Shuffling the Deck: Losers, Part 2

(QMI Agency file photo)

(QMI Agency file photo)

Kelly Pedro, The London Free Press

, Last Updated: 2:19 PM ET

It’s a sure bet that when Ontario recasts its gambling industry there will be winners and losers. The horse-racing industry, and municipalities stripped of their casinos and slot lounges, will be the big losers. Ready to cash in their chips are the Ontario government and municipalities that would get new gaming facilities.

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Some will hit the jackpot.

Some will roll snake eyes.

And some won’t know their fate until after the province has laid all its cards on the table.

But one thing is certain: With a $2-billion-a-year pot on the table, the future of Ontario’s gambling empire is sure to become an election issue and a proposed Ontario Lottery and Gaming Corp. shuffle means municipalities that lose casinos and slot lounges are poised to become big losers.

Perhaps the largest player being dealt out of the game is the horse-racing industry that found out last year the province is ending its annual $345 million in funding on March 31 that came from slot machines at racetracks.

That announcement sent the horse-racing industry into a downward spiral.

Questions about which racetracks will keep their slots and what those deals will look like have caused uncertainty in the breeding industry, said Stanley Sadinsky, a retired law professor at Queen’s University and former chairperson of the OLG and the Ontario Racing Commission.

The province should have mapped out a transitional plan that wouldn’t have devastated the breeding industry, he said.

“This was just like a guillotine.”

Rural Ontario was devastated by the move, which provincial NDP Leader Andrea Horwath charges is “callous” and not thought out. Horwath tabled a motion calling on the government to freeze OLG’s modernization plans before the legislature was prorogued in the fall.

Last year, OLG closed three slot gaming facilities in Fort Erie, Hiawatha in Sarnia and Windsor while the government worked out secret deals with Woodbine Racetrack in Toronto and Mohawk Racetrack in Campbellville to keep live racing going for the next two years.

In what could be a sign of what’s to come, Woodbine laid off more than 100 salaried workers last week and dropped several others to season roles.

By the time the dust settles, about half the tracks will close while the rest are expected to switch to straight leases that critics say will devastate the harness-racing industry that employs thousands.

“The fallout has been severe and we’ve seen communities in rural Ontario become devastated with the loss of the horse-racing industry,” Horwath said. “Thousands of jobs lost and hundreds of small businesspeople put out of business. It’s been quite a fiasco.”

And while some places, such as the Western Fair District, have inked lease deals with the province, chief executive Hugh Mitchell said he won’t know whether horse racing will stay until the province announces what its new funding model for horse racing — expected this month — will look like.

But racetracks like Western Fair aren’t giving up.

Mitchell said Western Fair will be “very aggressive” getting itself and a private, yet unnamed, partner qualified to bid on the Southwestern Ontario gaming bundle that includes six zones — Hanover, Clinton, Sarnia, Woodstock, Dresden and London. Under the OLG plan, each of those sites would have at least slots, with London open to both slots and table games.

Whether the government will pony-up enough money to keep horse racing alive at Western Fair is unclear.

“We’re right now ... very close to understanding what the new racing model is, how many race dates and what kind of funding for purses and operating expenses will be made to those tracks that the government will support,” Mitchell said.

Sadinsky said in its rush to generate revenue, the province launched the Slots-at-Racetracks program in 1998. Within a year a flurry of nine new gaming facilities opened.

That’s been the problem with Ontario, said Sadinsky — there was never a strategic plan to develop the gambling market.

That is perhaps why economist Don Drummond recommended closing one of Niagara’s two casinos as part of a provincial plan to rein in a $12-billion deficit. While the province has said it’s not closing a casino there, some worry about the fate of Casino Niagara.

The casino, run by Falls Management Company, which also runs the much larger Niagara Fallsview Casino Resort, will lose its valet service Feb. 24 and 92 slot operators at both locations were offered buyouts.

In the backdrop is the threat of a Toronto casino that would pull money from Niagara casinos just as, across the border, some media are reporting New York Gov. Andrew Cuomo wants to expand gaming and build as many as three new casinos in upstate New York.

“There’s a lot of wait and see. It’s hard,” said Niagara Falls, Ont., Mayor Jim Diodati. “You’re kind of preparing to close your eyes and walk in a dark room right now where we don’t know enough of the details.”

kelly.pedro@sunmedia.ca

Twitter.com/KellyatLFPress


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