General News

OHHA PRESENTATION TO GOVERNMENT

By July 29, 2020 No Comments

Our next presenter is the Ontario Harness Horse Association. Please state your name for the record. You will have seven minutes for your presentation.

Mr. Jim Whelan: Good afternoon. My name is Jim Whelan. I’m president of the Ontario Harness Horse Association. My general manager is Brian Tropea, and he will be doing the presentation on our behalf.

Mr. Brian Tropea: The Ontario Harness Horse Association is referred to as OHHA. OHHA was established in 1962 to represent participants in the standardbred racing industry. Grooms, breeders, trainers, drivers and owners rely on OHHA to make formal submissions to governments at all levels to ensure that their concerns are heard. OHHA has members from all across Ontario, participating in all aspects of the industry.

Horse breeding and racing is a multi-billion dollar industry in Ontario and employs approximately 35,000 people. Horse racing touches all three pillars of the Ministry of Tourism, Culture and Sport. It also has linkages to the Ministry of Finance, the Ministry of Labour, the Ministry of Agriculture, Food and Rural Affairs and the Ministry of the Attorney General.

When we talk about culture—horse racing is over 250 years old. There’s documentation of the first horse races being conducted 100 years before Confederation. Racing has survived through two world wars and the Great Depression.

Ontario is known to produce world-class athletes, and horses are imported and exported to countries around the world, like Britain, Ireland, Australia, New Zealand, United States and others. Some of the greatest racehorses in our history were bred, owned, trained and driven by Ontarians. Ontario has often been looked at by other jurisdictions as a world leader, and successful programs like the abandoned Slots at Racetracks Program, which was beneficial to both the government and the racing industry, have been copied with great success in many jurisdictions in the United States.

Horse breeding, training and racing is a team sport. From the owner, the broodmare sires and the resulting offspring—the owner is comparable to the owner of a sports team. That team requires caretakers, trainers, vets, vet assistants, blacksmiths, massage therapists, chiropractors, dentists, agricultural product producers for grain and hay, horse transporters and many others.

The successful owner in the horse racing industry is the owner who surrounds themselves with the best supporting service providers, all of which are tremendously important to the success of the horse and therefore the team. Horses are bred and trained to compete and, based on bloodlines, confirmation and training, an owner can increase the probability of success by assembling a team that excels in all of those areas. As a sport which is an athletic endeavour, there is no question that horse racing requires two athletes: the horse and the driver or, in the case of thoroughbred or quarter horse racing, the jockey.

Often when a racing team comes to operate in Ontario, most if not all of the support team are residents of Ontario, providing much-needed employment in the rural areas of our province. Ontario farmers supply the grains and forage, and local professionals offer the health care services that horses require. There is an obvious positive spinoff effect on the local economies.

When we consider tourism, horse racing attracts fans and participants from around the world. When foreign horses race in Ontario, they’re often resident in the province for months at a time. When those horses compete in races in Ontario, often their foreign owners travel to Ontario to witness the race live. There’s nothing that compares to the live racing experience with a horse that you’ve owned and developed and watching it compete.

Unfortunately with COVID-19, racing was completely shut down on March 19 of this year. While caring for the horses was determined to be an essential service, our members were required to tend to the animals on a daily basis. Some trainers decided to lay off their horses and some caretakers were temporarily laid off. As well, since those horses were not training, they also required less care from blacksmiths, veterinarians and other essential service providers, ultimately reducing the income from those that practise in those professions.

Ultimately, what drives the entire industry is prize money, or what we refer to as “purse money.” Without the ability to race for purse money, owners were still required to pay for the training and boarding of race horses but had no mechanism to earn funds to offset those costs. Because of the funding model for horse racing in Ontario, purse money is guaranteed at a certain level, and because of this, the industry was able to—

The Chair (Mr. Amarjot Sandhu): Three minutes.

Mr. Brian Tropea: —use some of those allocated funds to assist the owners during this period. The assistance covered only a portion of the costs incurred by the owners, but it was certainly appreciated and helped weather difficult times.

