Woodbine: To the Standardbred Racing Community

Published: July 12, 2017 04:56 pm EDT

July 12, 2017
Standardbred Racing Community
Update on Initiatives and Response to RG Burgess QC

As the Chairman of the Woodbine Entertainment Group (“WEG”) Board of Directors, Chief Executive Officer, Committee Chairman of the Standardbred Racing Committee and full membership of that Committee, we are responding to the letter of R G Burgess, QC in respect of Standardbred racing at WEG.

As an initial matter, we don't make decisions of any type which turn on preferring or advantaging Standardbred or Thoroughbred racing against each other. Our decisions are made with reference to the best interests of WEG which we interpret as allowing the company to meet its core mandate of supporting horseracing and ensuring that we have the strongest possible racing programs and businesses for both breeds. It is that simple and there is no division in our Board (which as an aside, as currently constituted owns more and has a greater financial interest in racing Standardbreds than Thoroughbreds) or management on that issue. Our Board also benefits from the business experience of a diverse group of directors who aren't currently owners of racing horses but who have outstanding credentials in finance, marketing, government relations and business growth.

Our decision on moving to year round Standardbred operations at Mohawk was made after two years of careful consideration and with a very significant financial and management resources commitment to Mohawk being a world class Standardbred operation. In addition but of great significance, we believe that our commitment to Mohawk greatly enhances the prospects for the best possible expansion of gaming, introduction of other entertainment offerings at Mohawk and exciting development of the full Mohawk Park site. The site will be branded Woodbine at Mohawk Park in May 2018 to capture the value of the Woodbine brand internationally, which is where we expect the most wagering growth in the future.

WEG already has the largest annual handle on Standardbred racing; our objective is to further improve those results. WEG already has the most comprehensive and financially accessible stakes program in Standardbred racing; our objective is to maintain and further enhance it.

We have demonstrated through the Pepsi North America Cup and our other signature racing events that Mohawk is an outstanding venue for great crowds, great wagering and great entertainment. It will be that much better with an expanded dining room and the addition of VIP suites and other modern amenities. In fact, following the recent running the NA Cup a prominent US Standardbred owner, who is also a member of the Hambletonian Society stated that “I believe the performance of the WEG team sets a high standard that ought to be the goal of any racetrack that intends to host a major event in the future”. This level of customer and horsemen satisfaction has not been possible at Woodbine for Standardbred racing due to the inherent difficulties of running the races at a facility that was not built to operate as a Standardbred facility.

With the greatest respect to Mr. Burgess, most of his concerns are simply outdated or not factual. Except for big events and weekends with good weather, large live attendance is a difficult objective. By a huge margin, most wagering is done remotely, more than 85% of handle on average is bet off-track. No one disputes that the on-track experience for Standardbred racing is better at Mohawk. The death of racing in Montréal and the New York City suburbs had nothing to do with alternating venues. Woodbine Thoroughbreds operate without alternating venues and we have grown the handle significantly each year. The decision to move to Mohawk is to improve and invest more in our Standardbred business; the opportunity to construct a second turf course at Woodbine is a byproduct of the first decision.

Addressing one of Mr. Burgess’s chief criticisms there is no debate that winter racing in Ontario has its challenges. However, the majority of our winter cancellations are caused by transportation issues (not racetrack weather) and at Mohawk we fully expect both less cancellations and more flexibility in adjusting races and schedules in the event of cancellation. There is no doubt that the Milton area is the heart of the Standardbred industry in the Province –it is where our horsemen live and work.

The other history cited by Mr Burgess refers to a different era when racing had a monopoly on legal gaming and our purses were derived exclusively from wagering revenues.

Following the cancellation of the Slots at Racetracks program by the Province, WEG stepped up and committed our resources to Standardbred racing in Ontario by helping create and operate the Standardbred Alliance since 2014. This Alliance includes all three levels of tracks (grassroots, signature and premier) and has greatly benefitted the smaller member tracks in Ontario by creating efficiencies in racetrack operating costs.

WEG incurs significant operational and other costs each year to support the members of the Alliance on matters such as:

  • Horse Racing support including purse payment administration, race datescheduling, TCO2 testing and race date applications

  • Pari-mutuel wagering support including tote fees, decoder rentals, track settlements, import and export contracting

  • Marketing support services and a robust players rewards program

Members of the Standardbred Alliance and WEG, pool pari-mutuel wagering revenues and share the proceeds amongst the member tracks to ensure each member track is sustainable. WEG provides open and transparent reporting of all wagering activities and purse distributions to each member of the Alliance, Ontario Racing, OLG, AGCO and the Horsemen’s association on a predetermined reporting basis and on request.

