I'm left with no option but to bet offshore, if I want to wager.

August 14, 2013 - 12:13 pmMr. Burgess' letter is a good

Mr. Burgess' letter is a good beginning to a discussion that should have taken place since the Ontario government's ill advised decision in March 2012.
That decision was supposedly made on the basis of advice received from "informed" individuals but to anyone who had bothered to read that advice it would have become clear that the arguments used to support the cancellation of the slots agreement were flimsy at best.( The "positive" state of the horse racing industry in Quebec was held out as an example to support the government's action!). Surprisingly nobody bothered to bring this to the public's attention. Rather than demand that the Government account for its actions and provide a clear explanation for why it was doing what it was or for producing an analysis of how it was going to deal with the mass reduction in jobs, the horse racing industry allowed ministers such as Mr. Duncan to obfuscate and make statements such as the one about foreign owners coming into Ontario to take away "our taxpayers' money" ( and this while the very same government was spending millions on ads trying to entice foreign investors to come to Ontario!). Truth be told, the Government took advantage of an industry in disarray,without an organization that could speak on its behalf and negotiate a way out of the mess they had created.
The result was this "transition panel" one of whose members repeatedly used the mantra that " the industry has got to get smaller for it to get bigger". The outcome of its deliberations was preordained and the initial report confirmed most people's worst fears.
How can a plan for the future of an entire industry be taken seriously when the panel had never considered the number of jobs affected by the government's actions? ( The excuse that there are no data available on the number of jobs affected is bunk. One only has to start with the number of people whose ORC licenses are current i.e. for trainers, grooms and vets and then estimate the other, related jobs that would be affected and the numbers would easily hit into the tens of thousands) How can it be taken seriously when there was no discussion of the effects on owners of the reduction in race dates and purses? If needed I can provide mathematical proof that the owner of an average OSS Grassroots horse cannot possibly make money or breakeven under the present circumstances. Without owners willing to take the risks inherent in ownership there will be no horses sold by breeders, there will be no horses to train and to take care off.There will be no need for trainers, grooms , vets, feed providers etc.
How can it be taken seriously when there was absolutely no discussion of who would better administer the slots operations than those doing it at present? Has the panel actually looked at the financial statements of the casino operators which are mostly US based, public companies? Had it done so, it would have seen that a 25% rental fee would never be acceptable to them not only because they could not exist but because they could not possibly allow the new Canadian operations to damage their existing financial ratios. Can the OLG provide numbers that would refute these conclusions?
How can it be taken seriously when there were few ,if any specific recommendations on how to improve the industry. What we have got is a whitewash and a slew of platitudes with a total disregard of reality.
Mr. Burgess suggests that the slots program be reinstated, the industry be brought back to its pre2012 state and that a true transition period be established , a period during which a reasonable plan for the future of the industry can be developed. This is the only reasonable action that the Government can take. Failing this, Ontario can kiss the horse racing industry good-bye and witness the slaughter of thousands of foals which will be born in 2014 without anyone interested in owning them. A mess of major proportions has been created by the politicians and only they can clean it up but TIME IS OF THE ESSENCE as the fall auctions are almost upon us. But then so is a Provincial election in which all affected can show their displeasure. It is time to wake up and use the leverage that the thousands whose lives are being toyed with have at their finger tips.

August 13, 2013 - 11:12 pmIf Kathleen Wynne is serious

Randy Young SAID...

If Kathleen Wynne is serious about securing the long term stability of Ontario Horse Racing, she should immediately rescind the cancellation of SARP ... at least until the viability of the OLG's new strategy of creating numerous privately run Casinos can be re-evaluated. At the same time, the current panel should be replaced by people she can trust ... along with at least 3 representatives from the Horse Racing Industry who could help them sort out and fix the mess that was caused by the irresponsible actions of the McGuinty government.

August 13, 2013 - 10:20 pmGreat job Bob, unfortunately

Greg Perry SAID...

Great job Bob, unfortunately I think your letters have to get to the Premier and she has to be made aware that your version is the reality not theirs.

If that includes sit-ins and blockades so be it, but these guys are parading around as if they are saving racing when in fact they will be the destroyers.

If in fact the Premier is serious about including us in the gaming future she must be made aware that the panels proposals have no hope of helping. I would hope all horsemen & women will rally around your letters and get the ball moving before its too late.

August 13, 2013 - 8:51 pmMr. Burgess, thank you for

Mr. Burgess, thank you for your efforts and this synopsis. What do you think are the chances of this reaching Premier Wynne's desk?

August 13, 2013 - 6:44 pmWe finally get the true

We finally get the true feelings of horsemen made public in one document. I think it is now time to have our legal advisers prepare to take legal action. At the same time I think we go ahead with boycotting slot parlours and trailer action on 401. First we need to get this information as it stands here into Toronto newspapers.

August 13, 2013 - 6:29 pmPass it on to media contacts,

Lynne Magee SAID...

Pass it on to media contacts, internet groups, friends, etc. Get the story out to more than our industry circle. From what I hear, the public is starting to think that the Liberals have made amends to horse racing.

August 13, 2013 - 3:15 pmThanks to Mr. Burgess and Mr.

Dave Hudson SAID...

