Troubled Times for Ontario's Thoroughbred Industry

(By Avalyn Hunter)

While this year's Fasig-Tipton yearling sale at Saratoga was down somewhat, optimism is still widespread in the 2012 yearling market thanks to solid performances at regional sales. From Minnesota to Florida, average and median prices for young horses have been either holding steady or gaining over 2011 standards. But before concluding that recovery is complete in the Thoroughbred industry, a sobering look needs to be taken north of the border, where Ontario horsemen are providing an unwilling object lesson on just how fragile and unpredictable the Thoroughbred marketplace can be. Ontario horsemen's situation is a warning on how fast a single legislative decision can knock the props out from under a region's breeders and owners.

The issue, of course, is the Slots at Racetracks Program (SARP) for Ontario racing, which was removed by the provincial legislature effective March 31; the removal was upheld by a review panel in findings released August 24. The latter decision has been devastating to Ontario's horsemen, many of whom had their hopes pinned on a reprieve. And no wonder: SARP was funding 64% of purses in the province. For those few owners and breeders with programs capable of competing on the international stage in the sale ring and at the track, the loss of SARP revenue is unwelcome but not insurmountable. But for the smaller owners and breeders whose profitability depended on the generous purse structure at Woodbine--in 2010, the third highest for any state or province in North America after New Jersey and Kentucky--the loss is catastrophic.

Ironically, the inflow of money from SARP has had only modest benefits on the market for Ontario-bred yearlings, as SARP funds were not restricted to or even primarily used for races for Ontario-breds or Ontario breeders' awards. But the inevitable reduction in the Ontario purse structure following the end of SARP is likely to have a backlash at the Canadian Thoroughbred Horse Society's Canadian-bred yearling sale next month at Woodbine. And Ontario breeders are now looking at their mares in foal and their weanlings of this year and wondering if there will be any chance at all to recoup their investments, much less make a profit; some are already deciding that they will be unable to remain in business. In an economy still more fragile than many people acknowledge, even a relatively small reduction in yearling sale prices, coupled with a likely shrinkage in racing opportunities, may well send the Ontario breeding industry into a downward spiral from which it will not soon recover.

 As the industry struggles with primary concerns, secondary effects also are predictable. Loss of value in racing and breeding stock likely will increase the strain on already overburdened rescue and rehoming operations, for example.

To its credit, the provincial government has recognized that Ontario horsemen will need help if the core of Canada's breeding and racing industry is to remain viable, though the review panel noted that the $50 million allocated for the purpose over the next three years is insufficient for the need. But the lesson here for U. S. horsemen is not a critique of Ontario's actions for good or ill; that is between the province's government and its voters. The warning for American owners and breeders is that regional markets depending on slots or other forms of revenue authorized by state governments are equally vulnerable to shifts in politics and can reverse upward trends at any time. Optimism may be in the air, but those who temper it with a healthy dose of caution and an eye on activities in their states' legislatures may be showing the better part of wisdom.

9 Comments

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Terry M.

It is having an even bigger impact on the Standardbred industry. There are many harness tracks, and there are many small breeders and owners who train and drive their own horses at these tracks. They are being hit very hard. There were reports earlier this year of newborn Standardbred foals actually being euthanized because breeders feared there would be no market for them. The Ontario government continues to falsely call this partnership a "subsidy" and to say it will create jobs, when in fact it will result in a huge loss of jobs and income right across Ontario. I can only hope that smarter people will put pressure on Premier McGuinty to change this thoroughly misguided policy.

30 Aug 2012 6:01 PM
Lammtarra's Arc

Those Greedy B@st@rds.....They will cause over 60,000 horse people and suppliers etc to lose their jobs......BRAVO LIBERALS!

30 Aug 2012 7:23 PM
Convene

At least some of the Standardbred tracks will be allowed slots. BOTH thoroughbred tracks (Woodbine and Fort Erie) have been axed. A suspicious mind might wonder why that might be ... However, those of us who follow thoroughbreds have just been pole-axed most effectively and it remains to be seen whether we will have anything to follow in Ontario in the future. Here's hoping the US can sort out its problems, learning from our experiences, or else all our attention will have to focus overseas to places where horses and their human partners still have some value.

31 Aug 2012 10:37 AM
kittybay

So typical of government. They think that the thoroughbred industry is stealing from them, so they cut them off at the knees. The industry in Ontario is worth a couple of billion when you factor in the 50,000-60,000 people employed by the industry spend their money in the province. But now that close to that amount will be out of work, they will end up on welfare and not be spending a dime. How much will all of those welfare payments cost the government? And the loss of provincial tax revenue because all of these people aren't shopping, won't be paying income tax. It's a huge landslide waiting to happen. I'm not sure why they don't just leave the slots program alone, cut the amount from 20% to 15% or maybe even 13% but leave it alone! It's been working great for all concerned for years!

31 Aug 2012 1:23 PM
nu-fan

Two comments:  First, the economy has been hit hard for several years and that, undoubtedly, hurt attendance and, of course, its revenue.  So, why was there so much breeding occuring if there wasn't a big enough market for Standardbreds?  Common sense as well as business sense should have told the breeders to limit  their breeding.  I won't even go into the morality of euthanizing foals!!!!!  Second, any first year business student learns that governments can create laws, relatively, overnight.  So, as Avalyn Hunter stated, it would make racetracks vulnerable to changes are decided by the government and those changes can be made very, very quickly, which may not give racetracks sufficient time to react.  It would be interesting to find out whether many racetracks, associations, etc., have ever really delved into other reasons for the decline in attendance.  The economy? Again, sure, that can account for some of that decline but are there other reasons as well?  Have they ever had focus groups to find out why people do not attend racing as much as they might have in the past?  That's a good start.  Also, are there other ways--not just one way--of increasing attendance and revenue that would not invite governmental attention to the sport?  I often wonder if only "horse people" make these decisions or if they include those from the outside who may have a different perspective.  I don't have the answers to that but I do, sometimes, wonder.

02 Sep 2012 12:12 AM
melanchthon

Terry M - suspicious minds.... hmmm... I too have been wondering why a program that puts 1 billion dollars plus into Ontario's coffers every year is being axed in favour of Casinos which are running in red ink.  None of this makes any sense and I suspect there is another agenda.  Most likely the gangsters at OLG.  Anything attached to McGunity's government is suspect.

02 Sep 2012 8:57 PM
mz

I am too mad and sad to comment.  They don't get it.  They probably never will.

04 Sep 2012 11:40 AM
reg 155

This liberal gov't has made many errors in this province and this is another doozy.

It seems to me that there are few if any local cities that want a casino, and I can not blame them. Casino gambling is just that,GAMBLING.

What can future casino sites look forward too, I think, short term gain and then long term PAIN.

I am grateful to have a fantastic pass time that I can use my mind to try and pick a winner by handicapping the races. This is brain exersize to me and I am sure it has helped me to stay younger longer, not to mention sharper.

Horse racing is part of our world culture and should be respected and supported by our leaders, not only for the sport but for our future, specifically SKILLS (horsemanship).

We as a world have developed many skill sets and I am afraid the collapse of horse racing will have us loosing these skills, that will not be passed on to our young generations, which would be so sad and  unconscionable.

OK I can go on and on but I have to go to work.

In support of horse racing.

05 Sep 2012 8:56 AM
Lammtarra's Arc

Mcguinty and his whole crooked cabinet want the OLG to open their mega casino's downtown and screw out the racing world to do so. His bookies at OLG want to pad their pockets with all the revenue, and not have to share with anyone.  

07 Sep 2012 8:07 PM

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