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Jockey club, NDP bury hatchet

12-year revenue deal ends bitter dispute

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The deal with the province means Assiniboia Downs will have to generate new sources of revenue on top of horse racing and VLTs.

JOE BRYKSA / WINNIPEG FREE PRESS Enlarge Image

The deal with the province means Assiniboia Downs will have to generate new sources of revenue on top of horse racing and VLTs. Photo Store

The Manitoba Jockey Club and the province have kissed and made up -- for at least the next dozen years.

A new 12-year VLT agreement between the Manitoba Jockey Club and Manitoba Lotteries ensures the viability of live thoroughbred horse racing and buys them the time they need to turn the Assiniboia Downs racetrack into a new multi-faceted tourist destination.

"I'm relieved mostly for the family and people involved and the 500-plus jobs out here," Downs CEO Darren Dunn said Wednesday. "But to be absolutely clear, there were no winners on this on either side. We have an agreement, a settlement and we're looking forward to working with the Government of Manitoba.

"From my perspective, the most important thing is that the industry has maintained control of the industry. And we've always said that was key."

The new agreement, which was first announced Wednesday, comes after a 16-month whirlwind of litigation and allegations that began in January 2013 when the province informed the MJC it was suspending a long-standing agreement that for years saw the track receive a larger-than-normal portion of the proceeds from the 140 VLTs in place at the Downs.

That agreement -- similar to one the province has with the Winnipeg Jets and other racetracks have with provincial and state governments throughout North America -- had long helped fund purses at the Downs and was an acknowledgment of horse racing's deep roots in Manitoba and its once-exclusive domain as the only form of legal gambling in the province.

MJC officials allege the abrupt move by the province to scrap the agreement was aimed at bankrupting the track so its property could be turned over to the neighbouring Red River Exhibition. But instead of rolling over, the MJC fought back, launching a string of civil suits last year against the province and former finance minister Stan Struthers, as well as making a criminal complaint to the RCMP.

The new agreement comes as both the MJC and province were awaiting a court ruling on whether the MJC would be granted an injunction keeping their existing VLT agreement in place pending the result of other litigation they had launched against the province.

That ruling was expected by May 4, the same day the Downs is scheduled to open the 2014 live racing meet, but the MJC has now withdrawn all its litigation against the province as part of the new VLT agreement.

Dunn said the new agreement with Manitoba Lotteries contains a "tapering" element that will mean the track's share of revenues from the VLTs the province has on-site will decline over the life of the agreement, forcing the MJC to find new revenue streams in the interim.

The Downs will receive $5.4 million in what the province calls "supplemental grants" in years one to four of the new deal; $5.25 million in years five and six; $5 million in years seven and eight; $4 million in year nine; and $3 million in year 10. The final two years of the deal, the Downs' take of the VLTs will be through commissions and contributions alone.

"This settlement required some sacrifice," said Dunn. "Our industry is going to be dealing with reduced revenues over the long term. That's something that puts the onus on us to grow and produce new revenues through our new joint partnership with Peguis. And that's what we intend to do."

Dunn said a new partnership with Peguis First Nation, which the MJC announced last year after the province moved to cut VLT funding, is flourishing, and joint plans to build two new hotels and a convention centre on vacant land adjacent to the Portage Avenue track are in "pre-construction phase."

The project is expected to cost in excess of $100 million. "There's a lot to do. We're reviewing construction management, we're reviewing drawings, we're assessing service requirements," said Dunn.

 

paul.wiecek@freepress.mb.ca

Twitter: @PaulWiecek

Republished from the Winnipeg Free Press print edition April 24, 2014 A3

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