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Dealtown Casino Hotel and Retirement Village Initiative

Renegade Liberal Offers Solution to Controversial Slots-at-Racetrack Program…

Dealtown, Ontario – March 4, 2012… The board of directors of the Dealtown Casino Initiative unanimously approved a proposal from Chairman, Brian Keenan, to incorporate a Super-Track Plan (STP) into current design and thinking for the Dealtown Casino Hotel & Retirement Resort in Southwestern Ontario.  Chatham-Kent’s mayor, Randy Hope, and local Conservative MPP, Rick Nicholls have met repeatedly with Keenan to discuss the proposal.  Both support any plan that would transform the deserted Southwestern Regional Centre (SWRC) in Dealtown into a bustling resort that would provide more than 3,000 new jobs to economically devastated Chatham-Kent.

Keenan says, “The idea to add a super racehorse track to the Dealtown Casino plan came to me after reading all the horse manure being flung by the Ontario Liberal government and the Ontario Horse Racing and Breeding industry over the antiquated and controversial OLG Slots at Racetracks program.”  Don Drummond, in his Drummond Report, identified this agreement and several others areas under the domain of the Ontario Lottery and Gaming Corporation (OLG) as areas that could, and should, be changed if the Minister of Finance, Dwight Duncan, was going to “maximize profits” from the gaming industry in Ontario.

There is no disputing that the 10 year old OLG Slots at Racetracks program is broken and seriously flawed. Most of the 17 agreements have recently expired and unless someone at OLG seriously screwed up, those agreements have not yet been renewed since everyone at Queens Park and OLG were anxiously awaiting the Drummond Report before making any changes. During the initial 10 year term, more than $3.5 billion dollars was doled out to the Racetracks and Horse People; as the two groups are referred to by OLG. An additional $600+ million was paid directly to the municipalities in which the 17 racetracks are located.

The first and most serious flaw deals with the nearly equal payment of 10% to both the Racetracks and Horse People of the slot machine revenues at these sites. The payments to the Horse People appears to have been used, as intended, to improve the breeding stock in Ontario and to support race purses at these tracks which in turn helps attract quality breeders to our province to share in the race purses. This was confirmed in the 2008 report to the Minister of Government and Consumer Services that dealt with the strategic vision and direction for the Ontario Horse Racing and Breeding industry. This same study confirmed that the payments to the Racetracks (owners and operators) seriously lacked any controls or accountability to OLG. Therein is the $1,750,000,000 problem!

The second flaw in the current slot program was the belief and anticipation that locating the slot machines at these racetracks would somehow attract an increasing number of people to the track when the horses were actually racing. Unfortunately, almost the opposite happened in that the people, who were attracted to the slots, seldom, if ever, take in the horse racing which in itself is seasonal. They come to the track, morning, noon and night 365 days a year for the sole purpose of playing the slots. If the slots were relocated to another more convenient location in these same communities, as the Drummond Report suggests, slot revenues to OLG from these 17 locations would most certainly increase; and in all likelihood double or even triple.  

For those unfamiliar with horse racing, you should understand that the 17 racetracks involved with the OLG Slot Program operate an average of only 88 days each year, with 9 tracks open for racing less than 88 days and 4 of these 9 operating less than 30 days a year. You should also know that there is more money spent playing Bingo than there is being bet on pari-mutual wagering in Ontario.

The light went on after talking with Ontario racehorse owners and trainers and listening to the pleading by the Ontario Horse People to save the nearly 60,000 direct and indirect jobs associated with this largely rural based industry! Keenan believes that there is a Win, Win solution that can save all those jobs, put millions, if not billions, into Finance Minister Duncan’s deficit reduction bank account, and put another 3,000+ unemployed people back to work in Chatham-Kent and an equal number in several of the other Super-Track centers.

Here are the key recommendations of Keenan’s Super-Track Plan:

1.      Terminate the Racetracks (owners and operators) subsidy currently paid to all 17 locations which amounted to $170 million last year and approximately $1.75 billion since the program started. If that money was used to improve the facilities at the respective racetracks then Ontario must have 17 of the finest tracks in the world and should not need further subsidies.  If past payments from OLG under the Slots-at-Track program were used to subsidize the operation of unprofitable tracks or line the owner’s pockets, as the finance minister suggests is happening, then the subsidies must stop anyway since the government can’t keep throwing good money after bad!

2.      Continue to operate the Slot facilities at the current 17 locations until the smaller tracks are closed because they will no longer be self-sufficient without subsidies.

3.      Continue to pay the Horse People 10% of the Slot revenue from the current 17 locations and expand the program to include additional slots added to the Super-Tracks equal to the number of slots currently installed at the smaller tracks that cease to operate.

4.      Allow the sponsor municipalities to relocate the slot centres to more suitable locations if the track closes or if a move might generate more revenue for the community, the Horse People and the government through its OLG arm.

5.      Designate the three race tracks that currently operate more than 150 days a year as Super-Tracks (Woodbine, Rideau and Flamboro).

6.      Build a forth Super-Track at the proposed 250 acre site of the Dealtown Casino that would provide service for Horse People if and when the tracks in Windsor, Sarnia, Dresden, Clinton and London close for economic reasons. 

7.      Add additional days of track operations at the Super-Tracks to support closure of the smaller tracks in their respective regional areas.

8.      OLG should offer the current Racetrack Owners & Operators loans to transform the tracks that close and submit redevelopment plans for their facilities.

To help you better understand the economics of this proposal, you must understand some of nit-ti gritty stuff.  For example, the owner/operator of the small racetracks in Windsor, Dresden and Woodstock received an estimated $78 million over the past decade under the slot program while the numbers for London’s Western Fair exceeds $100 million during the same period.  If the Keenan’s proposed plan is implemented, the Horse People will see an increase in revenue to support their industry!  OLG will contribute an additional $200+ million a year toward the current deficit.  The new Dealtown Casino and Super-Track will be built entirely by private investment and yet contribute nearly as much as the other major Ontario casino’s to the government treasury.

Now doesn’t that sound like a winning proposition for everyone? But more importantly, it will pump several hundred million of capital construction into Southern Ontario.  It will create over 3000 new jobs in Chatham-Kent and the surrounding municipalities! It will increase the tax base in CK and thus lower our property taxes.

Imagine, this is all possible because an economist named Don Drummond was asked to point out what the government could do to reduce its deficit without reducing the level of health care, education and other services that the folks in Ontario need. 

Thank you Mr Drummond!

By Brian Keenan, Chairman

Dealtown Casino Initiative

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