Ontario Racetracks Reportedly Abused OLG Slots Revenue

In March 2012, former Ontario Finance Minister Dwight Duncan announced that the lucrative OLG slots at racetrack revenue sharing program would come to an end one year later.  The program was indeed cancelled at the end of March 2013, which left most Ontario racetracks scrambling to develop a business plan for the future.

But new investigations into the cancelled program determine that there were other reasons besides the cited OLG gambling modernization strategy championed by Duncan and former OLG Chairman Paul Godfrey.

According to auditors with Deloitte, one of the leading financial advisory firms in Canada, revenue from the slots was being improperly used at the racetracks.  Auditors determined that executive compensation for managers of many racetracks was inflated by the slots revenue, money that under the old agreement, was meant to reinvest into the tracks to support the horseracing industry.

Deloitte blamed Duncan and the previous regime under former Premier Dalton McGuinty for failing to accountably track slots revenue.  One such incident is the Kawartha Downs racetrack near Peterborough, which received approximately $13 million annually from the old OLG slots agreement. 

But the conditions of the racetrack continued to deteriorate over the years, and the owner of the track admitted that buckets were used to catch water from leaking roofs at the grandstands.  Many horse owners and trainers also were disgusted by the state of the barn water at the track, refusing to allow their horses to drink the water.

With more abuses of slots revenue being cited at many tracks, auditors believe Duncan killed the old slots program to prevent another government scandal like the ORNGE air ambulance agency, which is believed to have illegally taken millions of dollars from provincial taxpayers.  The former finance minister has refused to discuss the matter since leaving public office.

Following the cancellation of the program, racetracks were ordered to submit their financial records to Deloitte for transparent audits to determine if provincial funding was justifiable for the venues.  The OLG was heavily involved in these audits, and sources say Godfrey met with the former President of Woodbine Entertainment David Willmot to discuss future funding for the organization’s two racetracks.

Godfrey demanded to see proof of compensation for Woodbine executives before agreeing to any funding.  Willmot reportedly brought proof along, but refused to share the information after Godfrey declined to keep it confidential.  Shortly after the meeting, Willmot resigned from his role, but maintained that revenue at Woodbine was spent appropriately.

There is no missing money at Woodbine.  We have done absolutely nothing wrong, nothing illegal, nothing improper.

Earlier in October, the government under Premier Kathleen Wynne committed to a $400 million deal over five years to support racetracks and the horseracing industry – a deal that racetrack operators feel is insufficient. 

But the revelations about the former slots at racetrack program will likely eliminate sympathy for the racetracks, which instead must commit to millions in revenue cuts to stay operational.  Premier Wynne also pledged to integrate the horseracing industry into the OLG gambling modernization process, but that commitment will likely be revisited in light of the supposed scandals at the tracks.

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