In the Matter of 2004 Live and Intertrack Race Dates, 2003 CanLII 74592

IN THE MATTER OF THE RACING COMMISSION ACT, S.O. 2000, c. 20;

AND IN THE MATTER OF 2004 LIVE AND INTERTRACK RACE DATES

On October 9, 2003, Chair Lynda Tanaka, Vice-Chair Larry Todd, and Commissioners Patricia Bullock, Bernard Brennan and Brenda Walker convened to hear the race date applications but deferred the decision regarding the applications from Western Fair, Hiawatha Horse Park, Clinton Raceway and Woodstock Raceway to allow for written submissions to consider additional race dates.

The Ontario Racing Commission, after reviewing the written submissions from the applicants and the Ontario Harness Horse Association, and from Woodbine Entertainment Group, Flamboro Downs Raceway and Windsor Raceway, approved the following, conditional upon receipt of a revised application for additional live race dates by January 15, 2004:

Live Standardbred Race Dates

Clinton Raceway 17

Hiawatha Horse Park 63

Western Fair Raceway 111

Woodstock Raceway 19

Intertrack Race Dates

Clinton Raceway 364

Hiawatha Horse Park 364

Western Fair Raceway 364

Woodstock Raceway 364

All post times were approved as applied for.

Reasons for Decision will be issued separately at a future date but will form part of this Ruling.

Calendars of the approved Live Dates form an attachment to the ruling. A complete calendar for all tracks is available upon request.

Dated at Toronto this 3^rd day of December, 2003.

BY ORDER OF THE COMMISSION

Jean Major

Executive Director

*NB: The Reasons for Decision dated December 18, 2003 are attached and form part of this Ruling.

REASONS FOR DECISION

At the hearing before the Commission on October 9, 2003, the Commission heard applications for race dates for 2004 for Hiawatha Horse Park, Woodstock Raceway, Clinton Raceway and Western Fair Raceway. OHHA made representations that the Commission should increase the number of race dates at each of the four tracks without notice to the track operators. The Commission in its decision released earlier this fall gave the opportunity to the race track operators, including other tracks than the four specific tracks, to make submissions with respect to the OHHA presentation, both in its written form and as presented by Mr. Walzak on behalf of OHHA at the hearing. The Commission has carefully reviewed the written material of OHHA as well as the submissions of the track operators, and is unanimous in the resolution set out in these reasons.

OHHA requested that the Commission order the four tracks to conduct additional race dates over and above those included in the four applications. Specifically they requested 7 additional days in April for Hiawatha, 3 additional days at Clinton, 11 additional days at Woodstock and 38 additional days at Western Fair. The justification in support of each of the specific dates was included in the written material filed and will not be repeated here. It is important to note that OHHA did not object to the applications for race dates otherwise and on any other grounds than the failure of the tracks to offer sufficient race date opportunities.

Therefore the fire safety plans, the backstretch improvement plans, the customer benefit plans and other components of the applications including the intertrack dates are all approved.

Indeed it is clear from the materials that the first indication that OHHA was unhappy with the race date applications was the presentation to the Commission on October 9. We have earlier expressed our disapproval of this procedure. The result of the procedure followed has been, predictably, a level of hostility and a focusing on that procedure rather than, in some cases, a focusing on the issues raised. We have however been pleased to see the tracks directly affected have provided substantive submissions in response.

In reviewing the request by OHHA we have, as we did in the case of the other tracks, reviewed the history of the track operations over the past 12 years. In the case of Western Fair and Woodstock there were more race dates per year in the period 1992 to 1994 than is the case now, and in both cases the application for 2004 is for the same number of race dates as was approved in 1995. Over the past 11 years Hiawatha’s race dates have ranged from a low of 44 to a high of 78 and it has been declining steadily ever since 2000 when the slots facility opened at the track.

In reviewing the history of each track, we note that in the case of Clinton, its slot facility opened in 2000 and it has increased its race dates from 12 to 17 and has stayed at 17 race days per year since then, except last year when it raced 18 days. It has been successful in increasing the handle. In the case of Western Fair, the track has been closed for improvements this year and new slot facilities have opened. This has meant some difficulty and speculation in terms of assessing what the impact will be on the other southwestern Ontario tracks when Western Fair operates for the full season as it normally would. Others expressed concerns about impact on horse population and purse structure.

Woodstock’s slot operation opened in June 2001 and it has increased its race dates from 16 to 19.

The OHHA submission raises directly the issue of the health of the pari-mutuel market. Its submission is:

“If this proposal to address the race day imbalance in South Western Ontario is derailed because the pari-mutuel market will not support it then the Commission must act to protect and encourage the future of the Ontario horse racing industry.”

