Rideau Carleton Raceway Beats the Odds Eugene Melnyk Upset as Mayor Jim Watson Makes Tough Call (but Wise Decision)

Just one year ago, the future looked bleak for the Rideau Carleton Raceway (RCR). Then-Ontario Finance Minister Dwight Duncan announced the termination of the Slots at Racetracks Program (SARP) that had contributed billions of dollars in earnings to Ontario’s health-care and education systems. Duncan announced that the partnership between the Ontario Lottery and Gaming Corporation (OLG) and the province’s racetracks was bad policy because it was providing a subsidy to the racetracks and would therefore be cancelled. The problem was that the successful Slots at Racetracks Program was a boon to the province, bringing in $1.6 billion per year in revenue of which $362 million went back to the tracks. In addition, SARP had greatly strengthened Ontario’s equine and breeder industry which employed over 62,000 people, mostly in small towns and rural communities.

Duncan had no replacement program other than a proposed plan by then OLG President Paul Godfrey to open more casinos in Ontario’s major cities including Ottawa. Strong signals were sent to the Rideau Carleton Raceway from Toronto that its days were numbered. The RCR has a storied history in Ottawa and is a very popular racetrack. Community groups complained. The track management team fought back and customers let their MPPs know they were not happy. A lot has changed in a year. Dalton McGuinty resigned as Premier. Duncan left politics. New Premier Kathleen Wynne fired Godfrey and pressed the pause button on Duncan’s program. Wynne – who grew up on a farm – seemed to realize the stupidity of the situation. However, her decision came late and many in the industry say so much damage has been done already that it will be difficult to make a full recovery. Many breeders have gone out of business and thousands of horses were sold to farms in the United States. Over 13,000 healthy horses were culled in the past months as a direct consequence of the McGuinty government’s decision.

For her part, Premier Wynne says her government “has committed up to $180 million to support the industry over the next three years as it adapts to a smaller and more sustainable model.” Wynne added that “agreements for transition funding have been signed with 12 racetracks and there will be horse racing at 15 tracks right across the province this season.”

The Premier said she is supporting a new market-driven model that includes integrating horse racing with modernizing the province’s gaming strategy, which will provide additional revenue sources for racetracks. This model was recommended by a task force asked to come up with alternatives to help the industry. The idea was one suggested by Dennis Mills, a passionate horseman and owner of the web site Racing Future (www.racingfuture.com) which is one of Canada’s most popular and influential equine sites. Mills served 18 years as a Member of Parliament during the Chrétien era and is recognized for his report on sports that led to significant changes in the way sports are funded in Canada. Mills is also a former Vice Chair of Magna International and spent several years helping Magna’s horsetrack and gaming operations at Gulfstream in Florida and Santa Anita in California. Many believe Mills’ Racing Future site was the catalyst that shut down the  OLG program to kill off Ontario racetracks. Mills is now suggesting that with the new Wynne policy – which he calls a “Wynne for the industry” – the OLG brand should now be changed and referred to as OLGH (Ontario Lottery Gaming and Horseracing Corporation) to show the industry the government is serious about the changes for the long term. (Mills is also the person who put together the 2003 SARS Rolling Stones concert and early in his career was an aide to former Prime Minister Pierre Trudeau. He is connected and an unabashed proponent for  farming communities.)

All of this is music to the ears of the Rideau Carleton Raceway. In June, Ottawa Mayor Jim Watson announced that any plans for a casino in Ottawa would only happen at Rideau Carleton Raceway as an expansion of their current operations. This did not sit well with Ottawa Senators’ owner Eugene Melynk who had been behind the scenes privately negotiating with the OLG earlier this year to bring a casino to Kanata. Melnyk told The Ottawa Citizen that: “I played by the rules and all of a sudden you’re saying those rules don’t really count. We worked on forecasts, submissions, background checks, getting lawyers involved and meeting with the OLG — twice.”

However, it became clear to Mayor Watson when Godfrey was fired by Premier Wynne that the rules for new casino expansion in Ontario had changed. “I do not believe we should jeopardize the Rideau Carleton Raceway operation by not being crystal clear to the OLG prior to the start of its RFP process,” Watson wrote, referring to the Request for Proposals the agency would send to its shortlist of bidders, seeking final bids. Watson correctly read the tea leaves, noting that “unless (Rideau Carleton Raceway) wins the bid, they would be shut down.” He announced that the City of Ottawa would only support a bid for expansion of a casino at the existing Rideau Carleton Raceway. Watson also made it clear to the OLG and other interested parties that: “If they say ‘no,’ then there won’t be a gaming facility in the City of Ottawa, plain and simple.” Premier Wynne supported Watson’s decision, noting that: “The decisions about whether to have a casino or not are made at the municipal level, and if there are additional concerns or issues, then the municipality needs to work with the OLG on that. But those are fundamentally municipal decisions.”

This decision upset Melnyk, who issued a very terse statement: “By introducing this motion, the Mayor has effectively sole sourced the casino’s location. That is not due process.”

Melnyk spoke about the unfairness of it all under the guise that the Kanata site was the only optimal site for casino expansion. “For those who are unaware, I am an avid horseman. I race thoroughbred horses all over the world, including in Ontario, so I fully appreciate the challenges and what is at stake as it relates to the future of Rideau Carleton Raceway and the many employees and families who are so closely associated with its operations. These are hard-working men and women who I respect immensely.”

Melnyk went on to list all the reasons why the Senators Sports & Entertainment site should be the venue for Ottawa’s casino. The problem is that the selection of the Canadian Tire Centre will irreparably harm RCR and throw all the horsemen there out of work. As one long-time RCR horseman put it: “It sounds a tad disingenuous telling someone how  much you appreciate and respect them while at the same time you are working on a plan that will destroy their business and livelihood. The Rideau Carleton Raceway is a viable, successful and beloved Ottawa institution – sort of like the Ottawa Senators. Mayor Watson is on the right side of a tough issue.”