December 19, 2006

Notice to the Industry

From: Rod Seiling

Chair

Re 2007 LIVE AND INTERTRACK RACE DATES APPLICATIONS

FOR FLAMBORO DOWNS AND WINDSOR RACEWAY

Flamboro Downs Great Canadian Gaming

The new application dated December 7, 2006 was reviewed by the Commission at its meeting of December 15, 2006. The Commission had hoped that subsequent to its ruling of November 28, 2006 which did approve the requested post time but did not approve the “substantial” reduction in live race dates from 258 to 208 as requested by the track owner, Great Canadian Gaming, that the OHHA and Flamboro Downs could have reached an agreement as to the number of live race dates for 2007. This did not occur.

Therefore the Commission was left with the question of determining the optimal level of live race dates for Flamboro Downs that are in the best interests of the public and for the business of horse racing.

The Commission reviewed the information supplied by both Flamboro Downs and the OHHA with respect to the new December 7, 2006 race date application. Upon this review and a further review of the information supplied to it with respect to the November 13, 2006 Flamboro Downs race date public hearing, the Commission was of the view that there was not any new material information provided to it related to the issues.

Therefore, it was the opinion of the Commission that another public hearing would not be required.

The Commission continues to be of the opinion that it is not in the public interest nor in the best interests of the horse racing industry to approve the substantial decrease in live race dates as Flamboro Downs has been seeking in the original application. It does, however, recognize the large decreases in business the track has experienced on its live and simulcast products and that a corrective response is required.

The track and its horse-people need to develop a willingness to work together for the best interests of the public and the horse racing industry. What are the appropriate responses and how to implement them are, in the view of the Commission, best addressed by utilizing the considerable talents available in that market. The appropriate number of live race dates is an obvious starting point.

There are numerous challenges facing the horse racing industry today. Some of these challenges the industry has no control over, but others it does. The Commission urges the industry to focus their considerable energy and business acumen on how best to identify and successfully implement the winning strategies that will turn these challenges into opportunities.

Both sides come to the issue of the appropriate level of live race dates from a different economic perspective as noted in the November 28, 2006 decision. However, they both have a mutual economic interest. More wagering customers at Flamboro Downs live racing and more customers wagering on Flamboro Downs simulcasting, full fields of horses in a race, larger purses, are all inter-related to the economic success of both the racetrack, the horse-people and the industry in general.

The Commission is disappointed that the operators of Flamboro Downs, Great Canadian Gaming have not provided material evidence as to how it plans to implement “winning” strategies to reverse the declines in its live racing and simulcasting product other than a post time change. Controlling the amount of product in the market and reducing costs via reduced live race dates alone is not the answer in the view of the Commission although they may be a part of it.

The Commission is also disappointed in the OHHA with its insistence to the need to race the same number of live race dates in 2007 as 2006.

There also exist opinions of knowledgeable observers of the horse racing industry “that there is too much racing”. The question before the Commission and for the industry by extension is what is the optimal number of live race dates that the current economic model can support?

The Commission had before it an application from Flamboro Downs for 220 live race dates and 364 simulcast days, an increase of 12 live race dates from its previous application.

The OHHA continued with its previous position that Flamboro Downs should be required to operate 258 live race days, the same as it did in 2006.

The Commission also had before it a recommendation from the ORC administration to approve 225 live days of racing and 364 days of simulcasting. The administration was of the view that an increase of 5 days in August was warranted and that with the 2 year olds then racing horse supply would not be an issue at that time.

After carefully considering all the matters provided to it, the Commission accepted the recommendation of the administration and approves 225 live days of racing and 364 days of simulcasting for Flamboro Downs for 2007. In making this decision the Commission notes that Flamboro Downs will continue to host more days of standardbred racing than any other track in the province of Ontario.

Decreasing live race dates is not the panacea in and of itself as previously noted. The Commission is of the view that there may be some merit in the proposed circuit concept Flamboro management has referenced as it relates to Georgian Downs and their respective product offerings.

In approving these 2007 race dates, the Commission directs the ORC administration, as part of its licensing process, to require Flamboro Downs management to provide a detailed strategic marketing plan with the tactics. Further the track will establish benchmarks so that it will be able to report on a regular basis as to the success of the plan with the benchmarks to include but not to be limited to attendance, wagering on live racing and simulcasting, size of purses, and size of fields.

Windsor Raceway Windsor Raceway Inc.

The new race date application dated December 14, 2006 was considered by the Commission at its meeting of December 15, 2006. The Commission had preferred that subsequent to its ruling dated November 28, 2006 that Windsor Raceway and the OHHA would have been able to reach a consensus as to the optimal number of live race dates for the Windsor market.

The Commission reviewed the material supplied to it in the new December 14, 2006 application as well as the information contained in its previous application that was turned down by it. It also reviewed the response received from the OHHA dated December 15, 2006, the response from the OHHA legal counsel, Mr. Arlen Sternberg dated December 15, 2006 plus the information on file from them plus other horse-people from the October 26, 2006 public hearing.

After review, the Commission was in full agreement with Mr. Sternberg’s comment contained in his email that “If Windsor is trying to forward some new evidence (which it does not appear it is) then the hearing should be reconvened so that OHHA (and anyone else) can have a fair opportunity to respond and be heard”. Since Windsor did not bring forward new information the Commission was of the opinion that the new Windsor Raceway 2007 race date application did not contain any new material evidence, a public hearing would not be required.

The horse racing industry continues to operate in an ever-increasing competitive market. Some of the competitive aspects the industry has no control over but there are others that it does and it is in these areas the industry must focus its collective good will to identify solutions and implement them.

Identifying the optimum level of live race dates by those operating in the market and most familiar with the situation should, in the view of the Commission be a good starting point. With a mutuality of interest of doing what is best for the public and for the industry, it seems both sides should be able to find consensus.

The Commission continues to be of the view that just reducing live race dates is not the sole solution to the turnaround for Windsor Raceway. It recognizes the significant negative impacts that the raceway has had to deal with such as border issues, non-smoking legislation, and competition in an ever-increasingly crowded market for customers in the gaming field to name just some.