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Friday, January 25, 2013

Ah, The Devil is in the Details

As we learned today in Harness Racing Update, yesterday's announcement of the two year agreement between the provincial government and WEG regarding racing was not quite what many people (myself included) thought it was.  While the announcement indicated racing would continue with a cut in days, people were led to believe with the exception of the stakes calendar, purses would be what they are racing for in 2013.  

Now word has it the deal the government made with WEG is to make them whole should they lose money operating the race meets.  This payment will be partially through lease agreements for the slots parlors and partially through direct payments.  WEG is guaranteed not to lose money on racing.  This should not be minimized as being insignificant; a track which will lose money with an unclear future can not be expected to remain open.  By ensuring WEG will be made whole, they can and will continue to operate.

Unfortunately, with the exception of the Ontario Sires Stakes for the next three years, the horsemen don't make out as well.  As reported in the original report, horsemen will be expected to race for what they earn via handle; the way it was in the pre-slot days.  This means once purse account surpluses are exhausted, there is a good chance something is going to have to give.  Stakes races will be eliminated or raced for less money and/or overnight purses will need to be adjusted.  Plain and simple, it is going to be a balancing act.  At least on the WEG circuit even if purses are cut they should be sufficient to allow most horsemen make a living, albeit slimmer pickings.

Where Ontario racing is likely going to take a big hit is at the signature and grassroots level.  For many of those tracks, if horsemen are forced to race for what they earn after any purse account surpluses are exhausted, purses at some of the tracks will look like they do in the Maritimes, racing for three digit purses.  That is assuming there is a track to race at.  The non-profit tracks like Western Fair District will likely keep racing as it is their mission to promote agricultural interests but what about tracks such as Flamboro Downs and Georgian Downs owned by Great Canadian Gaming Corporation, for-profit companies?  Do they keep on racing?

Of course the wild card is what happens to handle.  At present wagering levels purses are likely to decline, in some cases dramatically but with the likely contraction (assuming certain tracks toss in the towel) of racetracks, where do those wagering dollars get bet?  Do they stay in the gamblers' pockets or with fewer tracks racing does the money get wagered on track(s) still racing?  Logic dictates a good portion of the money which would have been wagered at one track will be wagered elsewhere.  The question is does the money get bet at a track such as Grand River or does it go across the border or to the thoroughbreds?  

A certain part of where the now 'excess' gambling dollars goes is out of the hands of the racing industry, but it is the responsibility of the industry and regulators to schedule racing to maximize the possibility of those dollars remaining within the province and the breed.  While some fear the tracks will not do anything to increase handle, if the agricultural societies live up to their mission to promote agriculture, they will make an effort to increase wagering; something the Raceway at Western Fair District has been doing for a while.

Make no mistake, once announcements come regarding the negotiations with the 'B' tracks and tracks like Ajax Downs (quarter horse) and Fort Erie (t-breds), horsemen are going to have to make some serious decisions.  American tracks which will looking for horses to race in the spring should start beating the bushes in Canada for there will be horsemen and horses ready to come south. 

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