IN THE MATTER OF THE RACING COMMISSION ACT, S.O. 2000, c.20;
AND IN THE MATTER OF
THE ONTARIO HARNESS HORSE ASSOCIATION APPEAL
The Ontario Harness Horse Association appealed the Executive Director’s decision for the allocation of 2008 race dates for both Dresden Raceway and Windsor Raceway.
The Ontario Racing Commission Panel hearing the matter consisted of Chair Rod Seiling and Commissioners Jane Garthson and Bernard Brennan, D.V.M. The Panel convened on November 19, 2007. Maureen A. Harquail and Wendy Hoogeveen appeared for the Administration, John Walzak appeared for the Ontario Harness Horse Association and Chris Kruba and Pat Soulliere appeared for Dresden Raceway and Windsor Raceway.
Upon reviewing the evidence and on hearing the submissions by Counsel for the Administration, the Ontario Harness Horse Association and Counsel for Dresden Raceway and Windsor Raceway, the Panel dismissed the appeals and upheld the decisions of the Executive Director.
Written reasons attached.
DATED at Toronto this 28^th^ day of November 2007.
BY ORDER OF THE COMMISSION
John L. Blakney
Executive Director
REASONS FOR DECISION
Overview
The Ontario Harness Horse Association (OHHA) filed a Notice of Appeal with the Commission with respect to the Executive Director’s decision for the allocation of 2008 race dates for both Dresden Raceway and Windsor Raceway.
A preliminary hearing on the Commission’s jurisdiction was held before a Panel of the Commission on November 19, 2007. Counsel for the Administration, Maureen Harquail, John Walzak representing OHHA and Chris Kruba representing both Dresden and Windsor all agreed to consolidate the two matters.
Background
Ms. Harquail brought a motion forward that the Commission did not have jurisdiction to hear the appeals on the basis that OHHA did not file its appeal within the 48 hour time period as per the requirement of the rules of standardbred racing as per SB Rule 24.04.
Under Policy Directive No.3-2007 (Exhibit 1, tab 1) dated July 24, 2007, the Executive Director reviews and considers change to race date schedules. A track’s application for race dates is automatically approved for future years if the proposed schedule is for the same number of dates from the previous year. Changes from the previous year will only be considered where an accompanying business case can substantiate the requested change. The Director, in certain situations, may accept from affected parties consideration for a change where the change can be demonstrated to benefit all the industry stakeholders. Once the Director, as part of the annual race date licensing process makes the decision on the approved dates, a notice is sent out to the industry, That notice informs the industry that any affected party can appeal the decision of the Administration directly to the Commission. (Exhibit 1. Tab 1)
The notice to the industry was sent via email to the industry communicating the approved 2008 race dates on November 7, 2007, at 6.27 p.m. (Exhibit 1, tab 11). As per the requirement of Directive No. 3-2007, it contained notice of the right to appeal and set a date of November 19, 2007, at 9:00 a.m. should a hearing be required.
Ms. Harquail argued that as per SB Rule 24.04 the time frame for OHHA to notify the Commission of its intent to appeal the decisions was November 9, 2007, and that the Commission did not receive the OHHA notice via fax until 12:47 p.m. on November 13, 2007, in a letter (Exhibit 1, tab 12) dated November 12, 2007, therefore the Commission has no jurisdiction. It was her contention that OHHA is a sophisticated organization as it relates to the appeal process of the Commission and is well aware of its responsibilities and requirements.
Mr. Walzak agreed with the timing sequence as outlined by the Administration. He testified that he did not see the decision until the next business day, November 8 and that the next business day following the 8^th^ was November 13 given the holiday on the 12^th^. Ms. Harquail agreed that as per the Commission’s Rules of Procedure that the 48-hour time frame would start on November 8^th^ and expire on the 13^th^ at 9:00a.m.
OHHA proposed to enter Exhibit 3, a document book in support of its position. Mr. Kruba objected on the basis that tabs 3 and 4 contained material that was subject to an issue that was coming before the Commission. Mr. Walzak agreed to have those two tabs removed and the document was accepted as Exhibit 3.
It was Mr. Walzak’s contention that the 48-hour rule as per SB Rule No. 24.04 did not apply nor did SB Rule No. 24.01 and that there is no mention of the 48-hour time frame for an appeal in the industry notice. He argued that even if 24.04 applied, the Commission should have provided notice orally to OHHA. He also argued that the 48-hour stipulation for an appeal did not apply as it is not mentioned in Policy Directive No. 3-2007.