Thanks to Mr. Burgess and Mr. Fellows for their time and effort in stating the true feelings of those in the industry. Unfortunately there is no incentive for the three panel members to do anything about it. They are collecting salaries with nothing invested in this business nor do they understand it. This was obvious in the "set agendas" at each of the sites they visited.
I hope Mr. Burgess and Mr. Fellows will get this letter to both Premier Wynne and Mr. Sousa along with a face to face meeting. It is necessary and only fair that Premier Wynne listens to those who are in the business. Why is the SARP program being copied in the states?
The negative impact on the province is obviously beyond the comprehension of Mr. Snobelen, Mr. Wilkinson, and Mr. Buchanan. They simply do not want to hear anything that is not part of their agenda. Why would they not want Mr. Burgess or Mr. Fellows as part of their team to come up with something that works for all?
In the London meeting, Mr. Snobelen spoke of all the discussions and input the panel had with those in the industry-----really? It would be nice of him to share those names. This is simply either not true or they did not listen.

Dave Hudson (horse racing investor)

August 13, 2013 - 2:39 pmAfter carefull reading the

Peggy Powell SAID...

After carefull reading the results of Mr. Burgess's meeting with (our)transition panel I find myself even more discouraged then ever before and I didn't think that it was possible to be more discouraged. To see it in black and white that this panel does not care about destruction that the government has caused our industry is almost inconceivable. If they understand the situation fully , which thanks to Mr. Burgess they do, and they still come to the same conclusion that they have , it shows me that they were and still are under the direct influence of the Liberal Government. I guess the old saying still rings true. Never get into bed with the Devil. They sold their soles long ago and now their selling ours and frankly Scarlet "They don't give a dam.

August 13, 2013 - 2:23 pm"Without realistic purse

Will Yamakva SAID...

"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."

Ok... I bought 7 houses, and 3 cars, and need slot money to maintain my lifestyle. Look at all the taxes that the government will lose if I cant maintain the houses.

Perhaps you are going to need to realize the sport does not generate anywhere near the money it takes to sustain it.

Mr Burgess....

you just had a gentleman named Jody Jameson reach a purse milestone that the average bettor wishes he gets near. Even after he only gets his percentage..... that is A LOT of money. The rest that went to people that own them horses..... is still a lot of money. Lots of people are suffering, and reality is.... if the business they are in, does not generate the money it takes to sustain itself, then either the industry needs to downsize or people need to figure out a way.

You can write all these letters till your fingers bleed, but you cant possibly suggest that, on a day where they gave away over $100k in purses, but only took in $45k, Hanover is a huge success.

What I do not understand, if your bills are higher than your expenses and you want someone to come aid you.... why do you expect the racetracks and government to fix the solution? Why is the horse industry different?

I would understand if you showed revenues have increased and there was a sign you are turning the ship around, but that isnt the case. The product is not better now, than it was 14 years ago. IN fact... to show you how things are.... look at your win4 pool on Monday at Mohawk.... the track had to kick in money because it did not clear the $75k mark. The runners are carrying their weight.

Its funny that you want to compare yourself to the runners, but look at them... they have 2 tracks, and race FAR less. That industry isnt singing the blues like you are.

I am going to get a lot of flack for this, but Mr Burgess.... with all due respect, you really need to look at this business, NOT as a horseman, and you cant possibly make a legit argument that this is a sound investment. Harness racing is essentially a lottery that only horse owners are allowed to win big in.

Mr Burgess...

This is what it said on the site when you got into the hall of fame...

"Robert Burgess, of Campbellville, Ontario, has been involved in harness racing for over 40 years and has experienced tremendous success as a breeder and owner. He’s also held many volunteer leadership positions within the industry including being the past president of the Canadian Standardbred Horse Society. Burgess co-founded Cantario Farms in the mid 1970s, which would become home to the great trotting sire Balanced Image. Burgess has co-owned champion horses Amity Chef, a winner of $1.3 million, Frugal Gourmet, a winner of $1.3 million, Real Desire, a winner of $3.3 million, millionaire Amigo Hall and Tell All, winner of $1.5 million"

earned more with your share of Real Desire... than I have earned my entire life.

The gamblers that supported you and wagered on your horses..... would you want to give some of your slot percentage money to boost our pools? Didnt think so.

This is wrong as can be. "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."

Less dates, will INCREASE handle. Us patrons have 5-6 tracks to wager on at any given time via simulcasting, at which only one or two is from Ontario.... if we had less American B tracks (runners and harness), you would have more people concentrated on your events.

Runners at WDB run one less day a week than normal, as does FE... and what is the result? They are doing better.

August 13, 2013 - 2:09 pmMr. Burgess, thank you for

Georg Leber SAID...

Mr. Burgess, thank you for this update. Thank you to Mr. Fellows as well for providing his tax information.

My offer of $10,000 towards legal fees in a class action suit, still stands. It seems there is no other recourse. The panel claims to represent the government and Wynne and Sousa are hiding behind the panel.

What can we do to help?

Georg Leber-ICR Racing

August 13, 2013 - 2:04 pmWhen this panel branded SARP

Norm Brunet SAID...

When this panel branded SARP a subsidy they pretty well wrote off the industry. Everybody knew that we had far too many tracks and saturated the market but whom allowed so many tracks ? The government issued the licences for 7 new tracks since the inception of SARP.
They put us in this mess due to greed.

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