Unfortunately, other than increasing race dates, OHHA gave no substantive suggestions on the steps the Commission might take to achieve those goals.

What is clear in both OHHA’s and the tracks’ submissions is that there is a significant level of unhappiness on both sides with the current level of pari-mutuel wagering. The lack of growth in wagering consistently throughout the system means that the tracks who are dependent in part on that source of revenue (and used to be substantially dependant on it) do not have additional revenue from increased wagering to fund the new expectations, physical plant and programs required by the competitive market place, the public, the horsemen and the regulators. The lack of growth also affects the purses available for the horsemen. The slots program was intended to assist both groups. There is no question that the program has considerably increased the purses and therefore the well being of the horsemen. There is, according to OHHA, a large number of horses receiving too few opportunities to race, as opposed to the horse shortage that was a problem in earlier years. Also, the breeding industry has produced excellent Ontario bred product. While the horsemen have clearly benefited from the slots program in a direct way, it is not clear that the racing business of the tracks (as distinct from the slot business) has prospered to the extent required to support more race dates even given the availability of funds from the slots program for the tracks.

The Commission is limited in the jurisdiction it has exercised in the past on race date applications to either approving the applications as presented (with appropriate conditions) or rejecting the application as deficient and giving guidance in its reasons for an amended or new application. It has not rejected applications often.

That being said, we are of the view that the applications for the race dates for these four tracks are deficient in that they have failed to build on the opportunity presented by the slot program to enhance live racing sufficiently. We are mindful of the lateness in the year and the need to finalize plans. There is no disagreement that at least the dates applied for should be granted; the disagreement is whether or not additional dates should be added.

In our view there are opportunities that should be explored with a view to adding dates to the race date calendars and we have determined that we should grant the applications, rather than reject them, but with the condition that by January 15, 2004 each of the four tracks file an amended application adding dates to the calendar.

We are not to be taken to be agreeing with the number of days or the months in the calendar proposed by OHHA. We do not, for instance, believe that the racing season should be extended in months at Clinton or Woodstock, summer tracks at which weather plays an important role and where the market has in the past not responded to race dates after the end of the summer holidays. We appreciate that Clinton raced the additional day this past year in face of Elmira and London shortening their seasons and it is unfortunate that the weather did not co-operate. This does not, however, seem to us to be a sufficient reason to stand pat at 17 race dates.

We believe there are opportunities at Western Fair to expand the number of days. The materials that have been filed with us indicate that the expanded slot facility should generate significant additional purse and track revenues. Further, the materials filed indicate that in May 2003 OHHA supported the proposal by Western Fair to operate 121 days on a trial basis in 2004 and that the daily number of races will remain at current levels. This letter of support was filed with us by Western Fair, as indicative of OHHA’s support for the application for 112 days made by the track, but the letter in fact contemplates 9 more days. If anything, the material indicates that there are in fact more opportunities than are indicated in the application filed. Indeed in his oral presentation on October 9 Mr. Wilding indicated the potential for other dates.

With respect to Hiawatha, we note that it voluntarily increased the number of race dates for 2002 from 63 to 65. We are not satisfied that a continuation of the downward trend is appropriate or that the track has sufficiently reviewed the opportunities that are available, especially when the track operator rejects the opportunity to race live and to be picked up on the Woodbine signal. Live racing is clearly important in the success of the facility but from a pari-mutuel wagering point of view the larger pools offered by being picked up by Woodbine would normally be seen as a significant advantage for any track in attracting increased wagering. The operator chose to leave his application as it was with respect both to the days of the week on which he raced and with respect to declining Woodbine’s offer to take his product on a different day.

It became clear in reviewing all the submissions that there is a willingness on the part of the track operators to address the broader questions raised by the OHHA submission. It is recognized that the issues require considerable study and thought and call for the industry participants to consider a broad range of options. The issue however for the tracks is whether or not the race date hearing is the place for those issues to be raised and in the way that OHHA chose to do it.

We agree with one submission that too often the increased race dates are sought, not because the public wants more racing, but because the horse supply warrants it. We agree that in the long term the focus must be on the broader picture within the industry. We note also that the race date hearings are an imprecise and unwieldy tool to accomplish the appropriate debate and outcome and that there are better forums in which some measure of trust could be re-established and the discussions could occur. We urge the industry as a whole to confront the issue of the lack of growth in the pari-mutuel handle and to build co-operatively a foundation for future growth that benefits all partners in the industry.

On one final note, with respect to Woodstock, the application indicates that some items of the back stretch improvement plans filed for the 2003 application are not yet complete. Those works need to receive priority and the construction of the new paddock facility should be expedited.

DATED this 18^th day of December, 2003.

Lynda Tanaka

Chair