Mr. Walzak argued that OHHA did not miss any deadline, that it acted correctly and he cited Exhibit 2, tabs 4 and 6. The former is a letter from OHHA to the Director dated September 27, 2007. This letter claimed that the appropriate number of race days for Dresden should be 28 as per Policy Directive No.3-2007, and that any change to that should have been supported by a business case, open to affected parties for comment and Mr. Walzak contended the suggestion for a hearing, if necessary was, in fact, notice. The latter is a letter dated October 23, 2007, from OHHA’s legal counsel, Mr. Sternberg, related to the May 2007, ruling of the Commission and the makeup of lost race dates due to the strike wherein OHHA asked for an opportunity to make a submission to the Commission if the Administration did not agree as to what was the correct number of race dates at Dresden in 2007. He contended that this letter also signified OHHA’s intention to appeal. Ms. Harquail countered that neither letters were a notice to appeal and that it would be a dangerous precedent for the Panel to allow any notice of appeal to be considered valid prior to a decision being made.
Ms. Wendy Hoogeveen, Director of Industry Support for the Commission, who was assisting Ms. Harquail, confirmed the race date policy (Exhibit 1. tab 5) and that the Administration followed that process.
Mr. Kruba argued that the OHHA appeal mentioned in the letter is not a notice for a public hearing but only the start for the business case process and that is wrong to try and link the Policy Directive to the hearing. He contended that an appeal cannot be filed before a decision is made.
It was Winrac’s position that the Commission has no jurisdiction and should not hear the request from OHHA as it had no appeal before it. He argued that a request for an appeal is not a request for a hearing but testimony was provided that there does not exist any case history at the Commission where the treatment of both is viewed differently. It was his contention that the OHHA notice lacked any reasons for an appeal, that OHHA had not provided any business case as required and that as a result, Winrac was prejudiced as it related to the appeals for both Dresden and Windsor.
Mr. Kruba referred to a Supreme Court of Ontario, Court of Appeal decision, Frey v. Macdonald where there was an application for a time extension. OHHA missed the time limit to appeal and the decision, he contended, supported his position not to grant a time extension.
Issue
- Does the Panel have the jurisdiction to hear the appeals for the allocated 2008 race dates for both Dresden Raceway and Windsor Raceway?
Decision
- The Panel provided an oral decision that it did have the jurisdiction to hear both appeals with written reasons to follow.
Reasons for Decision
The Panel agreed to hear both the Dresden Raceway and Windsor Raceway appeals from OHHA because as Policy Directive No. 3-2007 institutes a new race date allocation process, it was incumbent on the Panel to ensure transparency in this new method of race date allocation and to set the record straight for the future.
Technically OHHA did miss the time frame for filing its notice of appeal but for the reasons noted above the Panel agreed to hear it. In future, with this method of race date allocation now through a hearing, the industry will be well aware of the process as it relates to filing a notice for a request for a hearing and that SB Rule No. 24.04 applies for the time limit for filing that notice.
The format that OHHA utilized is sufficient. A public hearing as envisioned under Policy Directive No. 3-2007 is not a “de novo” hearing in the normal undertakings of the Commission although the Panel will be hearing the arguments for the first time. It is expected that in providing their business cases and rationales for their respective cases, the parties will already have filed the documentation with the administration in support of those positions.
OHHA is a sophisticated organization that has a long history of working with and being knowledgeable regarding the appeal process and in the course of those activities, employing experts including legal counsel who have provided it with valuable insight and advice.
Signifying during the race date allocation process a desire to appeal if a position is not accepted before the Director makes an actual decision on the approved race dates for the coming year is not a recognized notice of a request for a hearing as constituted under Policy Directive No. 3-2007. To do so, would create a dangerous precedent.
The Frey v. MacDonald case has no application in this matter as Mr. Kruba agreed with Ms. Harquail the case referred to was moving matters from a lower court to a higher court.
With the decision rendered, the appeals for both tracks proceeded. It was agreed to deal with the Dresden Raceway matter first.
Ms. Harquail asked the Panel to dismiss the appeal as there was no basis to it. It was her contention that the dates awarded to Dresden Raceway for 2008 met the policy guidelines. Those guidelines were put in place to provide the industry some stability and consistency.
She outlined the sequence of events the Administration undertook related to the approval of the 2008 race dates for Dresden Raceway. It received and approved a 2008 race date application for Dresden Raceway of 25 days (Exhibit 2, tab 2). The basis for establishing the total number of race dates for the track for 2007 was a ruling, SB Ruling Number Gen 003-2007 (Exhibit 2, tab 3) issued by the Commission dated May 30, 2007, which stated that the race date schedule for Dresden was 25 days. The start date for 2007 was ordered as June 10 in that ruling due to the horse people’s refusal to enter their horses into race with the 2008 approved dates returning to the track’s traditional start time of the May long weekend. Exhibit 2, tab 3 contained 3 race date calendars, the 2007 for 21 days, the 2007 post ruling for 25 days and the 2008 calendar reflecting the Director’s decision for 25 days.
