The prevailing theme of the Drummond report could be stated as “Let’s all be rational from now on.” It is solid technocratic work, though it is by no means advocating a government of technocrats as in Italy or Greece. Yet Mr. Drummond enjoys pointing out that Greece’s public finances were as sound as Ontario’s back in 1984. The main message is that the right things can be done – and that eventually things could get much worse, if not attended to now.

The Globe And Mail – Solid, technocratic advice in Don Drummond’s report

Don Drummond deals with the horse racing industry in the province of Ontario in 2 separate Chapters – Chapter 11 – Business Support and Chapter 17 – Government Business Enterprises.

From the hue and cry coming from the harness sector in Ontario you’d think he’d have used the infamous American Chapter 11.

Chapter 11: Business Support

The horse racing industry is another area where subsidies to racetracks and horse people require a review and adjustment to realign with present-day economic and fiscal realities. Ontario has more racetracks than any other jurisdiction in the U.S. or Canada. In addition to revenues from wagering, since the late 1990s the industry has benefited from a provincial tax expenditure (a reduction to the provincial pari-mutuel tax) and a percentage of the Ontario Lottery and Gaming Corporation’s gross slot revenues that together are worth an estimated $400 million in 2011–12. Over the past 12 years, approximately $4 billion has flowed through 17 racetracks to support purses, racetrack capital improvement and operating costs. Ontario’s support is 10 times that of British Columbia, which has six racetracks, and 17 times that of Alberta, with five racetracks. Ontario’s approach is unsustainable and it is time for the industry to rationalize its presence in the gaming marketplace. For more on the horse racing and breeding industry, please see Chapter 17, Government Business Enterprises.

Recommendation 11-11: Review and rationalize the current provincial financial support provided to the horse racing industry so that the industry is more appropriately sustained by the wagering revenues it generates rather than through subsidies or their preferential treatments.

Chapter 17: Government Business Enterprises

Ontario Lottery and Gaming (OLG)

The OLG provides significant net income to the province, but operational efficiencies could be explored to improve the company’s margins while continuing to respect social responsibility and meet its conduct and management requirement for the operation of all lottery schemes. For example, a number of questionable business practices should, at a minimum, be reviewed from a value-for-money perspective.

• OLG maintains two head offices, one each in Toronto and Sault Ste. Marie;
• OLG continues to operate Casino Niagara despite the opening of the permanent and
considerably larger5 Niagara Fallsview Casino Resort in 2004;
• The Slots at Racetracks Initiative, which allows slot machines to be co-located at racetrack facilities only, earmarks a share of revenues generated from slots for racetrack owners and horse breeders. This amounted to $334 million in 2009–10.6 Municipalities that play host to a racetrack also receive a share — five per cent of proceeds from the first 450 slot machines at the facility and two per cent for each machine over that. This totalled $78 million in 2009–10,7 and
• OLG purchases and provides lottery terminals to point-of-sale locations.

Finally, OLG should continue to seek new and innovative ways to deliver gaming in Ontario to increase its revenues. These include expanding existing business lines, creating new business lines (as it is doing for Internet gambling), and leveraging further private-sector involvement. In all such ventures, the OLG must remain mindful of its mandate to promote responsible gaming.

Recommendation 17-3: Improve the Ontario Lottery and Gaming Corporation’s efficiency through, at a minimum, the following measures:

• Close one of the two head offices;
• Close one of the two casinos in Niagara Falls;
• Allow slot machine operations at sites that are not co-located with horse racing venues; and
• Stop subsidizing the purchase and provision of lottery terminals to point-of-sale locations and begin to introduce other points of sale for lotteries.

Recommendation 17-4: Re-evaluate, on a value-for-money basis, the practice of providing a portion of net slot revenues to the horse racing and breeding industry and municipalities in order to substantially reduce and better target that support.

Recommendation 17-5: Consider directing the Ontario Lottery and Gaming Corporation to expand its existing business lines, develop new gaming opportunities and make effective use of private-sector involvement.

Emphasis added.

If you don’t have a life or you need something to prop up the couch, here’s the link to the full report:

COMMISSION ON THE REFORM OF ONTARIO’S PUBLIC SERVICES (Drummond’s Report)

Drummond’s report is reminiscent of many of the handicapping books I’ve read. You’ve heard most of the stuff before and there’s no real get-rich-quick plan laid out, but the means are there for those who wish to put in the effort to take them. Unfortunately, Drummond’s report will also most likely suffer the fate of so many of the Federal Government’s White Papers – political Bullshit leaves too many brown stains.

If you’re a harness fan , better stop reading this section right now or you may want to drop Phil from your Christmas card list.

Beware the Entitlement Mentality

Doesn’t matter if you’re in New Jersey or Alberta, governments, other industries, other public sectors and other private sectors cast covetous eyes on the slots and gaming revenues that horse racing receives. Horse racing must remember that the best argument for continued allocation of slots and gaming revenue is wise use.

