Casino Negotiations Could Threaten Ontario Horse Racing Industry

Posted on: November 13, 2017, 04:00h. 

Last updated on: November 13, 2017, 05:05h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

A series of negotiations over the location and nature of casinos in Southwestern Ontario could have the unintended side effect of harming or even killing the horse racing industry in the province.

According to a report in the London Free Press, many in the racing industry are concerned over the potential for a casino currently at the Western Fair District to move away from that fairground, which could lead to a sharp drop in revenue for horse racing.

The local industry has been struggling to stay above water for the past five years, ever since Ontario cut the amount of slots revenue that flowed into racing by more than half. But some fear that future changes could have even more drastic impacts.

New Operator Cares About Casinos, Not Racing

The concern stems from the fact that the Ontario Lottery and Gaming Corp. (OLG) has recently licensed much of the region’s gaming industry to Gateway Casinos & Entertainment, a Vancouver-based company that is focused on casinos, not horses.

One of the casinos now operated by Gateway is located at the Western Fair District in London. The company has been demanding more favorable conditions for using the fairgrounds, which also hosts races with the second-largest purses in all of Ontario.

That could lead to two damaging scenarios. First, Gateway could negotiate a deal where they share even less of their revenue with the racetrack. Even worse, Gateway might decide to move the casino away from the fairgrounds entirely, which would likely mean the end of racing at Western Fair.

“Without the lease payments we cannot support live racing,” Western Fair District CEO Hugh Mitchell told the London Free Press. “We’re working with the government and Gateway to find a solution.”

Complex Negotiations Leave Outcome in Doubt

The outcome of the negotiations is difficult to predict due to the many parties who are at the table. Any decision will not only involve Gateway and Western Fair, but also the OLG and the city of London, which co-owns much of the fairgrounds.

Gateway is most interested in expanding the scope of the casino, whether that’s at the fairgrounds or not. They would like to add table games to the currently offered slots, and perhaps even build a hotel. This would require much more real estate than is currently devoted to the Western Fair gaming operation.

The current casino building is under a lease that lasts until 2020. Gateway either wants to see the cost of that lease reduced, or to buy land from the city and Western Fair. And while the company says it hopes it can coexist with racing, it is clear where their focus lies.

“We bid on a casino,” said Gateway spokesperson Rob Mitchell. “[It] has nothing to do with horse racing.”

Gateway has also said that their decision will ultimately be based on “good business sense.”

“You wouldn’t stay in an apartment with an exorbitant rent when you can better manage your finances and your lifestyle moving to the location that was more convenient to you that offered you more amenities,” Mitchell said.

In the meantime, those in the racing industry can only wait and see what will happen.

“You got to feel kind of helpless,” stable owner Mark Horner said.