Mr. Walzak asked the Panel to order Dresden Raceway to apply for and race 28 days in 2008. He contended that as a result of that same May, 2007 Commission ruling, the actual number of race dates for Dresden was 28 and he referred to tabs 4, 5 and 6 of Exhibit 2 to support his contention. He also contended that Mr. Malcolm McPhail’s comments at that hearing that OHHA would only accept 28 days provided merit to their case. It was his position that any variance from that number would require a business case in support and nothing was filed by the track or required by the Commission as per the Policy Directive. This fact, he testified, deprived OHHA of an opportunity to comment on the variance from the 28 days.
Mr. Kruba testified that it was very clear from the May 30, 2007 ruling from the Commission that the total number of race dates for Dresden Raceway in 2007, was 25. One only had to look at the wording in the paragraph preceding the number total for Dresden to realize this he stated. It was his contention that the Administration agreed with this interpretation of the number of days and of the track returning to its traditional days as per the Commission’s letter dated October 11, 2007, to Mr. Walzak (Exhibit 2, tab 5).
The Panel also heard from Mr. Walzak that the 28 race days at Dresden were important for the horse people as OHHA was proposing a harmonized race date schedule for South Western Ontario. Mr. Kruba argued that neither moving to the 28-day schedule at Dresden or a harmonized South Western Ontario race date calendar fit within the policy guidelines. The policy is clear that it must benefit all the stakeholders, and Mr. Walzak stated the OHHA proposal benefited the horse people.
With respect to the OHHA appeal on the Windsor race dates, Ms. Harquail asked that it be dismissed on the same grounds as for the Dresden appeal, there was no basis for it, the process met the guidelines and provided stability and consistency. Mr Kruba concurred with this request.
The Administration, as outlined by Ms. Harquail, followed the process as per Policy Directive No. 3-2007. That is when Windsor filed a request to reduce its number of race dates for 2008 by 11 days to 100 (Exhibit 1, tab 3, p. 2) the proposal (including business case) was circulated to the industry for comments (Exhibit 1, tab 2) and Windsor was notified (Exhibit 1, tab 4) that “the Executive Director has serious concerns” in that letter dated October 22, 2007. Following a meeting convened by the Director between Windsor and OHHA representatives, Ms. Hoogeveen, on behalf of the Director, wrote to Windsor (Exhibit 1, tab 5) that he was “still not inclined to approve the application at this time” and that he would make a final decision on November 2, 2007. On November 1, 2007, Mr. Kruba, on behalf of Windsor Raceway, wrote to the Director (Exhibit1, tab 6) stating that reasons had not been provided in not accepting the track’s proposal. The following day, November 2, 2007, Ms. Hoogeveen emailed Mr. Kruba (Exhibit 1, tab 7) that if Windsor did not wish to provide an alternate schedule it would be dealt with in the reasons. On that same day, the ORC issued to Windsor its approved race date decision for 2008 (Exhibit 1, tab 9) and also provided a commentary on the track’s proposal utilizing the same indicators (Exhibit 1, tab 8) referenced in the Policy Directive where the notice communicated to the industry what would be required to demonstrate the case for change. On November 5, 2007, Mr. Kruba emailed the Commission (Exhibit 1, tab 10) a race date schedule for Windsor for 2008 for 111 days. That schedule, according to Mr. Kruba, included 4 days per week in the first quarter as OHHA requested it. On November 8^th^ as per previous testimony, the industry notice on 2008 race dates was circulated and OHHA filed its notice for a request for a public hearing.
Mr. Walzak testified that OHHA was only asking for 2 additional days. These 2 days were important as they were crucial to their proposed South Western Ontario harmonized race date schedule (Exhibit 3, tab 10). This schedule, which included Windsor, Western Fair, Hiawatha, Dresden and Woodstock racetracks, provided horse people with more efficient year-round racing opportunities ranging from a maximum of 7 days a week per month to a minimum of 4 days per week in September. There is a sufficient horse supply to service these according to Mr. Walzak but Mr. Kruba disagreed citing numbers of horses entered into race in Exhibit 3, tab 8. Mr. Walzak’s definition for adequate horse supply was full fields with a minimum of 7 horses per race. Ms. Hoogeveen notified the Panel there were some inaccuracies related to the proposal but the Panel stated it would consider the general intent of it rather than the specifics.
The proposed schedule would require Windsor to move its Tuesday days to Wednesday which Windsor stated it would not want to do as Tuesdays have proven to be a day its fans have shown they like. Mr. Walzak was asked if OHHA would consider purse equalization with Dresden as Winrac has reportedly requested if it helped facilitate its proposed schedule. Mr. Walzak replied in the negative. He said OHHA is prepared to work with the track in other ways like marketing and that if purses drive the business it is willing to talk about other ways to help purses.
