Raise the Hammer

OMAFRA has made it very clear that the end of SARP will put the horse racing industry on a short clock. Specifically, that it "will cease to exist."

http://www.omafra.gov.on.ca/english/about/transition/interimreport08172012.htm#sarp

This was touched on in another thread by Highwater as well.

The estimated impact province-wide is something on the order of 60,000 jobs and 13,000 horses, and the death knell not just for a 37-year-old Flamborough institution but for a heritage industry that dates back to the Victorian era.

To me, this is an object lesson in the OLG's business philosophy, which seems to me considerably less than holistic.

To me, this is an object lesson in the OLG's business philosophy, which seems to me considerably less than holistic.

Understatement of the year.

While it is troubling that the horse racing industry has become so dependent on this particular source of revenue that it cannot exist without it, there should be no more talk of all the jobs that a downtown casino might generate without factoring in the devastating economic and cultural impact of the end of the slots revenue sharing program.

Even the recent phone poll commissioned by the Hamilton Spectator ignored, or at the very least obscured, the Flamboro Downs casino option.

Question 1: Are you in favour of a casino in Hamilton?

Question 2: Would you prefer the casino be located in downtown Hamilton or elsewhere in Hamilton? http://www.thespec.com/news/local/articl...

Perhaps someone from the Hamilton Spectator can explain why the Flamboro Downs casino option was not mentioned in Question 2 of their poll.

Comment edited by RenaissanceWatcher on 2012-11-14 08:30:12

http://www.thespec.com/news/ontario/arti...

Houghton said some of the animals — ranging from 6 months to 17 years old — have connections to the horseracing industry. That has spurred concerns among animal welfare and equine experts of a mounting crisis caused by Ontario’s ailing racetrack industry and a dramatic increase in hay prices this summer.

Honestly, I have no interest in the horse racing industry - it doesn't seem like something the government should be funding, at least not to the extent that it does.

What I am interested is in how it relates to gambling. A rural horse-racing-and-gambling facility allowed the government to make a solid profit off of gambling in tandem with supporting the horse-racing industry. That seemed like a respectable way to make money for the government, and allowed us to have the horse racing industry.

The problem is that obviously the provincial government doesn't see that as enough money, and wants to directly start siphoning it out of our most vulnerable citizens in a form with lower overhead. This seems like the jump from owning a bar to being a crack dealer.

Playing devil's advocate: How did horse racing support itself for so many years before the slots revenue was available to it?

I don't know the history. Was there other government support? Was the scale just so much smaller that it was able to support itself through racing revenue?

While I see racing and casino gambling as part of the same "industry" (gaming), some will argue that the slot machines have effectively provided a subsidy to horse racing. And some will argue that a business that requires a subsidy is not viable on its own (I say that just to make the point - I'm well aware there are so many other areas of the economy that are "subsidized" either formally or informally)

If we're going to look at this from a broader perspective, this issue needs to be discussed.

Comment edited by ScreamingViking on 2012-11-14 12:27:38

Have to take issue with the claim that 3,000 jobs are dependent on Flamboro Downs. At its peak, daily attendance at FD averaged 3,300. Unless one claims that those patrons spent sufficient proportion of their income to fund at least one full-time job for another individual, there's just no way that the supposed impact could have ever been realized. Even considering the multiplier effect on downstream businesses, it's a massive stretch.

So what happens if Flamboro goes by the wayside? Would those 3,300 (actually less) patrons choose to go elsewhere for their horse racing activity ( Mohawk for example, which would improve economies of scale to the business), or decide to spend their money elsewhere in the economy, those jobs would not be lost at all - only shift to other local entertainment or other enterprises.

I think much of the problems the industry is having is due to their previous position being able to monopolize the "gaming" industry in this province. Prior to the introduction of the slots program, horse racing was the only legal gambling avenue. The introduction of casinos changed all that, and the industry was quick to respond, to its credit. The monopoly has now been obliterated, with the introduction of sports betting, slots, e-bingo, as well as proliferation of casinos. So they can say that OLG played a big part in the industry's downfall from where it had been previously.

Given that the demographic who participate in this industry is comparatively well off to begin with, does it make sense to continue subsidizing this business at all? No disrespect to those in the industry, but the tough questions must be asked.

Comment edited by arienc on 2012-11-14 13:05:54

Here is a link to a report titled “The Economic Impacts of Horse Racing and Breeding in Ontario, 2010” submitted to the Ontario Horse Racing Industry Association by Econometric Research Limited in November, 2011: http://www.racingfuture.com/sites/defaul...

