Winnipeg Free Press - PRINT EDITION

Racing needs horse sense

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If politics is the art of the possible, then a possible political solution is immediately available to resolve the "crisis" that has seized the horse racing industry in Manitoba.

The solution is for the Doer government to increase the take Assiniboia Downs gets from its VLTs to 90 per cent from 75 per cent, which would increase revenue to the Downs by as much as $1 million a year --more than enough to meet the immediate and competing demands of the thoroughbred, standardbred and quarter horse factions.

This is not a perfect solution, but it is a possible solution that is better for everyone involved than the squabbling and buck-passing (in every sense of those words) that is going on at the moment.

But let's begin at the beginning.

Last spring, the Doer government cut without warning the $490,000 annual grant that has been required to keep harness racing (standardbred) alive in Manitoba since the advent of government gambling emporiums sucked up most of the wagering at race tracks.

The cut was denounced by the harness racers, the small towns and the small-town businesses and charities that benefit from the circuit, by horse racing romantics and by this newspaper, among others.

The government relented and gave the harness racers about $250,000 --enough to get them through a modest season last summer while buying time to find a long-term solution.

The plight of the harness racers attracted the attention of Ontario's powerful horse racing industry, which supplies simulcast signals of its races to the Downs.

Betting on simulcast races accounts for most betting at the Downs, about 83 per cent of all betting at the Downs in 2001 -- $29.6 million of $35.7 million wagered. The Ontario representatives hinted that unless some of the money the Downs collects from simulcast wagering was given to harness racers, it might block its signals, which would create a big hole in the Downs' revenue stream.

The Ontario crowd reasonably argues that money raised from simulcast broadcasts of harness racing should be returned to harness racers, while money raised from thoroughbred racing should be returned to thoroughbred racers.

Predictably, the Downs and Manitoba's thoroughbred crowd rejected the principle, while just as predictably, the harness crowd embraced it.

Calculating the amounts raised from wagering on simulcast is an immensely complicated thing.

But basically, for purposes here, about $7.9 million a year is raised from wagering on harness and thoroughbred racing, about $3.4 million of which goes into a pool administered by the Manitoba Horse Racing Commission.

For the past decade, as regular as clockwork, the commission has simply turned all the money over to the thoroughbred industry to pay the purses that keep it alive.

But this time was different. This time the harness racers argued before the commission that at least $660,000 of the $3.4 million pool was raised from wagers on harness racing and properly belonged to harness racers.

A majority of the commission agreed to the principle and, in December, awarded the harness racers about $476,300 of the $660,000 they claimed, with an additional award of $38,000 to the even smaller quarter-horse crowd.

The commission's decision, as well as the apparent ineptness with which the commission handled its decision and subsequent activities related to it, has outraged the thoroughbred industry, in particular the Manitoba Jockey Club, which is the non-profit corporation that was formed in 1992 to own and operate the Downs.

To the Jockey Club's credit, it has saved the Downs from bankruptcy, retired about $4 million of about $6 million of debt while improving its facilities and services and increasing purses so as to attract better horses and more paying customers.

That this was achieved by volunteer effort is laudable and remarkable. But it could not have been achieved without support from government in the form of a generous return from VLTs in a lounge the Downs was licenced to operate. The 75 per cent take amounts to an estimated $5 million a year.

The take from the VLTs was granted in order to help finance the operations of the Downs, but also with the understanding that a healthy Downs is necessary to support a healthy and labour-intensive horse racing industry.

Until very recently, that has not been the case. As the Downs recovered, Manitoba's thoroughbred industry declined --there are fewer owners, breeders, trainers, etc. today than there were a decade ago. And, of course, harness racing will go kaput without assistance.

The Downs has continued to put a quality racing spectacle on offer by attracting horses from other jurisdictions, notably the United States. Last year, 60 per cent of horses running at the Downs were from out of province.

As mentioned, however, purses paid at the Downs have been increasing, with the very recent result that Manitobans are finally starting to get back into the game.

The size of purses, about $7,500 per race, has now reached a level at which more Manitoba owners and breeders are willing to make the three-year investment required to breed, raise and train a horse for racing.

The commission's decision to divert $514,000 to harness and quarter horse racing, however, means the growth in thoroughbred purses might stall or shrink. That has shaken the fragile confidence in the thoroughbred crowd even as it restores confidence in the harness crowd.

It also has shaken the Downs. The Jockey Club already has committed to a financial plan for the coming season, including purse levels. If $514,000 is taken from the pool, the Jockey Club will have to make up that money, either through reduced purses, which would be harmful to its reputation, or through adjustments in its budget which could affect all manner of things, not the least of which is the rate at which it is retiring its debt.

Retiring debt is almost always a good idea. For the Downs, debt retirement means more money is available to improve purses to attract horses, to stimulate more breeding, etc. and create that "virtuous circle" of growing prosperity that successful organizations aspire to.

Almost everyone involved sees that the easy means to solve all the problems confronting horse racing in Manitoba is for the government to licence a full-blown casino at the Downs and use the revenues to support all facets of the industry --and make no mistake, it is a significant industry.

Putting casinos at race tracks and allowing tracks to keep some of the revenue has not only saved horse racing in Ontario and Alberta, it is the reason the industry is thriving to great economic benefit for everyone in both those provinces.

That such a casino at the Downs could be allowed has been evident ever since the Doer government entertained the idea of licensing an aboriginal casino just up the street from the Downs in Headingley.

The Downs realized that if that casino went ahead, the track would be toast. It attempted to lure the aboriginal proponents to the Downs, but its offer was spurned, apparently because proponents of the casino did not want to share any of the 90 per cent take aboriginal casinos have been promised by the government.

In the end, Headingley turned down the aboriginal casino on the proponent's alternative site, with the result that its proponents got nothing.

It is still possible to work a deal that might be good for the aboriginal proponents of a casino and, through the Downs, horse racing in general.

But that is not a solution that is immediately available.

What is immediately available is the possibility of allowing the Downs to keep the same 90 per cent take from its VLTs as the government is willing to grant to aboriginal operators of casinos.

The additional $1 million such a decision could generate would be more than enough to meet the needs of everyone involved without in any way blocking other, longer-term solutions, such as an aboriginal/Downs partnership, the creation of a harness racing track at the Downs, or the long-promised installation at the Downs of modern slot machines to replace aging VLTS.

And, bonus points, it is easily politically doable.

Republished from the Winnipeg Free Press print edition January 29, 2003 $sourceSection$sourcePage

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