Bloodhorse – LaMarra – Report Helps NY Racetrack Casinos Make Case

Bloodhorse – Mitchell – Instant Racing Expands as Popularity Grows

Bloodhorse – Precious -NYRA Proposes More Pari-Mutuel Wagering

Bloodhorse – Kieckhefer – Brighter Days on Illinois Racing Horizon?

Bloodhorse – LaMarra and Mitchell – KY Legislation: Up to 5 Racetrack Casinos

Lexington Herald-Leader – Former governor, horse breeder Jones says he can’t support gambling bill

Bloodhorse – LaMarra -PA Horsemen Blast Plan to ‘Raid’ Slots Fund

Bloodhorse – LaMarra – Report: Horsemen Intend to Operate Monmouth

Bloodhorse – LaMarra – Racing-Related Funds Targeted in MD, PA

NY Times – Bagli – Rivals Ready Onslaught to Sway Casino Debate

NY Times- Pogrebin – Let’s Raze Javits Center (but First Finish Renovations)

Thoroughbred Times – Nevills – Western states hit hard by industry contraction

“Woodbine Entertainment Group is the engine of the Ontario horse racing industry—an industry which in 2010 was responsible for approximately 60,000 jobs and over $2 billion of expenditures annually,” WEG president and chief executive officer Nick Eaves said. “WEG is very proud of its partnership with the Province of Ontario.

“WEG entered into a contract with the Ontario Lottery and Gaming Corporation in 1999. WEG has invested significantly in providing the venue, the infrastructure, and many of the support services for the OLG’s slots-at-racetracks operations at Woodbine and Mohawk. The result has been a fantastic partnership which has generated significant revenue for the Province of Ontario.

“WEG is committed to working with the province as it undertakes this review of job creation and economic growth.”

Bloodhorse – LaMarra – Ontario Official Targets Racing’s Slots Money

The harness sector in Ontario’s reaction to the Drummond report made Chicken Little look like a sage, but from WEG’s comments it sounds like WEG has anticipated and are already preparing for the changes to the revenue sharing agreements with the province of Ontario.The bush harness tracks in Ontario, those leading the hue and cry to protect their vested interests, felt Rod Seiling’s ORC’s clippers the last couple of years, now they better be prepared for Duncan’s shears.

WEG’s not going to encourage their members to drive their sulkies down to Queen’s Park in protest, but Phil will assure you that WEG has and will be working diligently to protect its stakeholders interests.

Read Drummond carefully and he’s not advocating that the 20% split of slot revenues presently going to the horse industry be terminated immediately. He’s advocating a re-evaluation on a value-for-money basis of what he calls an unsustainable subsidy. From the small town harness sector’s reaction Phil concludes that they want to maintain the status quo and must perceive that they can’t deliver value-for-money.

Drummond’s other main advocacy is an increase in slots and gambling in Ontario. Is the Ontario harness sector fearful that they can’t compete. From WEG’s comments WEG appears ready, willing and able to take on the challenges and opportunities that competition and an opening of the gambling industry in Ontario will bring.

Smaller percentages and more competition will only be the death knell of the harness tracks that can’t compete by providing value-for-money.

National Post – Simpson – Alberta’s golden goose, Ontario’s dead duck

The National Post’s Simpson may be touting Alberta’s Golden Goose, but when 2016 rolls around the Alberta horse racing industry’s will be cooked. The Alberta government hasn’t hired Don Drummond, but Deputy Premier Doug Horner already set the stage with his recent comments on zero based budgeting.

Calgary Herald – Kleiss – Spring session to open with zero-budgeting bill

If you think that when it comes time to re-evaluate, any Alberta provincial government will find the 51% of slot revenues presently being allocated to Horse Racing Alberta value-for-money and sustainable, put your rose coloured glasses back on, climb back onto your sulky and head on down to Alberta Downs. Make sure your helmet’s on tight as the little grey matter you’ve got left needs protecting.

Phil’s going to use the Drummond value-for-money criteria in re-evaluating and suggesting his opinion for solutions for the horse racing and gaming industry problems in Alberta.

HRA has had an office in Calgary for years. Does having 2 offices make sense on a value-for-money basis: No. Solution: close the Calgary office since there’s no racing there.

Does having a casino in a city the size of Camrose make sense on a value-for-money basis: No. Solution: close it.

Does having a casino in a city the size of Whitecourt make sense on a value-for-money basis: No. Solution: close it.

Does taking over $1.5 million from the slot revenue at Edmonton Northlands to operate a bush track in a sloughbed outside Lacombe, where there are no slots, no VLTs, no OTB and the handle does not even equal the purses paid out make sense on a value-for-money basis: No. Solution: close it.

Does taking 7 OTBS from the revenue stream of the lone A track in the province of Alberta make sense on a value-for-money basis: No. Solution: Turn all the OTBs in the province of Alberta over to Edmonton Northlands.