Mr. Kruba claimed that issue of race date harmonization was dealt with in the 2006 race date ruling and that OHHA was not presenting anything new. He claimed that any harmonization schedule should also include both Clinton and Hanover. Mr. Walzak countered that they were outside of a 2-hour drive and therefore not considered.
Mr. Walzak argued that as tracks increase race dates the result is increased wagering, thereby increasing purses and tabled Exhibit 3, tab 5, appendix vi, to demonstrate his point. Mr. Kruba countered that the figures do not relate to wagering totals and to be meaningful all purse revenues from the slot program must be netted out and that other tracks slot programs have performed better than Windsor for the same reasons related to its racing performance. Ms. Harquail put the Panel on notice that Woodstock had not received approval for any race dates for 2008 as of the hearing.
The proposal included returning Sunday race dates in the summer to Windsor. Sunday racing at Windsor had been discontinued by the Commission for 2007 in response to an OHHA statement that an insufficient purse level was at least partially responsible for Windsor Raceway not being able to race some race cards the year previous due to a horse shortage. The objective for cancelling those dates was to allow the track to build up its purse account and to return to its traditional race dates. Mr. Kruba tabled Exhibit 7, a chart showing merged handles for Windsor. This chart showed the handle for the Sunday summer months was $562,373 versus an average of $638,375. This, he argued, demonstrated the customer decision not to prefer Sunday afternoons at Windsor. Testimony indicated that the objective was being met re horse supply although Mr. Walzak claimed that purse levels do not influence horse supply and that with the track closed in the summer wagering levels for simulcasting, which is important to the industry, decrease. Reference was also made to a newspaper article where Mr. Brian Tropea from OHHA was quoted as saying the plunge in purse levels at Windsor was forcing horse people to Toronto.
Mr. Walzak argued that Windsor is still an important track and one of the best despite its recent difficulties related to levels of business, a drop of 64% in handle and 43% in race dates. He tabled Exhibit 5, appendix vii, page 26/46 to prove this but added the brand needs refreshing which included the facility. Mr Kruba responded that the facility improvements have occurred and that being dark in the summer has helped facilitate this as well as dealing with some labour issues. There was no discord as to many of those reasons such as the difficulties attracting US customers and the state of the Windsor economy but Mr. Walzak did question customer demand and satisfaction, noting that there was no marketing plan available for 2008 nor had there been one for 2007. He testified that the horse people feared a further decline and the proposal was intended to re-build the region.
Issue
- Should the Panel uphold the appeals for either or both the Dresden Raceway or Windsor Raceway 2008 race date allocation decision as made by the Director and issued in the November 7, 2007 Notice to the Industry?
Decision
- The Panel, after carefully considering the testimony and reviewing the evidence submitted, denies both appeals and upholds the decisions of the Director.
Reasons for Decision
In the matter of Dresden Raceway, the Panel agrees with the decision of the Administration that in the May 30, 2007 ruling of the Commission, 003-2007, the allocated number of race dates for Dresden Raceway for 2007 is 25. Therefore the Administration followed the proper procedure as it relates to following Policy Directive No.3-2007. As the track was not asking for a variance in race dates, no business case was required as the dates were automatically approved.
OHHA’s attempt to count the lost dates at Dresden in 2007 is not supported by the ruling and no weight was attributed to Mr. Malcolm McPhail’s comments at that hearing when he stated that OHHA would not accept anything less than 28 days.
In the matter of Windsor Raceway the Panel agrees with the decision of the Administration. The Director followed Policy Directive No.3-2007. The track’s application for 2008 race dates was a variance from 2007; the track supplied a supporting business case which was distributed to the industry for comment along with the application request. The Director, after receiving input from the parties which included hosting a joint meeting, made a decision to allocate 111 race days for 2008, the same as for 2007 albeit allowing the track to submit a schedule for those dates which it subsequently approved. At the time of the approval, the Administration provided comments on each of the indicators the Policy Directive stated would be used to judge the business case for change.
With respect to the request for a harmonized South Western Ontario race date schedule, the appellant could only state the benefits flowed to the horse people. This contravenes the Policy Directive which states, ”Where there is substance to the case for change and where the change is demonstrated to benefit the entire industry, the Administration will initiate discussions with the industry.” On this basis, the Panel cannot order the Administration to violate its own policy.
The Panel notes there may be merit to some or all of the proposed harmonization schedule for South Western Ontario. In fact, harmonization of race dates across the province of Ontario could have merit. The Panel notes there appears to be an opportunity to continue those discussions between OHHA and Winrac and urges both parties to move forward and begin meaningful discussions as to how such a proposal could become reality. The lynchpin to those discussions is purse equalization. It is time for each party to begin talking to each other rather than at each other.
DATED this 28^th^ day of November 2007.
Rod Seiling
Chair