Snobelen On OLG, Revenue Streams

Published: March 19, 2013 08:36 am EDT

"I suspect that the Premier and the government of the day have the last word on the policy on this file and I think that was a pretty clear statement of intention from the Premier."

In an interview conducted late last week, Norm Borg and OMAFRA's John Snobelen discussed the recent announcement made by Minister of Agriculture & Food Kathleen Wynne concerning the intent for Ontario's government to bring horse racing back into the Ontario Lottery and Gaming Corporation's land-based gaming strategy. Snobelen's words should be welcome news for horse racing as the industry was sent into a tailspin following the 2012 announcement that horse racing would no longer be a partner with the province and was cut from its slots-at-racetracks partnership.

Snobelen could not offer any specifics on how that re-integration will take place as that exceeds his scope with OMAFRA. He did, however, discuss one possible revenue stream that he, John Wilkinson and Elmer Buchanan did propose racing can access: historical racing.

"One of the things we put into our report was historic racing. It's a really good product, matches the kind of profile of a person who wagers on horses fairly well," said Snobelen. "It is a pari-mutuel product and the next step in that is to go our friends in Ottawa [the CPMA] and make applications....I know there's been a past history of having some problems with that but I think people now are very focused on keeping live racing alive and well in Ontario and this is now a critical part of that."

While the concept certainly allows for another gaming option within the framework of racing, it leaves a big question mark in terms of marketing and promotions with the OLG's gaming strategy. Where will racing sit on the scale of priorities?

"I think once the province has said 'look, we're going to have live racing in the province of Ontario' and they're willing to do it out of general revenues if not out of a share in gaming revenues, then you've got a pretty clear commitment," stated Snobelen. "Obviously, the industry would rather do business as part of the gaming strategy because it provides more certainty people think it does."

In a continuing theme of certainty, Ontario's harness racing is certainly uncertain on the issue of race dates and purses. Snobelen stated that by the end of this week there should be more information while noting that the total purses available to Ontario racing - if derived from handle - will be "north of $100 million" plus the $30 million that has been provided through the Horse Improvement Program.

With respect to race dates, Snobelen noted that with WEG set for live racing the rest of schedule still needs to be finalized and that should also be announced toward the end of this week.

"We are in final conversations with a whole series of tracks - we just finished one about three minutes ago - on how to do the transfer payments from government to them to keep them open and whether they're interested in being in business in 2013 and beyond," said Snobelen. "There are lots of those conversations under way right now and we are in the final stages of all of them."

To listen to the full interview with Snobelen and Borg, including what's happening with Kawartha Downs and whether someone else could administer racing at that location, click the play button below.

Trot Radio - Episode 289 - John Snobelen

Audio Format: MP3 audio

Host: Norm Borg



If there is no profit incentive for a track to run horse racing, what is to stop them from opting out of live racing after the fact, leaving us with no place to race. It bothers me that once again deals are being negotiated, and the horsemen's fate is being decided in a vacuum without us being at the table. We don't have a clue what is in the agreement between the government, the OLG and the tracks. Why all the secrecy-- it only leads to rumour and speculation as to what is going on. As a small breeder and owner, I have zero interest in breeding any mares this year based on what Snobelen and Wynne have put forward. They don't understand the horse industry at all! Horse peoples' lives have been toyed with for too long by this band of Liberals. We have been treated with a total lack of respect for over a year now by this government, and as a taxpayer I have had enough.

Mr Leber,

The tracks 10% is long gone withe the end of SARP. What they have in place is a lease agreement strictly for the slots and common areas of the properties that OLG patrons will use. The word is, it's far less than the 10% of SARP.

All of the tracks will eat some of this cash to fund racing operations. Yes, you heard it, they have to use their own money to fund the new racing model on top of the transition cash. That's why your seeing the cuts, not just a factor of less dates, in fact they cannot make the money work. WEG got more days than the OMAFRA panel recommended and they cut the 109 people, with most likely more to come. They can't make it work.

Many tracks have relied upon the SARP to finance other projects, i.e. Hanover, Western, the buildout at Georgian, WEG expansion all predicated on SARP.

I hate to say it, but every horseman needs to thank the tracks that still remain as they have basically stepped up for the good of racing, reached into their pocket and reinvested with no hope of a return.

