Lessons from Ontario - by Eric Mitchell

The tribulations suffered by Ontario's Thoroughbred community offer several lessons for racing throughout the United States...if only political and industry leaders will pay attention.

To say everything is rosy in Ontario would be an exaggeration, but it is fair to say the province is coming out of a political firestorm that cut the Thoroughbred racing and breeding industries off at the knees and appears to be on a healthy trajectory upward.

The turmoil began in 2012 when the provincial government announced it was ending the slots-at-racetrack program, which had been in place since 1998. The Ontario Lottery and Gaming Corp. (OLG) made the decision to "modernize" the gaming industry and correct what a government panel had described as "poor public policy." The effects on the breeding industry were immediate as indicated by the 37% drop in Thoroughbred mares bred in 2013 (down to 901 from 1,357 in 2012). The number of Thoroughbred stallions also dropped from 85 in 2012 to 60 for 2013. Just two years earlier the province had been standing more than 100 stallions and had bred 1,490 mares, according to statistics from The Jockey Club.

Industry leaders responded with an educational assault on Ontario's political leaders, stressing the significantly negative impact a weakened breeding and racing program would have on the province overall. Economic studies throughout the world, and recently reaffirmed by studies in Ontario, equate one job per horse when considering all equestrian sports and disciplines. In Thoroughbred racing the equation carries even more weight, with 1.7 to 2.2 jobs connected to each horse. That meant 30,000-35,000 jobs were at stake.

The learning curve by government officials climbed slower than desired against a backdrop of closing racetracks and farms, but eventually the message got through.

"It has been acknowledged that the decision the government made in 2012 was made without a lot of contemplation of the economic impact of the horse racing industry and without any consultation," said Jim Lawson, chief executive officer for the Woodbine Entertainment Group. "The education was a gradual process and, though we always understood it, the government now understands that blacksmiths and veterinarians provide skilled labor. That those people would have a difficult time finding employment elsewhere. We are now able to work with government as a partner."

As evidence of greater support, the OLG last summer authorized an expansion at Woodbine, near Toronto, that will add table games and up to 5,000 additional slot machines. The additional gaming will be housed in a new facility to be integrated into Woodbine's existing grandstand and casino, which is already generating $650 million in annual slots revenue. The project, valued at between $500 million and $1.5 billion, will be built and run by a third-party gaming company and include an entertainment center supported by restaurants and retail. Armed with a long-term agreement with the OLG and the promise of substantial new revenue within the next couple of years from the expansion, Ontario's Thoroughbred industry has the stability it has so desperately needed for horse owners to make their own long-term investments in mares and stallions, in stables and farms.

"Ontario has lost a lot of manufacturing, as a lot of areas in North America have lost manufacturing and become more of a service economy," Lawson said. "We can create great jobs here through hospitality, food and beverage, real estate, and construction. Now the government appreciates that."

To the political leaders of Illinois, Florida, Pennsylvania, Texas, and West Virginia: Are you paying attention?

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