Now that racing has been given the go-ahead to resume, we are operating in a different environment. Horse racing is being conducted across Ontario but without fans. That includes those foreign owners that might have attended during normal times. Racing receives a substantial amount of revenue through wagering on the races. Wagering has been available to wager online for decades, but was offered as a convenience and was never supposed to replace the wagers that occur live at the racetracks. In fact, the live wager is the most profitable wager for the racing industry because you eliminate a lot of the costs that go with the online product.

Now all tracks are solely dependent on the online experience, and many tracks are trying to catch up to offer an entertainment experience online that could compare with the live experience at the track. While most of the smaller racetracks in Ontario have a limited budget to upgrade their product, this is an area where the ministry could assist in sharing some of those costs and ensuring that Ontario racing products are amongst the best in the industry.

OHHA believes that the racing industry and our racetrack operators have demonstrated that they can offer racing in a safe, responsible manner while still being mindful of the need to practise social distancing and good personal hygiene. As the next step to reopening the racing industry, OHHA believes that participants in the industry should now be allowed to attend the races and that fans can return in due time. OHHA proposes that all individuals licensed to participate in racing by the Alcohol and Gaming Commission of Ontario, should now be granted access to the grounds of the raceways on race days, providing that they respect the individual racetrack’s COVID protocols.

The Chair (Mr. Amarjot Sandhu): One minute.

Mr. Brian Tropea: This would ensure that there’s a robust contact tracing system as every individual would have their AGCO licence recorded upon entry to the facility. Through those licences, individuals could be identified and contacted without delay.

OHHA appreciates that these are very trying times and that everyone must proceed with continued caution. We thank everyone who has worked at getting business in Ontario back and running, and we’re thankful to be back racing horses. There’s no truer saying than, “You don’t miss something until it’s gone.”

Mr. Jim Whelan: Thank you.

Mr. Dave Smith: My question is for Jim Whelan. It’s good to see you again, Jim. As you know, Kawartha Downs is just south of Peterborough, maybe a stone’s throw away from my office. Looking at harness racing itself, it’s one of the few competition sports where you can actually have the competition and adhere to social distancing.

If you recall, back in the early 2000s when we had the hockey strike—the lockout back then—that’s when ESPN and TSN started picking up the World Series of Poker. Do you think that there could be an opportunity then for the smaller tracks to have their content broadcast on things like TSN, Sportsnet, ESPN and so on and pick up a whole new audience that they wouldn’t have had otherwise?

The Chair (Mr. Amarjot Sandhu): One minute.

Mr. Jim Whelan: Hello, Dave. It’s great to see you again and talk to you, and all you guys, Percy, Lisa, Norm, everybody. We miss you at all our events.

Specifically, Dave, TSN has picked us up on Thursday nights and we have two hours of live racing on TSN for thoroughbred and standardbred racing. So I know there’s huge opportunity for us to do that. I’d just like to speak to that. Percy, certainly, helped [inaudible] and he’s been a great supporter to us. Percy’s got a history of growing up around Windsor and horse racing; a great fan, Percy Hatfield. And Norm, also, is familiar with our racing.

We’re one of the most labour-intensive industries in agriculture in Ontario and Canada because you can’t automate the horse care. They’re athletes, and they have to be cared for seven days a week. So jobs are very important to our industry.

The Chair (Mr. Amarjot Sandhu): Thank you. Sorry to cut you off. We’ll have to move to the opposition members for their time. I’ll start with MPP Hatfield and then MPP Miller.

Mr. Percy Hatfield: Can you hear me okay?

The Chair (Mr. Amarjot Sandhu): We can.

Mr. Percy Hatfield: Thank you. I’d like to go back to Jim Whelan and Brian Tropea, if I could. Hi, guys.

I want you, if you would, to let the committee members know—you talked about the equipment that would have to be upgraded at some of the tracks. If we can use Leamington, for an example—a small track, about 13 race dates a year—what would Leamington need technologically in order to compete during a COVID-19 epidemic? What kind of upgrades? What would we expect for a small track such as Leamington?

Mr. Jim Whelan: Percy, thank you very much. It’s great to see you, and thanks so much for all your help over the years.

