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

AND IN THE MATTER OF THE APPLICATION FOR

LIVE AND INTERTRACK 2005 RACE DATES PICOV DOWNS RACETRACK

On January 28, 2005, Chair Lynda Tanaka, and Commissioners George Kelly and Brenda Walker convened to hear the race date application from Picov Downs Inc. for Picov Downs Racetrack 2005 racing season.

Executive Director John Blakney, Legal Counsel Tim Snell and Manager of Information Services Wendy Hoogeveen appeared for the Administration.

The Ontario Racing Commission, after hearing and reviewing the submissions from the applicant, the Administration and the Quarter Racing Owners of Ontario Inc., unanimously approved the following:

Live Standardbred Race Dates

Picov Downs Racetrack 20

Including all post times as applied for

Intertrack Dates

Picov Downs Racetrack 20

Backstretch Improvement Plans

SUBJECT TO AND CONTINGENT ON the following conditions that

1. that Picov Downs Inc. provide to the Commission by June 1, 2005 its detailed plans of the backstretch and racing facilities with timelines for removal of the existing facilities, and construction and completion of the new, to allow the appropriate oversight and approval by the Commission; and
2. that the facilities for racing are appropriate for the Commission staff who supervise the races and for the horses stabled on site or trucked in for racing to the satisfaction of the Administration.

Dated at Toronto this 1^st^ day of February, 2005.

BY ORDER OF THE COMMISSION

John L. Blakney

Executive Director

REASONS FOR DECISION

Picov Downs Inc. has applied for approval for the holding of 20 days of live quarter horse racing for 2005 and for intertrack dates. By Notice to the Industry dated October 22, 2004, the Commission directed that the application be deferred. The Board directed that the application be adjourned to a hearing date to be set for a date early in 2005 for a determination of the application in the context of the anticipated approval of slots for this track. Notice of the hearing held on January 28, 2005, was given to the track and the industry with directions for the filing of material with the Commission for consideration by the panel.

Picov Downs has signed the site holder’s agreement with the Ontario Lottery and Gaming Corporation and has a signed agreement with its horsemen, who were represented by Mr. Joe Tavares here. Copies of those documents have now been provided to the Administration. Much of the uncertainty as to the future of this track and the slot facility last fall is therefore now resolved. Mr. Tavares indicated that up to January 10, 2005, they did not have an agreement but they do now.

The Administration, as directed by the Commission, had provided to the track a statement of its position on the application, indicating its preference that the new track facility be built in tandem with the slot facility in a manner that integrates the two sides of the operation so that there are appropriate linkages between the racing section and the slots section and that it be operational as soon as possible. Since that position was stated, the track has responded and provided copies of the site holder’s agreement and the horsemen’s agreement to the Administration for its review.

Given the recent receipt of the information and the responsibility provided in those documents to the Commission, the Administration now takes the position that the application for the 20 race dates for 2005 can be approved and that in the licensing process the Administration will address its concerns related to the conditions of racing for 2005 prior to the new racing facilities (as opposed to the slot facilities) being ready for use. It takes the position without prejudice to its right to impose through licence conditions the appropriate controls and terms to protect the public interest. In the event that the track objects to any such licence terms and conditions, it may appeal to the Commission. The track does not oppose the position of the Administration in this regard.

The Commission is concerned that the application represents a significant drop in dates (from 30 to 20) from 2004 to 2005. The track indicates that it will race 30 days in 2006 and 35 to 40 days in 2007. In 2005 the racing will start on Sunday May 15 and continue on Sundays until September 25.

We were provided with a copy of a plan showing the proposed construction on the east side of the property which will hold the slots facility, the grandstand with restaurant and similar “front side” facilities for the fans including the paddock, but no details are available with respect to the backstretch facilities. Picov Downs explained that it has not applied for site plan approval of these facilities, which will be on the west side of the property, to avoid a substantial payment to the municipality. Also it cites the staging required to build the new track where the existing stabling now exists. The track blames its lack of specificity in timing and other relevant matters on its inability to say what the revenue from the slots will be and when that revenue will start to flow.

The horses that race at Picov Downs are, for the most part, stabled on site. We are told time (as in years) is needed to allow the industry to create off site stabling locations. We were, however, given the names of industry participants who, in total, presently have stabling in excess of the 90 places required for the horses stabled on Picov Downs’ property and there is apparently additional stabling to the west, which is large enough to accommodate that number. We are told that in order to support a move to the new stabling areas that will be developed, the horsemen need the increase in purses that will come once the slot facility is open and operating. We are also told that a Phase 2 environmental assessment is currently underway with respect to the backstretch facilities.

Despite the assurances given by Picov Downs, we remain concerned that the construction of new backstretch facilities and the new track will lag behind the slots facility. No plans have been provided to the Administration with respect to the design of the facilities and the provision for suitable accommodation for the regulatory agencies. While the track may not wish to trigger the process of the municipality’s approval of the backstretch works, the track should be communicating with the Administration to settle the regulatory requirements and the details of the plans for the facility.

We therefore direct that the track provide to the Commission by June 1, 2005 its detailed plans of the backstretch and racing facilities with timelines for removal of the existing facilities, and construction and completion of the new, to allow the appropriate oversight and approval by the Commission.

We are not satisfied that the horsemen and Picov Downs have exhausted all the options to provide stabling for the horses in the event of demolition of the existing stabling, and we urge them to pursue the options further so as to move forward the date for completion of the new track facility. We note that the limited number of dates, starting in mid May and ending before the end of September, leave substantial portions of the construction season of 2005 available for construction without the need to disturb the live racing.

In our view the concerns of the Administration that the racetrack facilities are lagging too far behind the slots facilities and that there is a real potential that the existing facilities will be left in place for too long are well founded. We are concerned about the absence of fixed time lines and plans for the future of this facility and for the quarter horse racing industry as a whole.

We are also concerned that the existing facilities, even without the contrast to a new slot facility, lag far behind the expectations of an urban market place and that without investment in them in the next two years, they will deteriorate further.

As in the case of Quinte, we are requiring the Administration to ensure that the facilities for racing for 2005 are appropriate for the ORC staff who supervise the races and for the horses stabled on site or trucked in for racing.

The parties indicate that the Commission is, by the site holder’s agreement, empowered to take on a considerable role in the development of the quarter horse industry and live racing in Ontario. This panel expects that the Administration may make recommendations to the Governing Board of the Commission with respect to the appropriate exercise of the power given to the Commission under the agreement and the process that should be followed in this regard.

DATED this 1^st^ day of February, 2005.

Lynda Tanaka

Chair