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Dec 19, 2018 Great Canadian Gaming Corporation (GCGC) today announced that it has completed agreements with the Ontario Lottery and Gaming Corporation (OLG) and the Kawartha Downs racetrack for the re-opening of the slot facility at Kawartha Downs in Fraserville, Ontario.

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• Great Canadian Gaming Corporation (GCGC) today announced that it has completed agreements with the Ontario Lottery and Gaming Corporation (OLG) and the Kawartha Downs racetrack for the re-opening of the slot facility at Kawartha Downs in Fraserville, Ontario.
• 'Kawartha Downs is in a little bit different position than many of the other racetracks,' Smith said. 'They have some slots there. There is going to be some challenges in terms of social distancing.'

The Ontario government has made a series of announcements about slot deals at several Ontario racetracks. A reduced number of slots at Ajax Downs and Kawartha Downs has been approved, while Fort Erie Race Track and Dresden Raceway have declined slots, but accepted additional funding.

In February, the government announced that the casino at Ajax Downs would be closed as a result of the new Durham Live entertainment and casino complex in Pickering. Last week, however, Ajax MPP Rod Phillips announced that an agreement had been reached for the two facilities to co-exist. Under the terms of the agreement, the slots at Ajax Downs will be reduced from 800 to 500 once Durham Live opens in late 2019.

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“The agreement ensures a sustainable, two-facility solution with no less than 500 slots here at Ajax Downs until 2026 and then two extensions for [a total of] an additional 12 years,” explained Phillips.

While the agreement provides rental income to keep the track open, it does not provide any direct support for purses or horseman on the track. Ajax Downs was, however, among several tracks that had previously agreed to the government’s long-term funding agreement making them eligible for purse subsidies.

Kawartha Downs was one of two Standardbred racetracks that declined to sign the governments long-term agreement in May, but they have also reached a similar slot agreement.

The racetrack had been close to shutting down after slots were moved to the Shoreline Casino in Peterborough, but the government’s recent announcement confirms that the track has accepted 150 slots, down from 500, as of November 1st.

“Without the rental income coming from slots it would not be feasible to have horse racing, all else being equal,” commented Orazio Valente, the general manager of Kawartha Downs.

Valente was not informed why Kawartha had been offered fewer slots than Ajax. The track had previously been offered 150 slots, which Valente had declined, noting that nothing short of 250 slots would be necessary to keep the facility open. While the new deal does only include 150 slots, Valente was unable to comment any further on whether additional incentives were made due to a non-disclosure agreement.

In a press release issued on behalf of the Ministry of Finance at the close of the business day October 12th, it was announced that Fort Erie and Dresden declined the return of slot machines but accepted long-term funding to help sustain horse racing at both facilities.

The details of the deal are protected by a non-disclosure agreement, said Claude Pilato, chair of the Fort Erie Live Racing Consortium (FELRC) in press release, which states:

“As the lease-holder of the Fort Erie Track (which includes the facilities which housed the OLG Slots until the Province withdrew and closed them in 2013), the OLG and Province met with Senior staff and the corporate solicitor of the FELRC and discussed a non-negotiable offer, approved by the Ontario Ministry of Finance, that offered FELRC A) a specified number of Slots; or B) a cash-in-lieu over time.

“There were 3 caveats, 1) that we undertook a non-disclosure confidentiality agreement before hearing the offer; 2) that the intent of any offer is to support and bolster horse racing; and 3) if horse racing ceased, any and all Provincial support would cease. (So, no horseracing, no slots and/or no sustainability fund).

“Permission to discuss the details was granted by OLG only to the extent of the Board of Directors of FELRC and the professional services advising FELRC, such as the corporate lawyer and FELRC accounting firm.

“An emergency Board meeting was called by the Chair and the Board of Directors reviewed both offers, their merits, their values and their risks, all supported by Senior staff and legal and financial professionals.

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“Being bound by the non-disclosure confidentiality agreement, the FELRC cannot disclose details of the offer until granted permission. It can be said, however, that the Board deliberated at length and the only clear path to meeting the goals of 2 & 3 (above), namely bolster horse racing and ensure horse racing is more sustainable, was to accept the offer that they believe had the greatest benefit.

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“Equal deliberation was had by the Board as to the community expectations and significant disappointment that would result from their choice of options.

“The FELRC Board is confident that, given the offer and conditions they were presented with, that any reasonable person under those circumstances would have chosen the same path.”

According to the Province, in addition to the funding deals with Fort Erie and Dresden, “agreements in principle” have been reached to keep slots operating at Kawartha Downs and Ajax Downs, and discussions are ongoing with other racetracks in Ontario.

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