Setting the Record Straight

I got a call last night from someone I hadn’t heard from in about 25 years. Not only was it unusual to hear from him but the reason for his call was unusual as well: he called to complain about a good news story I wrote a few weeks back.
The story was about the money that was allocated on April 1, 2014 to the Ontario horse racing industry to help them work through an unexpected transition period – one that was neither deserved nor welcome – that began with the cancellation of the Slots At Racetracks Program.
He breeds Standardbred horses; has done for probably close to half a century. The other day he was at a dairy farm where the owner, who dabbles in draft horses, commented that the government had been giving the race horse industry too much money all along, that it was a subsidy to wealthy horse owners anyway, wasn’t it?
No, said my friend, it wasn’t. The Slots at Racetracks Program was never a subsidy. It was a business agreement between the Harris government and the racetrack owners. 
My friend wants to set the record straight and he told me the story.
Up until the 1970’s, horse racing was the only legal gambling in Canada. Then the lotteries came along and people would line up for their tickets. The government realized that they had a cash cow, an easy way to tax people, and it wasn’t long before they decided to try to expand gambling into hotels, restaurants and bars. The problem was, people didn’t want gaming in their communities because of the social problems that it created.
But what if they put gambling at the racetracks? It was a light bulb moment. The public was accustomed to gambling at the tracks, the infrastructure was there…
Horsemen were struggling at that time too, trying to compete with new gambling initiatives and although they realized that the slots at the tracks would cannibalize betting on the horse races, they struck a deal with the Harris government that allowed the tracks and horsemen 20 percent of the take from the slots machines. When municipalities caught wind of the deal, they were given five percent to cover the costs of having these sinful sites in their community.  Instantly 19 municipalities in Ontario got a windfall that allowed them to lower taxes and build community centers. Everyone seemed happy.
Then the axe fell. Premier McGuinty and Finance Minister Dwight Duncan cancelled SARP with no warning, on advice from a dysfunctional Ontario Lottery and Gaming Corporation. No one expected the guillotine that would use the fine print of the Slots at Racetracks program to cancel the business agreement with only one year’s notice. Multiple-year agreements had only just been signed between the government and some of the tracks. The apparent stability going forward, gave breeders the incentive to breed mares whose offspring would not race for 4-5 years after conception. Breeding racehorse stock is a long-term thing.
As my friend described it, the effect has been like when BSE hit the cattle industry and it will take just as long to recover. When he reads the Auditor General’s Report released in April 2014, it almost makes him ill about the lack of planning that went into ruining so many innocent people’s lives.
He says that the horse racing industry has just muddled through since then. The government has left the slots at the tracks because they have nowhere else to put them; the tracks took what they could get to survive. People left the industry in droves while horses and horsemen moved to other jurisdictions where they could make a living.
In the breeding industry though, the survival hasn’t been good. Last year only one-third the number of mares was bred as there had been two years previously.  Many breeders left for good, many downsized.
Is there good news? Several breeders are suing the government right now. They made long-term investments in capital and stock only to have the rug pulled from under them. It would be like a dairy farmer being told that he only has one year left on his quota investment. My friend is one of the plaintiffs, and as a group they feel that the government is not on stable footing with their decision. The Auditor General’s report has given them tremendous fuel to prove that the horse industry got a raw deal.
What he really wanted to tell me was, the public is being misled into thinking all is well in the racehorse business. Premier Wynne continues to spin that they are helping the horse industry, which maybe they are in the GTA, but not out in rural Ontario. Intentionally half sizing an industry that employs a lot of people does not seem to make economic sense and he wanted to let me know that, out there in the trenches, things are still not going smoothly.
 (824 words)
Appeared in the Ontario Farmer, May 13, 2014
©2014 K. Dallimore. All Rights Reserved.