We have voluntarily contributed nearly $8M in Horse Improvement Plan proceeds since the inception of the Alliance to ensure breeder incentives are retained at levels that make a difference to the Standardbred breeding sector in the Province. This is over and above the $25M annually, which comes directly from the wagering on WEG races.

Additionally, WEG funds and guarantees minimum purse levels for live racing participants at each of the Standardbred Alliance tracks. WEG has funded in excess of $30M to Alliance members since its formation in April 2014. WEG is committed to continuing this funding and guarantee and has no intention of reducing it.

With increasing competition from entertainment options across Ontario and globally, we have continued to grow the handle and in some instances break wagering records on our biggest events. Recently the Pepsi North America Cup handled $4.1M, one of our top results for a Standardbred card and The Queen’s Plate set another record at $13.5M (up over $2M from 2016). The majority of this growth has come via digital channels and is driven by international wagering which is where many of the new opportunities are.

To continue our commitment to the on-track experience and develop a new generation of fans, WEG has diversified its executive team. An outcome is we have made excellent progress with delivering our strategic pillar that mandates becoming a Guest Centric organization. Our work in customer segmentation paired with our internally aligned priority to deliver a thrilling experience for all guests continues to be a catalyst for growth in attracting new fans to horseracing.

The synergy created amongst our internationally trained culinary team, on-trend events team, superior guest experience team and our dynamic marketing and sales teams are defining an everyday and special event on-site experience that is well positioned to dramatically grow our fan base. We have also invested in a Standardbred Concierge program to ensure that the owner experience is second to none. Our success is tied to driving attendance and creating winning experiences at our racetracks for all fans, horse people and stakeholders. You will notice that our decisions are made principally with reference to our customers and business, which is wagering and entertainment based. Attracting new fans to Standardbred racing at the Woodbine facility has proven very difficult over the years – and unfortunately we have even turned off a few fans. This is not so of Mohawk. We are very excited to invest in the property and make it a centerpiece for Standardbred racing.

Of course our plans also include the optimal use of our land assets and profitable development of our properties to benefit our core business of racing. Perhaps the most important indication of our commitment to a successful long term future for both breeds is our work on long term gaming funding at both Mohawk and Woodbine. At Mohawk in particular, we secured a long-term agreement with the OLG to maintain gaming at Mohawk (to our knowledge the only Standardbred track in the province to have this certainty). This will provide stability and self-sufficiency. It will insulate us from potential changes in government funding policy and other pressures on government funding. This has required a huge investment of our management resources but places us in a very fortunate position as other jurisdictions face regular reviews and incursions on financing. Additionally, we announced a $10 million investment into the facility to ensure we could fulfill our promise to ensure that Mohawk becomes the world-class venue we envision.

Our horse people are critical stakeholders. Our consultations with and feedback from horse people indicated that they favour our decision. Further our dialogue with them remains on-going. WEG recently commenced detailed work on a long-term development master plan for the Mohawk property centered around Standardbred racing. The first group that our Master Plan consultants met with were members of the Board of COSA.

WEG has no intention to change the revenue split to disadvantage Standardbred racing. WEG is committed to the growth and prosperity of the racetracks in the Standardbred Alliance and providing ongoing support for the Standardbred breeders in the Province. This commitment will remain in place as will WEG’s goal to maintain and consolidate Woodbine at Mohawk Park as the number one Standardbred racetrack in North America.

In conclusion, we are convinced that the move to Woodbine at Mohawk Park will be an enormous success. We are committing the financial and executive resources to support that. It will be a fantastic facility. As outlined above, our business is strong and our Standardbred business is treated very well, as it should be. We look forward to doing even better. We invite questions from and dialogue with our horse people and other stakeholders.

Sincerely,

H. B. Clay Horner, Chairman
James J. Lawson, CEO
John D. Fielding, Board of Directors
Douglas Millard, Board of Directors

CC: Hugh Mitchell, Ontario Racing, Western Fair District; Stephen Rigby, OLG
Bill O’Donnell, COSA; Bruce Barbour, GCGC; Ted Clarke, Grand River Raceway;
Ian Fleming, Clinton Raceway; Board of Directors, Woodbine Entertainment Group
Standardbred Canada; The Harness Edge; Harness Racing Update


The views presented in Trot Blogs are those of the author and do not necessarily represent those of Standardbred Canada.

Have something to say about this? Log in or create an account to post a comment.