The report estimates that about 60,000 people were employed in full-time, part-time or casual jobs in the Ontario horse racing industry in 2010. At the time of the report, there were 17 horseracing tracks in Ontario. This calculates to an average of 3,529 people employed on a full-time, part-time or casual jobs at or in support of each track.

The Horse Racing Industry Transition Panel Report struck by the Ontario government and released on October 23, 2012 estimates that the end of the Slots At Racetracks Program could cause the closure of 11 of the 17 horse race tracks in Ontario, result in a reduction in the provincial GDP in the range of $200 Million to $400 Million and result in a loss of 3,500 to 5,800 jobs in Ontario. http://www.omafra.gov.on.ca/english/abou...

The Ontario government has already terminated the Slots At Racetracks Program funding for three of the seventeen racetracks in April, 2012. Windsor Raceway closed on August 31, 2012. Fort Erie Race Track will close on December 31, 2012. Hiawatha Racetrack in Sarnia will either close in January, 2013 or possibly operate on a seasonal basis.

The OLG Slot At Racetracks Program funding for the remaining tracks, including Flamboro Downs, ends on March 31, 2013. OLG is in the process of negotiating a short term lease with Great Canadian Gaming Company, the owner of Flamboro Downs, to allow whichever casino operator is chosen for Hamilton by OLG to temporarily operate at Flamboro Downs until it builds a permanent new casino elsewhere in Hamilton. Flamboro Downs is therefore on borrowed time unless Great Canadian Gaming Company is chosen by OLG to operate the casino.

Comment edited by RenaissanceWatcher on 2012-11-14 23:57:13

'sorry to burst anyones bubble but thoroughbred horses are subsidized at birth by the province.All of those that cannot be whipped into running fast enough are killed for pet food even though the subsidy has been paid.When those benifitting from the govt. subsidy say horses will be killed without it,they are killing many more on the way to the track already,but forgot to mention that fact.

The whole concept of gambling as an economic driver is so perverse that I have to wonder what drugs all the supporters are on. Unless you build a huge debaucherous adult "pleasure" destination (like Vegas) and attract suckers from across the continent, it is simply not an economic driver. Every dollar "earned" by a local cåsino most likely already cost society $2 to produce and will cost even more after the fact. It is an economic sink hole that just moves money around, with lots of people pinching their share off the top each time it changes hands.

Oh and as a side "bonus" it makes one or two people rich while destroying the lives of hundreds or thousands of others.

If this is the average Hamiltonian's idea of "job creation" then this city is in more trouble than I thought. Please stop the ride, I'd like to throw up.

Let vegas keep the casinos.

The other issue that hasn't been much discussed along the way is area rating.

As of 2007, Flamborough homeowners got a discount of 0.068% on their property tax bills because of slot revenues at Flamboro Downs. On a house assessed at $300,000, that works out to $204 per year.

If Flamboro Downs closes and the casino moves downtown, Ward 15 taxpayers are going to mutiny over the end of that area rating subsidy.

Will the area rating subsidy follow the casino to Ward 2? Somehow I doubt it. Another reason to oppose a downtown casino, as if there weren't already lots of better ones.

Ward 15 taxpayers had the benefit of the subsidy to reduce their taxes from 2001 until 2007 to cover the multi million dollar boondoggle called Borers Creek debt, when it was eventually paid off 8 years later, the Flamboro Downs subsidy was transfered to the city of Hamilton tax base.

Thanks for highlighting this important side of the casino issue, Councillor Partridge. These salient facts help to answer some of the questions people are asking about a downtown casino, especially Will this create jobs and revenue for the municipality.

I think we're starting to see that even in a best-case scenario, any jobs resultant from a downtown casino will come at the expense of jobs at Flamboro and rural areas tied to the horseracing industry.

So before people start parroting the messages of wealthy developers salivating at the thought of running a casino, we must fully investigate the net benefits of such a plan. Shifting jobs and moving an addictive gaming facility into an area with vulnerable populations is risky, and we should not be rushed in gathering all the facts to determine if it, indeed, is in Hamilton's best interests.

Neither the horse racing industry nor the horse industry in general will cease to exist. The race part will indeed suffer a massive blow but that is not necessarily a bad thing. The automobile dealt the horse business a much harder blow and it survived. People just are not going to the horse races and that proves we have too many races. In a democratic country like ours some businesses are destroyed as society changes and moves on. I feel bad for the people affected in a negative way just like I feel bad for the guys who lost their jobs when P&G left town. The government should not be propping up industries that are failing and have no future.