Does providing purses and breeder’s bonuses for 50 days of B track thoroughbred racing at Rocky Mountain Turf Club in Lethbridge make sense on a value-for-money basis: No. Solution: 25 days racing, no breeder’s bonuses to B track horses and shift monies to thoroughbred purses and breeder’s bonuses at Northlands Park.

Does paying $250k per annum to a CEO whose CV suggests she does not have sufficient time to devote to the required duties as CEO of Horse Racing Alberta during a period where the industry’s on life support make sense on a value-for-money basis: No. Solution: Replace her.

Does HRA having a marketing division that has accomplished zilch over the last 10 years make sense on a value-for-money basis: No. Solution: Dump it.

A few weeks ago the captain of the Costa Concordia was arrested when he abandoned ship without ensuring the safety of the passengers he had a duty to protect. Over at Horse Racing Alberta Captain HPHR and her first mate Max know the iceberg’s approaching fast and they’re making sure their own lifeboats will be well provisioned. Passengers be damned.

__________

Business is never so healthy as when, like a chicken, it must do a certain amount of scratching around for what it gets.

Henry Ford

__________

The times they are a changin

__________

Thoroughbred Times – Angst – Indiana impact: Opportunities for Midwest-based horsemen

Thoroughbred Times – Midwest Purses

Prairie Meadows – Iowa – $25,836 average purse.

Horse Racing Alberta should be ashamed.

__________

NY Times – Walsh – When a County Runs Off the Cliff

__________

Horse Race Insider – A Chance For NYRA To Give Back

__________

Competition is the keen cutting edge of business, always shaving away at costs.

Henry Ford

__________

Phil keeps being bombarded by persons asking about Century Casino building and operating the slots portion of the Balzac project. Century’s a public company with an excellent website providing updates on all their projects.

Century Casinos – Corporate

When you see the Balzac project on Century Casino’s web site, then you’ll know it’s a go. Until then keep them bullshit detectors working.

Phil was checking Century Casino’s Corporate Governance. Century Casino operates a number of casinos in North America, Europe and on the high seas with 5 members on their Board Of Directors. Amazing how efficient industry can get when it faces the scrutiny of shareholders concerned for their investment.

Who’s concerned for the investments of the stakeholders in the Alberta thoroughbred industry. Surely, not Shirley.

_______

A harmful truth is better than a useful lie.

Thomas Mann

__________

Waiting For The Great Leap Forwards

__________

Agriculture, manufacturers, commerce, and navigation, the four pillars of our prosperity, are then most thriving when left most free to individual enterprise.

Thomas Jefferson

__________

Thoroughbred Times – Terry Bradshaw to speak at Kentucky Race Track Chaplaincy fundraiser

__________

LA Times – Dufresne – Gary Carter was a local (paper) boy who made good

NY Times – Vecsey – A Star With a Smile, Forever Kid

__________

LA Times – DuFresne – L.A. has been involved with some real sports heartbreakers

__________

Things alter for the worse spontaneously, if they be not altered for the better designedly.

Francis Bacon

__________

LA Times – Tulich – Underground Rebel Bingo Club the new game in town

__________

Rebel, Rebel

__________

What’s right about America is that although we have a mess of problems, we have great capacity – intellect and resources – to do some thing about them.

Henry Ford

__________

“You can’t get around this transportation problem, but people don’t want to acknowledge that — it’s a really big problem that we’ll have to face,” said Michael A. Levi, a senior fellow for energy and environment at the Council on Foreign Relations. “The more you move to transmission lines that cross lots of states, the more you’ll have the same trouble as you did with Keystone XL.”

NY Times – Rosenthal – Drawing the Line at Power Lines

__________

Sydney Morning – Herald – O’Rourke – Stranded pay to get home

__________

National Post – Christie Blatchford: Smart judges better for justice than mandatory minimum sentences

__________

Of course, the NHL might very well take a sucker’s bet on Seattle, since a good sucker is both hard to find and a shame to waste. McGinn says he believes Hansen has a pathway to both NBA and NHL teams, which seems possible; the Sacramento Kings and the NBA-owned New Orleans Hornets both face uncertain futures, and the former has a March 1 deadline for a workable proposal for a new arena. In the NHL, Daly admitted in Ottawa that Phoenix is getting closer to the end.

National Post – Arthur – Seattle arena plan not necessarily bad news for Quebec’s NHL hopes

__________

Buyer Phoenix Coyotes Specifically, looking to buy raincoats, Starbucks gift cards and books about the history of grunge music. Why? Uh, no reason.

National Post – McIndoe – NHL trade deadline brings out the real buyers and sellers

__________

National Post – Leong – Chateau Laurier celebrates centennial with amnesty … so bring back that fork

__________

Hard Sun

Children of the Revolution

_________

Phil M Stockmen