Government Taking Steps With Racing Resolution

Dennis Mills, Racing Future Inc. stated today in response on the Ontario Horse Racing Industry Transition Panel "We understand that the next 30 days will be the most important month in the history of Ontario horse racing."

In the release, Mills continued by reiterating that "it will be during this time period that the Panel will negotiate new contracts with the racetracks. We hope that the Panel has been given sufficient financial quantum and latitude to negotiate in good faith for without that and support of the racetracks the sport may not survive".

Racing Future recognize that the responsibility of the Panel was a huge one given the stark realities posed by the sudden termination of the Slots at Racetracks Program: the potential loss of 55,000 full and part-time jobs, the issue of equine welfare, and, fundamentally, the devastation that would occur in rural Ontario. From the outset the task of the Panel was challenging and Racing Future applaud their tenacity, openness, and intelligence in determining policy that will assist an industry that has contributed over $14 billion to the Treasury of Ontario since 1998 and is one of Ontario's most important heritage assets.

Although everyone involved in this issue could easily spend time now finger pointing, we at Racing Future believe that we must attempt to focus all of our attention on the deadline of December 1^st, 2012 for all Racetrack negotiations to be completed. It is from this point of view that we celebrate several of the Panel's statements not least of which is that "Ontario's horse racing industry is worth saving. It generates jobs, economic spinoffs and tax revenues. It is a valuable social and cultural asset, with deep roots in Ontario's heritage, and maintains strong links between rural and urban communities." (p 23)

Racing Future has always advocated that the Slots at Racetracks Program was a revenue-sharing partnership and we are pleased to note that the Panel concurs through their statement on page 11: "in the interests of sound public policy OLG should not subsidize racetracks but, equally, racetracks should not subsidize OLG."

As with most sectors of the provincial economy such as the automotive industry, environment, cultural sectors, etc, varying degrees of government support are imperative to survival. Specific to horse racing, the Panel notes that they "could not find a single example of a viable horse racing industry without some form of public support (p.1). Having said this, the Panel goes on to state that the current agreement with Slots at Racetracks Program will conclude on the date originally set forth, March 31^st, 2013, but by December 1^st, 2012 a new agreement will be in place. Moreover, the Panel has stated quite emphatically that the horse racing industry will be supported at least in its transition phase, which has been set at 3 years. The Panel has not stated the quantum of financial support but they have stated, on page 17 of their report, that the Government needs to "allocate funding over the next three years to support implementation of the Sustainable Horse Racing Model."

The following are some additional recommendations of the Panel that Racing Future endorses and supports:

On page 18, the implementation of the Sustainable Horse Racing Model, which sets aside $10 million for marketing, understanding consumer behaviour and enhancing the horse player exercise.

Racing Future also support the recommendations to the government outlined on page 19:

· Explore a new horse racing specific lottery

· Deliver sports book in Ontario through the horse racing industry network.

· Allow Ontario racetracks to offer historical racing products

· Use the new net revenues (with projected total of $100 million per year) to offset future public funding of live racing, grow the racing industry, and enhance government revenues

Historical racing products -- also known as Instant Racing Machines -- will only work where there are no slot machines. Where there are slot machines and Instant Racing Machines in the same location, consumers invariably choose slots. It is important to keep this in mind when considering placement of Instant Racing Machines, which work very well in various locations such as Off Track Betting venues.

As with the pari-mutuel formula we hope that the proposed Racing Secretariat will split the "new revenues" (as outlined above) 50/50 between purses and the racetracks.

Additionally, the Panel has been very explicit on equine welfare and Racing Future support their recommendations to the government on page 21:

· Eliminate public funding of equine performance/breeding research and replace it with public investment through OMAFRA in overall equine health as required.

· Require breeders and owners to develop robust racehorse lifecycle plans.

· Provide funding for foundational lifecycle planning development work through Equine Guelph.

· Develop a therapeutic drug policy designed to enhance the second career options for racehorses.

Racing Future are concerned about the Panel's conclusions regarding promoting Ontario breeding excellence on page 12:

· Review both the Horse Improvement Program (HIP) and the pari-mutuel tax reduction memorandum of understanding to ensure funds make the maximum impact on the quality of Ontario horses and generate the maximum economic benefit.

· Cap the flow of pari-mutuel tax reduction funds into breeding program -- including HIP and the Ontario Sires Stakes -- at $30 million per year.

Racing Future have additional concerns around the purse structure and race days, to be specific...

· the future of Fort Erie racetrack;

· the dramatic reduction in the number of the race dates for Standardbreds; and,

· how the Racing Secretaries can design a racing structure that requires every race to have a field size of ten horses in order to be eligible for purse funds under the new program.

Regarding Fort Erie, we urge the Racing Secretariat to re-consider the number of race dates immediately. Fort Erie must have a minimum 90-day meet, which is the minimum number of race dates required to achieve critical mass. This issue must be addressed by December 1st 2012.

Racing Future are also left asking ourselves many questions: What was the formula or rationale used to reduce the number of Standardbred races by almost 60%? What is the explanation for reducing racing at Fort Erie by 54% while reducing racing at Ajax Downs by only 3%. What is the criteria required for a racetrack to be a member of the proposed alliance? In light of such questions, there needs to be more specificity on how such issues were decided upon.

Racing Future also understand that the Racing Secretariat will have the ability to amend some of their recommendations as they encounter complexities going forward such as the requirement of 10-horse minimum field size. More research will no doubt show that this is not an achievable or sustainable parameter given the unpredictability of the sport.

Having noted these concerns, we are hopeful that the new Racing Secretariat will include the current Panel members and will have Cabinet Authority to make sure these concerns pass the fairness test.

Finally, Racing Future support the Panel's over-arching principals that further investment of public dollars in the industry should be based on clear public-interest principles, namely:

· Accountability

· Transparency

· Renewed focus on the consumer and

· Return of each public dollar invested to government through tax revenues

We believe John Snobelen, Elmer Buchanan and John Wilkinson as well as the Minister of Agriculture, the Hon Ted McMeekin, have worked tirelessly to produce this final report. From the sudden and potentially devastating news of last March, the efforts of the Panel, and of Mr McMeekin who has remained steadfast and determined to consider often divergent viewpoints, should at this point be recognized by everyone involved in horse racing.

The Racing Future team has been an advocate on behalf of horse racing for the past five months. Our advocacy journey started when leaders of the Standardbred Community approached us to help them during this critical period. During our involvement we have been privileged to have partnerships with many supporters including Standardbred Canada, the Canadian Thoroughbred Horse Society, and many others both nationally and internationally. Contributors to our advocacy efforts are listed on the RacingFuture.com website.

In closing, Racing Future will continue to provide support and our services over the next 30 days as the Panel meets its self-imposed deadline of December 1^st, 2012 for the successful completion of new contracts with the racetracks.