Rideau Carleton Raceway and Hiawatha Horse Park (Re), 2003 CanLII 74640

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

AND IN THE MATTER OF 2004 LIVE AND INTERTRACK RACE DATES

RIDEAU CARLETON RACEWAY AND HIAWATHA HORSE PARK

On October 9, 2003, Chair Lynda Tanaka, Vice-Chair Larry Todd, and Commissioners Patricia Bullock, Bernard Brennan and Brenda Walker convened to hear the applications.

Executive Director Jean Major, Legal Counsel Don Bourgeois and Manager of Information Services Wendy Hoogeveen appeared for the Administration.

The Ontario Racing Commission, after hearing the submissions from the applicants and the parties to the hearings, approved by majority decision, 131 Live Race Dates and 364 Intertrack Dates for Rideau Carleton Raceway for all post times as applied for. The Reasons for the Majority and Dissenting Decisions form part of the Ruling and are attached.

The calendar of Live Dates for Rideau Carleton form an attachment to the ruling and is available upon request.

The application of Hiawatha Horse Park is deferred to be dealt with at a later date in conjunction with the OHHA submission concerning Clinton, Woodstock and Western Fair.

Dated at Toronto this 14th day of November, 2003.

BY ORDER OF THE COMMISSION (original signed by) Don Bourgeois for

Jean Major

Executive Director

REASONS FOR DECISION OF LYNDA TANAKA, CHAIR AND

COMMISSIONERS PATRICIA BULLOCK AND DR. BERNARD BRENNAN

This Commission released an interim decision on the race date applications by the associations on October 17, 2003. In that decision, the Commission deferred the application by Rideau Carleton Raceway Holdings Ltd. until it could read the additional filings made by both OHHA and the association at the time of the hearing and to consider this material together with the oral presentations of the representatives.

OHHA had requested that the application be rejected because it did not provide sufficient race dates for live racing, and specifically did not include racing in January, February and the first two weeks of March.

Having considered all the material and submissions, the application for 131 live race dates and post times on the calendar as attached together with the Off Track Wagering dates at the teletheatres and all Intertrack race dates is approved for the reasons given below.

OHHA’s submission is that the lack of winter racing has a significant economic impact on the horsemen and suppliers of goods and services. It points to increasing race dates overall in Ontario over the period of 2001 to 2003 and draws statistics from specific dates in September and October 2003 showing that there were many more horses entered than were drawn out to run in races at Rideau Carleton. It points to increases in wagering on six other tracks as compared to Rideau Carleton. It also points to a 5% increase in Ontario Racing Industry members between 2001 and 2003 based on Standardbred Canada statistics.

The material also included letters from horsemen and businesses complaining that not racing in the winter hurt the income stream of both horsemen and businesses, and was inconsistent with the basic principle of the slots program (which presently contributes approximately 69% of the purse money) to enhance racing and the racing industry in Ontario. Indeed, the argument is made that not racing in the winter causes an economic impact in that the average purse per race is higher in the shorter season, with the result that horses owned by persons from outside of the region are attracted to Rideau Carleton. When those horses win purses, more money flows out of the region. The extension of the argument is that by racing more often, the average purse will be lower and less attractive for non-area horsemen, thereby increasing racing opportunities for area horsemen.

Looking at the history of race dates, in the period 1992 to 1995, Rideau Carleton raced on average 107 days per year. In the years 1996 to 1999 the track raced fewer than 100 days per year and for three of those years, less than 80 race days per year. Starting in 2000 when the slots opened, the number of race dates jumped up to 118 in 2000, 156 in 2001 and thereafter declined to 141 days in 2002 and 125 (122 actually raced) in 2003. The application before us represents a reversing of that downward trend. Over the history of the track since 1992, it has only raced over 120 days per year in the period 2001 to 2003, and the current application represents a significant increase over 1996 to 1999 when the average annual race dates was 79 per year.

In the past, certain principles have guided the approval of race date applications. The public interest is the paramount concern. The application for race dates is that of the track, and the Commission either accepts or rejects that application, leaving it open for a new application to be made. Race dates are approved but may not, for various reasons, in fact be used, thereby leaving open the opportunity if they are not used for other tracks to apply for those dates and the simulcast opportunities. Winter racing is more costly than summer for the track, and recognizing this cost and the benefit of providing racing opportunities in a specific area was the justification in the past for higher take out by the track. The Commission has encouraged increasing live racing opportunities in the past.

We refer to the 1996 decision of the Commission, TB 1/1996, when an application for increased December thoroughbred race dates was made by Woodbine supported by its horsemen the HBPA and opposed by OHHA. We note that the collective agreement between Woodbine and HBPA provided that HBPA guaranteed any reasonable operating losses due to the extension of dates. The race date application was approved by the majority of the Commission panel, with Commissioner Caputo dissenting.

We have also referred to last year’s race date decision in which the Commission approved, over the objection of OHHA, the application which had 15 fewer live dates and fewer dates than is proposed this year.

Rideau Carleton has had a successful 2003 racing season and its 15 race card has proven to be successful in increasing the wagering handle (estimated at a 17% increase), thereby reversing a trend seen elsewhere at most tracks in Ontario. While the move to a 15 race card on fewer race nights remains controversial, it has been a success for increasing handle, with the resultant positive impacts. The track has also reduced the percentage of purses derived from slot machine revenues, another positive sign.

With respect to OHHA’s submissions, the economic assessment of impact unfortunately included deferred revenue, and lost revenue could not be separately identified. The graph showing the increase in mutuel handle for seven Ontario tracks was skewed by including Georgian Downs in 2001 when it was in fact racing only a partial year because of the move from the old track to the new. If more normalized figures were used, the increase would not have been as pronounced. With respect to the increase in Ontario Racing Industry members, while there was a substantial increase in 2001 to 2002, there was a subsequent decline in 2002 to 2003.

In considering whether to reject the application because it does not include January and February or early March race dates, we note that the graph of monthly per diem handle indicates that the handle is higher in the spring and summer months, and that the September, October, November, and December handles range in 2001 and 2002 between $29,000 (November 2001) and $43,000 (September 2002), as contrasted to the range of $36,000 (May 2001) to over $58,000 (August 2003) in the May to August months.

In the application of Rideau Carleton before us we do not see a “slow but sure dismantling of an industry in growth”. Nor does approval of this application send a negative message or undermine the commitment of this Commission or the government to this sport. We do not see in the OHHA material convincing evidence that winter racing will have a positive economic impact on the track or the handle.

That being said, we have encouraged other associations to investigate increasing live racing opportunities, and we encourage Rideau Carleton to do the same. It is not acceptable to point to the Aylmer track in Quebec, 20 minutes away as an acceptable alternative for winter racing while at the same time refusing to run winter racing here, relying on the winter weather as the reason. The slots program was intended to benefit Ontario racing in all aspects and live race dates are part of the mechanism for allowing the full economic advantages of the slot program to be realized by a broad spectrum of Ontario businesses.

Several of the submissions referred to the partnership of tracks and horsemen. To increase and sustain the handle, the horsemen must enter their horses to create large enough fields consistently. Further, there has to be a recognition that, given the history of race dates at Rideau Carleton, there is no guarantee that increasing race dates or racing in the winter is going to have a positive impact on handle. There are costs incurred by the track if it were to proceed with winter racing and there are risks to be absorbed. The partners should address those risks and challenges in a cooperative manner in the 2004 race date application.