Michael Borelli's RTH article has been printed in today's Hamilton Spectator under the title "Pitch for Hamilton casino is monorail hucksterism": http://www.thespec.com/opinion/columns/a...

Also in today's Hamilton Spectator is an article by Andrew Dreschel titled "Casino bidders to reveal plans". Dreschel makes no mention of Flamboro Downs in his article. http://www.thespec.com/opinion/columns/a...

It seems clear by this quote that City of Hamilton Director of Economic Development and Planning Tim McCabe is pushing for a downtown casino:

"I'm not interested for the City of Hamilton in a stand-alone casino. It's got to be something that fits the bill in terms of downtown revitalization, mixed use, good city-building, good design.

Something that's going to help our tourism industry or guests to fill the hotels up."

Dreschel's article does not mention Flamboro Downs at all. He forgot to ask McCabe about his plans to alleviate the economic impact of the contraction or possible collapse of the local horse race industry if a downtown casino opens and Flamboro Downs closes.

Dreschel article is also silent on McCabe's views as to whether a downtown casino would have a positive or negative economic impact upon downtown residential development or existing small downtown businesses.

Comment edited by RenaissanceWatcher on 2012-11-16 08:51:15

One thing we should also factor in re: local horse industry - it doesn't just serve Flamboro Downs. So if that track were to close, it will probably have an impact, but whether the entire local horse industry collapses will depend more on what happens provincially. It may not be easy to determine which change will have the largest effect.

McCabe's statement about not wanting a stand-alone casino bodes well. But I have to wonder just how much influence the city will have in the end, given that they won't be the ones selecting the winning bidder. They can put all the conditions they want on the form of the development, but I would think they would be easily challenged by the developer, or exist as "futures" that may or may not be built once the casino itself is up and running.

at least if the horse racing industry loses its provincial subsidy perhaps actual farmers will be able to afford land in flamborough. raising race horses has about as much to do with agriculture as building race cars does.

I think throwing in the horse racing just muddying the casino issue. The target is no casino. period.

Regarding McCabe's comments ... well wheres the track record of good development (good city development/good design)?

We need jobs and industry that are about building, growing or inventing not entertainment. That is where government should be creating and stimulating activity. They should not be involved in gambling-based entertainment other than to tax the hell out of it. Private sector can invest in entertainment, which should never receive tax dollars.

In the end I think its irrelevant in some ways that this is a casino project. It could have been any mega-project and I would argue there is a complete lack of skill, desire and aptitude at City Hall (staff/council) to achieve much more than getting dressed in the morning.

You can bet, no pun intended, that anything OLG's Paul Godfrey (former President, Ontario PC's) and Larry Tanenbaum (currently buying up bingo licenses) are involved in will benefit them more than anyone else including the government and just be another transfer of wealth from the many into the hands of the few.

Horse-racing, whether you like gambling or not, is a labour intensive means of generating revenue for the government while keeping a lot of marginally-employable people in work while supporting a rural economy.

The fundamental problem with the Slots at Racetracks program, instituted by the Harris government, was that it handed money (10% of slot revenue) to racetracks without accountability. That worked well with not-for-profit operations such as Woodbine/Mohawk (WEG) and tracks operated by agricultural societies; they reinvested the money into their operations and the local community. Unfortunately, the for-profit operators like Windsor, Flamboro, Woodstock generally "took the money and ran". If you visit Flamboro Downs you'll see a facility that has simply been let go, while Mohawk provides a "classy" night out in an up-to-date facility.

My feelng is, if the government's going to grant a monopoly license for something like gambling then the profits from that operation should be guaranteed to go back into the community not into the hands of the Larry Tanenbaum's of this world.

Extend the slots at racetrack programs in the not-for-profit tracks for two years while fine-tuning the formula. That will keep people working and keep money in the community.

In the Weekend Reader (Forum) section of the Hamilton Spectator today, there is an opinion piece by Kyle Caldwell titled "Casino centophobia (i.e. fear of new ideas)": http://www.thespec.com/opinion/columns/a...

The opinion piece titled “Casino centophobia” by Kyle Campbell in the Hamilton Spectator on Nov 24/12 has elicited these letters to the editor published in today’s Hamilton Spectator:

“A glittering tax machine, nothing more” by Paul Gauthier http://www.thespec.com/opinion/letters/a...

“Casino article superficial and patronizing” by Syd Hielema http://www.thespec.com/opinion/letters/a...

“Casino article exposed closed minds” by Pat Stevens http://www.thespec.com/opinion/letters/a...