We have all the technology in place. We have high-definition cameras and the technology to send that signal anywhere throughout the world, literally. It’s all done through Woodbine Entertainment Group, WAG, for those that aren’t familiar with the term. Leamington has the ability to send their signal anywhere in the world and certainly throughout Ontario. It’s just a matter of whether Woodbine Entertainment, WAG, would accept their product and put it out there for people to bid on it.

As you know, Leamington, being a small track, had the highest per capita bet of any province in Ontario in the last four years. They do an exceptional job of putting on a live show and entertainment.

Like I say, horse racing is one of the most labour-intensive industries left in agriculture. Jobs are very important and horse racing creates a lot of jobs for odd-skill labour. A lot of our people aren’t skilled to work in other industries. It provides a great economy for the province. These people work in looking after horses because it’s their passion and love. It’s a chosen profession. It’s not for the great hours and pay they get, but they love it, and it makes them very productive people in society. Horse racing in that aspect, and to the agricultural industry, is very, very important.

We have the technology to do all that, that you’re referring to.

Mr. Percy Hatfield: Okay, good. Thank you.

Brian, were you going to add something?

Mr. Brian Tropea: Yes, I was just going to add that we can all send our signal out; what the racetracks need to do is up their game a little bit. There needs to be something in between races. Currently, most tracks send out their live race and a replay, but there needs to be an entertainment aspect now to keep somebody engaged for two or two and a half hours while the races are going on. That is going to require a few extra cameras and a few extra personnel.

Based on the current funding model for the industry, all those small racetracks basically have a set amount in their budget and there’s no extra money for them to do these types of things. If there could be some extra money through tourism that could go to some of those smaller racetracks to assist in the funding of upgrading the product that we send out, I think it would be extremely helpful for those smaller racetracks.

Also, if the ministry could help in spreading the word about live racing in the province, I think that that would be helpful as well.

Mr. Paul Miller: Hi. I’m directing my question to Jim and Brian. How are you doing, guys?

Mr. Jim Whelan: Paul, it’s great to see you.

Mr. Paul Miller: How are you doing?

Mr. Jim Whelan: Good, good. You look great.

Mr. Paul Miller: I know, Jim, there have been problems with purse disbursement amounts and also the number of racing dates throughout the harness racing industry in our province. I’m well aware of the problem you have with Woodbine, where they’re changing over to more gambling situations, casino type of situations, and kind of pushing the harness racing out. Especially with COVID-19, that’s going to have an additional negative impact on the racing industry in the province.

Are the purses based partially on gate receipts, and does a percentage of the purse money go to the racer? That’s one question. Obviously, if you don’t have enough people in the stands, that could have a negative impact on, of course, the wagers. Moving forward, do you and Brian think that some investment in the industry—serious investment in the industry—could bring us back to a level pre-COVID, pre-downturn in the industry as a whole, to a point where it would become lucrative again and bring back our good history in the industry and jobs, and help our economy come back even faster?

Mr. Jim Whelan: Yes, the answer is absolutely. I mean, right now—horse racing was always self-sustaining in Canada.

The Chair (Mr. Amarjot Sandhu): One minute.

Mr. Jim Whelan: We’re funded by people who bet on races. A percentage of the bet went to fund the purses and the racetracks, and the same with the Slots at Racetracks Program. If you went to a racetrack and you played the games there, machines, a portion of that went to fund the racetrack. So it was never taxpayers’ money. Right now in this new program, we’re on a subsidy. It doesn’t matter how much they bet; if the bets were to quadruple in Ontario, our purses don’t improve any, so we’re limited. There’s nothing built into this long-term funding program to account for inflation, so our purses can only go down.

There’s lots of options for our industry to improve. As you know, Paul, our industry is one of the most labour-intensive parts of agriculture. You cannot automate horse care. They’re athletes and have to be cared for seven days a week. They have to be fed, watered and cared for, and they have to be exercised. It’s a very labour-intensive industry. But there are many options to provide for and re-establish horse racing to what it was, at no cost to the government. That’s the amazing thing.

Mr. Paul Miller: Thank you.

The Chair (Mr. Amarjot Sandhu): Thank you. Sorry to cut you off. We’ll start the second round with the government side. I’ll go back to MPP Smith.