Give me flack,but that is the new reality,

The problem with luring fans to our sport or back to our sport is they are now slot players. Another stumbling block will come when they have to walk through the OLG slot parlors to get to the track. Our tracks have been absorbed by the OLG and the only people cut out of the deal is the horse people. Now that the live bet is down to nothing after years of OLG cannibalizing our patrons they are offering us 100% of the handle for purses. This is a like building a Super Walmart in front of a Macs Milk and telling them they have to sell more milk.
As far as being part of OLG's Gaming Strategy I still think we have to somehow distance ourselves from them for any chance of long term survival. How can we allow them to partner with us again on anything ? I wonder which casino company or bingo hall Dalton & Dwight will be working for in the future ? Mr. Snobelen's numbers are not going to add up at the end of the day and that may be part of the overall plan anyway.

In reply to by Gleber

Mr Leber.....

since they are offering that you get 100% of the takeout.... then why not focus on luring fans to your sport instead of making fans of slots? Essentially, what the horseman are doing, would equate to the Maple Leafs begging the public to watch the games at the Rogers Center at getting a portion of that money instead of promoting people to go to the ACC where they would get all the cash. (of course the leafs are not struggling, but you get my point)

Listen Carefully to this interview-the numbers don't add up.

The OMAFRA report and this interview suggests 100% of paramutuals takeout will make up the purses. The guess is that the take out will produce north of $100M. But that was based on 43% more race dates. I would be confident that the WEG numbers will be somewhat consistent which is about 60% of this number but the Signature and Grassroots tracks will be short. It is more likely that only 80 Million would be available from the takeout. The government is willing to provide $30 Million for HIP (down from $47 M). This will result in purse money of approx $110 Million.

Using the OMAFRA numbers, the purses in 2011 were $244 Million so the shortfall is actually $134 Million.

Nowhere does it say that the government is going to add anything to these numbers. Really what the OMAFRA report and Snobelen in countless interviews is saying is they will reduce the HIP by $17 Million and racing has to generate its own purses without any SARP money.

Someone correct my numbers and show me the guarantee from the government or how these funds will go to purses. We don't know what deal is being offered to the tracks for operating expenses since the paramutuals are not part of it. How much are they offering and where is that money coming from? Are the tracks going to keep their 10% from slots and it is just horse people that lose their money? SARP as we know it is coming to an end but maybe there is a new agreement for the tracks who host slots and they just call it something else. We don't know because it is secret.

Why isn't anyone asking these questions directly?

Georg Leber-ICR RACING

We sit in limbo while "they" are going to announce "towards the end of the week" what our race dates and purses will look like for April 1st ---Fools' Day with us being fooled again and again. Meanwhile, owners have mares to breed--or not--stakes to pay into--or not--and just trying to stay up and running until these well-paid (with perks) folk play at keeping us quiet and content with their bits and pieces that they are throwing out for us. More of the same old. How long can we exist like this?

Snobelen is out of touch, and the industry is riding on him and OMAFRa. What a shame!
Historical racing takes away from live racing.Slot players don't want tothink - they just want to push buttons and watch spinning wheels.
Dealing with the CPMA (bureaucrats)takes years. Their reaction time to anything is usually at a snails pace - time is running out.
And finally, getting money from the general fund is a SUBSIDY - is that what we want?
We don't need leaders like this - we need a vigilante!!!!!

confusion reigns and that's the way the government wants it everything done behind closed doors and the more Mr.Snobelen speaks the more you realize this panel doesn't have any input into what will really happen & seriously do they have a clue?

WHY is the government allowing the OLG such an incredible abundance of pushing and deleting power within the gaming sector, especially with regards to horse racing?

The OLG's modernization strategy includes one point with regards to horse racing:

"OLG’s slot machine business is tied to racetrack sites, limiting options for new gaming locations, although racetracks are not necessarily near where customers live."

If the OLG would set aside their agenda and work with the horse racing industry, they would have the ability to create a multi-plex venue that would incorporate all facets of gaming. Customers will travel if the entertainment value is there-How does NASCAR get 65,000 people to the middle of the desert for a race in Phoenix? This too would allow the horse racing industry time to become a sustainable product on their own.

The OLG also has a sponsorship program which supports Ontario communities:

*Community music festivals or significant local festivals and events
*Civic, stakeholder and business-community related events in communities with
OLG operations

Why not incorporate this strategy within the horse racing community? How many racetracks have adequate infields to support this agenda? It would earn media, patrons and sponsors could return annually, it would incorporate their geographic market as far as their gaming sites, would target a young adult fan base beneficial to the racing industry, while at the same time garnering future sponsorships and investments for the racetracks.

Working together for a stronger Ontario-Is that not the point?

How would these 3 guys that no little to nothing about Horseplayers know what fits the profile of the bettor?