In Ontario, Canada, each year the industry receives a whopping $345M in some way, shape or form, from slot machines. This money fuels up to 60,000 jobs, and helps put on races like the Queen's Plate, Canadian International, North America Cup, and hundreds of other events. In addition, it supports up to 17 racetracks - big and small. It is one of the largest racing jurisdictions in the World.
Up until last week, things seemed to be humming along. This week, things are different. Ontario's storied horse racing history is in potential peril.
Bizarrely, Ontario currently spends up to $345-million annually to prop up a money-losing horse-racing industry. Or, more to the point, Ontarians prop it up by spending their money at slot machines that were added to racetracks in the late 1990s. At present, 20 per cent of the revenue from those machines is used to keep the horses running; Mr. Duncan strongly hinted that he intends for the province to keep it instead.
Although we have seen the writing on the wall in states like Pennsylvania and Indiana with cuts. This makes those look like chump change. An entire industry could be on its last legs.
The way slot deals were written, and continue to be written in places like New York, were kind of like a McRib sandwich. They sounded good, but in reality were not too appetizing. Opening a cash floodgate without a plan, was, and is, a failure.
We at HANA, and in fact many other industry participants, like the Meadowlands' owner Jeff Gural, feel that slots money is a gift that should be used wisely. It's a lot of money, and putting 100% into purses, and on-site capital improvements (89% of handle comes from off-track), is not a long term sustainable business model.
We think Ontario is illustrating that reality right now.
Things like lower takeout make sense. Things like a slush fund for marketing the sport make sense. Betting exchanges to go after a new demographic make sense. Free data for new patrons makes sense. A betting czar and league office funded with slots make sense.
Cultivating customers so they will be customers for a lifetime - long after slot machines go away - makes sense.
Right now Ontario racing participants may have to fall back on the customer for their livelihood. But there are few left.
The situation is so very sad, because although we are horseplayers, we love this sport - right down to the grooms and trainers and everyone else who works with these lovely animals.
Let's hope other jurisdictions like New York and possibly Kentucky, learn something from this, and begin to build a long-term slot money plan, so it never happens again.
We wish our friends in Ontario the very best.