Mr. Dave Smith: Jim, I’m going to come back to you again on it. The reason I’m going to hit you again on this one is I look at the CFL. They had huge popularity in the 1970s and 1980s, and then they went to blacking out a lot of their games if the stadium wasn’t sold out. They had a significant drop in their viewership and their gate sales as a result of it. It’s taken them probably 20 years to recover from that now.

I take boxing as another example. Boxing is probably a closer example to horse racing because it’s the same type of set-up, where the amount of money that’s spent gambling on boxing has been huge; but boxing went to pay-per-view, and again, we lost a whole generation of boxing fans.

What we’re seeing right now, what I’m hearing on boxing, is that the boxing fans are my age or older, and I’m 50. So they have started—Bob Arum in particular—a program now where he’s got Boxing After Dark, he’s got boxing going on, and they’re doing it at the MGM. At the moment, there are no fans at it, but it’s broadcast every Tuesday and Thursday. What he said in an interview was that they’re trying to rebuild that viewership base. They were short-sighted in doing it by pay-per-view all of the time. Yes, they made big, big money on the big-name boxers, but they lost a generation of boxing fans and they don’t have the same number of big-name people coming up from behind.

So I’m wondering: Is this really an opportunity to change the whole layout of how horse racing is and go to more of that content on television that generates additional revenue for you, and can then also increase the purses and build from that grassroots up so you’ve got a young base of people who are excited about watching horse racing? Let’s face facts: There are some races that are very exciting to watch.

Mr. Jim Whelan: The simple answer is absolutely yes. The love and passion for horses and horse racing is always going to be part of the industry here and part of our culture.

We can modify ourselves. We can race 24 hours a day. In Windsor—and Percy would remember this—we had a post time at 12 o’clock at night to accommodate the Hong Kong market. The horsemen will do anything—race at any time of the day and night—to maximize the parimutuel handle.

The problem in Ontario now is, if the betting was to quadruple, we do not benefit as horse people. We’re on a fixed subsidy that can only decline. The big problem for you guys as politicians—and we talk regularly—is that people presume that if racetracks are functional and being looked after, then the industry is. Racetracks are simply the stage for the performance.

The Chair (Mr. Amarjot Sandhu): Three minutes.

Mr. Jim Whelan: All the talent—the actors, horses, breeding, training and the work that goes into developing a horse and putting them on the racetrack to race—that’s where all the huge investment in the province is: $2.6 billion annually into the Ontario economy. That’s where that comes from, for a couple of minutes of race time on a racetrack. People have to realize that there’s a huge investment that goes into providing horses.

We became a global leader in horse racing. Our horses can be exported all over the world. We have the best-quality horses of all breeds: thoroughbreds, quarter horses and standardbreds. We can ship them all over the world and there’s a great market for them. There is still a huge potential; it just has to be managed by horse people.

What has just happened in the past since 2012, and with the OLG sole-sourcing the horse racing to Woodbine Entertainment, to a bunch of individuals who don’t understand the industry and have no vested interest in it, is the people—the breeder associations, the owners and the trainers—have no say whatsoever in the industry. It’s run by a group that doesn’t understand horse racing. If that can be modified very, very easily to turn this industry back into what it was—Ontario was a global leader. In Ontario, we competed with the US. It’s not like Canada versus US. Some 65% of our racing was done in Ontario. With a country that has roughly 40 million people, we were competing with a country that has over 300 million people. We were very, very competitive here in Ontario, and still are.

These people hung on—myself included; I’m a fifth-generation horse person and a farmer—because of the passion and love for horses and the industry. A lot of our people are not employable in other industries, and it’s a huge, labour-intensive industry. They do it for the passion and love of horses and competing, not for the great wages we get or the benefits.

So what you’re saying is easily doable.

The Chair (Mr. Amarjot Sandhu): One minute.

Mr. Jim Whelan: I always say that if the government is willing to do it, it can be done. If the government doesn’t want to do it, you’re kind of wasting your time. What you’re talking about can easily be done if there’s a willingness by the government to do it.

