The OLG modernization strategy, which shifts towards offline and online casinos, is costing Ontario taxpayers more money than anticipated. Ontarians paid nearly $81 million to horseracing racetracks as compensation for the OLG’s controversial cancellation of the slots at racetrack revenue sharing program. The Ontario government says the payouts were made to racetracks that spent money including space for more slot machines before the revenue sharing program was scrapped by the OLG.
The taxpayer-funded deal was made public after the Great Canadian Gaming Association released its financial updates for the first quarter of 2013. One of the figures in those reports was a payment to the organization’s Georgian Downs racetrack, located north of Toronto, which was worth approximately $31 million. A similar arrangement in the amount of nearly $26 million was made with the owners of Woodbine Entertainment Group, which owns the Woodbine and Mohawk racetracks.
OLG spokesperson Tony Bitonti says arrangements were made with a number of Ontario’s racetracks to pay out the remaining money. The Ontario government committed $180 million to support racetracks in a transition with the OLG’s modernization plans. The arrangements were made in part due to backlash from rural Ontario, which relies on revenues from the horseracing industry.
The cancelled slots program and a seemingly flippant attitude towards racetracks, created a dispute between Ontario Premier Kathleen Wynne and Paul Godfrey, who was fired last month as OLG Chairman. The Premier put together a panel of former cabinet ministers who once worked on the horseracing file, to reintegrate the racetracks into the future of Ontario’s gambling sector.
The OLG will release its annual financial statements in the next few weeks, which will expectedly shed more light on the nearly $81 million support for the racetracks. A panel of government representatives also voted in favour of allowing Ontario’s Auditor General to review the OLG gambling modernization strategy, and how the changes are in the best interests of Ontario taxpayers.
