The Manitoba Jockey Club is convinced the Selinger government is working with Red River Exhibition Inc. to bankrupt the horse racing track operator and turn the track and its 130 acres over to the Ex.
The jockey club, a non-profit group that owns and operates Assiniboia Downs, has gone to court to fight for its survival.
In documents filed at Queen’s Bench, the jockey club alleges the provincial government has already decided to use a variety of illegal and improper moves to cut funding to the track by more than 50 per cent, a move designed to force the club to turn over the horse racing track to the Red River Exhibition.
The jockey club said its proof is in a letter dated Jan. 30 Finance Minister Stan Struthers sent to the club, which confirmed details of the Red River Ex plan first reported that day in the Free Press.
"The contents of the (Struthers’) letter confirmed that the plan adopted by Minister Struthers was designed to... (undermine) the (jockey club’s) long-term financial stability," states the document the jockey club filed in court.
The jockey club states that in two subsequent meetings with Struthers, on Jan. 31 and Feb. 28, he told them the deal to cut the club’s funding is done and it would be best if the track was taken over by the Red River Exhibition.
The jockey club has made an application to the court for an interim ruling that would maintain funding agreements the club has with the province and the Manitoba Lotteries Corporation that provide the club with $9.5 million annually until new arrangements can be finalized.
The allegations have not been proven in court.
The jockey club has owned and operated Assiniboia Downs since 1993. It owns the track and surrounding 130 acres, which are located adjacent to the Red River Exhibition property on the western edge of Winnipeg.
The province announced at the end of January it was considering a proposal that would see the Red River Ex take over the horse racing track and surrounding land in exchange for a $5-million reduction in funds directed to the track operation.
It’s believed the province intends to reduce the funding through a combination of cuts from VLT revenue and pari-mutuel betting.
In an affidavit included in the jockey club application, the club’s CEO Darren Dunn states it appears that Struthers and other members of the provincial government are working secretly to have the Red River Ex take over the jockey club property at no cost.
"What has transpired has every appearance of decisions being made behind the scenes and out of the light of public transparency... designed to put (the jockey club) in the worst possible position financially," Dunn states in the court documents. "(Struthers’) sole purpose seemed to be to assist (the Red River Ex) in acquiring a $70 million real estate asset without any compensation being paid."
An appearance Thursday morning in the uncontested motions hearing court was adjourned to next week when a lawyer for the government attended to challenge the jockey club application.
A spokesman for the province said it would not comment on the legal action by the jockey club but confirmed it has informed the club it intends to proceed with plans to cut an unspecified amount of funding.
The jockey club documents state the province cannot cut the club’s VLT revenue, adding that source of funds is negotiated between the club and the Manitoba Lotteries Corporation, an independent arms-length government agency.
The jockey club also claims revenues from track betting are also guaranteed to the club through legislation, which sets out steps that have to be taken to change the funding formula — steps the province has not taken.
Jockey club lawyer Jeff Rath told the court Thursday a ruling is urgent because the club fears it will be placed in serious financial difficulty once the budget details are announced April 16, adding the club wants a court ruling before that date.
"The Manitoba Jockey Club believes it is important that the Legislature have the opinion of the Court of Queen’s Bench in regards to the legality of budget measures that they are being asked to vote upon as an extremely pressing and urgent matter in the protection of the public interest," Rath told the court Thursday morning.
Rath said the jockey club would not comment on the legal action.
A source close to the jockey club said it only resorted to legal action because the government has repeatedly refused to meet with the club to consider its own plans to ensure the long-term financial security of the track.