Mr. Dave Smith: Just as an anecdotal comment here: If any of the other members on here were curious whether or not people are watching this online, I just got a text message saying, “Stop talking about horse racing and start talking about car racing. Cars are faster.” Car racing doesn’t give that same level of excitement as horse racing does.

Mr. Jim Whelan: No, and there’s not nearly the economic impact.

Speaking of that, the CFL was looking for $150 million to support their industry.

I think they just got millions for car racing for Montreal for one race a year, to keep car racing going in Montreal. So you’ve got to put everything into perspective.

We’re a huge, huge agricultural industry. Horses are livestock. They have to be housed in barns and raised in paddocks.

Mr. Stephen Blais: Just some questions to start, and thank you, everyone, for your presentations.

For the harness racing association: As a municipal councillor, I represented a largely rural area, many horse farms. Obviously with Rideau Carleton Raceway in Ottawa, the harness racing is very familiar territory in our region. I agree that there is enormous spinoff from the industry: farriers, blacksmiths, vets, everything that you mentioned in your presentation. Has the association ever done an economic analysis of what that spinoff is, either provincially or region by region?

Mr. Jim Whelan: The answer to that is absolutely yes. We’ve had Dr. Brinkman from the University of Guelph. We have an industry association that’s called Ontario Racing now. It used to be called OHRIA, the Ontario Horse Racing Industry Association. In the early 1990s or 1980s, they were supposed to do these studies. We did a few ourselves because they weren’t doing them.

But yes, it’s amazing the impact as our purse has increased to $100 million in the first two years of the Slots at Racetracks Program. People bought farms and they upgraded the farms, myself included. They built new barns, bought breeding stock, and we built fences. We reinvested all our money in the industry with the hope that this was the long-term program. It created a lot of jobs and a lot of economy for the province of Ontario. We had people coming here literally from all over the world, from Europe, from Australia and New Zealand. They bought property and established breeding farms and racing farms and so on.

So that was the intention—and myself included. I’m typical; I’m from a five-generation family of horse breeders and racers. That’s all I’ve done since I finished school, is breed, train and race horses. As long as I felt there was an opportunity to pay my bills, I would reinvest money; as long as I felt there was an opportunity to earn money to pay my bills, basically, my mortgage and—

Mr. Stephen Blais: Sure.

Mr. Jim Whelan: So we reinvested in assets, literally. That is something that’s good for the economy and good for the province. It creates jobs for municipalities and for the whole province of Ontario.

Mr. Stephen Blais: I appreciate that. If you could dig up that analysis and share it, that would I think be very helpful as we move forward.

You mentioned bringing racing back without fans, essentially, and there were some comments about putting it on TSN or putting it on the Internet etc. What would the industry need from government in order to do that? Is it a technology investment? Is it just cash to hire a provider? What would you need?

Mr. Jim Whelan: It doesn’t require even a lot of cash. The technology is there. We have the technology. We have the infrastructure in place, so HPI, horse racing interactive betting. TSN is a great promotional thing at this point, but you can go on several sites any day of the week on your computer or on your phone—

The Chair (Mr. Amarjot Sandhu): Three minutes.

Mr. Jim Whelan: —and you can bet on races from all over the world. So you can bet on all the races in Ontario or across Canada, and the revenue should go back. But under the new formula in Ontario, the revenue from betting does not go back into horse racing. We’re on a complete subsidy. Like I say, there’s no incentive for a racetrack to promote racing right now. That model has to be changed if the industry is going to sustain itself and grow. It’s not complicated. It may sound complicated, but it’s not.

IN CONSIDERATION OF THE BENEFITS OF MEMBERSHIP

(a) I agree to abide by OHHA's constitution and by-laws and appoint and grant OHHA the right to act as my sole and exclusive agent and representative for the purposes of negotiating and executing contracts with all racetracks in the Province of Ontario and executing agreements relating to racing with any other group, body or association and I assign and transfer to OHHA, during the time I am a member, all my intellectual property rights, throughout the world, including copyrights, personality rights, and any causes of action related thereto, that I may own, arising from or related to my racing activity.

(b) I agree and consent to the terms of the Privacy Agreement of the Ontario Harness Horse Association, a copy of which is published on the Ontario Harness Horse Association's website and available to me in print on request.