A proposal by officials with the Red River Exhibition Association to take over and operate Assiniboia Downs is laughably naive, based on bogus numbers and would quickly and inevitably lead to the death of live throughbred horse racing in Manitoba, says the Manitoba Jockey Club.
"If (Red River Exhibition CEO Garth Rogerson) can run this place with $5 million less than we do, then he needs to be running the entire government because they'd have a surplus so fast it would make your head spin," MJC president Harvey Warner said in an interview Wednesday.
Another racing-industry source characterized Rogerson's proposal even more bluntly: "He's been riding the Ferris wheel too long."
Warner said Rogerson's unsolicited proposal to take over and run the Downs with half the government support the track currently operates on -- a proposal first publicly revealed in Wednesday's Free Press -- is so preposterous he wonders if it isn't just simply a veiled attempt by the Ex to take over the Downs facilities and their valuable 130-acre tract of land with no real intention of operating live racing.
"I wonder if this will all turn out to just be like those politicians who make all kinds of promises. And then, when they get into government, they say, 'Oh jeez, we didn't realize we needed all that money. This can't work, we're shutting her down.'
"Because that is exactly what would happen to racing if this went through."
The non-profit MJC intends to vigorously oppose Rogerson's proposal and the track has some cards to play. The 53 hectares the Downs sits on is owned by the MJC, not government, and is valuable -- a four-hectare section on a vacant parking lot that the MJC put up for sale last year was listed at $5 million and immediately attracted interest.
Warner said advanced discussions are underway with a property suitor on what Warner would only call -- citing a confidentiality agreement -- a major "new development" on the property.
Failing all that, it's also conceivable that as a last resort -- should the Downs cease to be viable for horse racing because of a rumoured proposed cut in government support -- the MJC as the property owner could potentially put the entire facility and land parcel up for sale to the highest bidder, leaving the Ex to put forth an offer like everyone else.
Warner says he has no idea what would become of the tens of millions of dollars such a sale would presumably generate, as it was never contemplated when the MJC was set up as a non-profit entity in the 1990s.
"That's something we'd have to look at, but we're nowhere near that point yet. And hopefully, we never get there."
Warner said the first the MJC heard about the Red River Ex proposal was when he was contacted by a Free Press reporter Tuesday. And he said the lack of any kind of consultation with the Downs -- in addition to being a terrible way to do business -- has predictably led to Rogerson's proposal being riddled with errors.
For starters, Warner says the sum total of government support the Downs received last year was not the $10 million Rogerson claims, but $7.85 million -- $6.45 million in profits from the 140 VLTs the Downs operates and another $1.4 million from a tax the government levies and then returns to the Downs on every wager made at the track.
That's over $2 million less than Rogerson's figure and it begs the question whether Rogerson is therefore proposing to run the entire Downs operation on less than $3 million per year, or whether he will already have to revise his numbers upwards to reflect the real level of government support.
Warner said if someone -- including Rogerson -- can come forward with a viable proposal to run live horse racing in Manitoba, he will be happy to turn over the keys and would be the first to resign from a job he has done for free for almost two decades.
But he said Rogerson's proposal is out of touch with the realities of running live racing and wonders why the MJC has been cut out of discussions that have obviously already taken place between the Ex and the province about a takeover.
He said the province's mandate to the MJC has always been to operate live racing in Manitoba on a non-profit basis and he says they have done that for almost two decades -- with the support of the same VLT revenues hundreds of bars, restaurants, hotels and now, the Winnipeg Jets, also receive.
Warner said the land and facilities at the Downs are entirely paid off and the MJC already has a budget in place for 2013 that was based on the province guaranteeing, as they have the last two years, that up to the first $6.5 million in profits from the VLTs on track property go directly to the Downs.
Warner said no one from the MJC has met with an NDP cabinet minister in two years and the first the MJC heard their slice of the VLT revenues might be cut for this year was from the Free Press this week.
Warner said 2012 was the first year the Downs VLTs did not reach the $6.5 million profit threshold. He said VLT profits immediately jumped when new machines finally arrived in November and were installed in a brand-new VLT lounge the track renovated at its own expense for about $400,000.
Warner said he takes no issue with the Winnipeg Jets getting a new casino that will generate up to $5.5 million in VLT revenues for the team -- or with the hundreds of bars, restaurants and hotels that also get VLT revenue.
Warner does wonder, however, why the province is apparently targeting only the Downs' VLT revenue as it contemplates austerity measures in the upcoming budget.
"It really makes you ask the question, 'Why only us?' " said Warner. "I wish I knew that answer."