Documents expected to shed light on Slots at Racetracks cancellation

Thursday, February 12, 2015

by SUSAN MANN

Horse breeders embroiled in legal action against the Ontario government expect a recent court decision will help to shed light on why the Liberals decided to cancel the provincial Slots at Racetracks program in 2012.

In a recently handed down ruling, Ontario Superior Court Justice Michael Emery said the Ontario government and Ontario Lottery and Gaming Corp. (OLG) have to produce internal documents by March 31 on the cancellation of the government/racetrack slot machine-revenue sharing program that have been requested by the 37 standardbred horse breeders involved in the lawsuit.

The documents cannot contain redactions, Emery ruled in the Feb. 9 decision.

The standardbred breeders had previously requested the documents and there were discussions between the two sides, says Walter Parkinson, one of the breeders. Parkinson says he couldn’t say why the government and OLG haven’t yet supplied all of the documents they requested.

The breeders did receive some documents before Emery’s ruling, but in many cases they were heavily redacted. “Everything that’s coming forth is the original copies of all material requested,” he says.

Parkinson says the court’s decision clears the way for standardbred breeders to finally obtain internal documents that will enable them to understand the government’s reasons and motivations for cancelling the Slots at Racetracks program.

“We don’t know the reasoning behind their decision,” Parkinson says, noting breeders weren’t part of discussions the government had with racetracks to reach agreements on putting slots at the tracks. The breeders also didn’t know the deal between the government and racetracks “could be terminated on such short notice.”

Christina Crowley-Arklie, communications adviser to Ontario Agriculture Minister Jeff Leal, says by email it’s inappropriate for them to comment “because this litigation is still before the courts.”

The breeders are suing the government and OLG for damages to their businesses caused by the abrupt cancellation of the program almost two years ago.

Their lawsuit, filed in April 2014, claims $60 million in damages caused to their incomes.

In court documents, the breeders say they operate under a five-year production cycle from the time a mare is bred until her offspring is eligible to hit the racetrack circuit. They assert the slot program’s cancellation happened within a year of the province announcing its intentions leaving the industry no time to adjust.

The government announced in March 2012 it was cancelling the program by March 31, 2013.

None of the allegations have been proven in court.

A trial date hasn’t been set yet, and if the case isn’t settled before going to court it could potentially go to trial by this fall, says Parkinson, who is assistant farm manager at Seelster Farms Inc. near Lucan.

Parkinson is also president of the Standardbred Breeders of Ontario Association. The association is not involved in the lawsuit.

Asked about the possibly of a settlement before the lawsuit gets to court, Parkinson says “we’re certainly hopeful. We’re just looking for a fair settlement, to be treated fairly.”

The program’s cancellation had immediate drastic effects on the breeding industry, he says. “We had four years of inventory and crop already produced for a program they (the government) said is not going to be there in the same form we thought it was going to be in,” he says.

From 2012 to 2014, the number of mares bred has declined, Parkinson claims, citing industry statistics that show 1,700 mares were bred to stallions within Ontario in 2014, compared to about 4,000 mares bred in 2011 when the program was still in place.

Parkinson asserts the program’s cancellation also chopped the average sale price for Ontario-sired yearlings by 50 per cent.

Standardbred breeders weren’t compensated for their losses but about a month ago they agreed to an “an enhanced breeders’ rewards program on a go-forward basis,” he says.

The Slots at Racetracks program was introduced in 1998. Under the program the government shared 20 per cent of the revenues from slots housed at 17 Ontario racetracks with the horse racing industry. Horse industry associations estimate the program provided on average more than 60 per cent of the province’s racetrack purses.

Emery says in the written decision the Ontario government and OLG are “significant defendants with significant resources.” They have “collected significant net profits from the slots program at 15 of the 17 racetracks in Ontario after the (Slots at Racetracks program) was terminated.”

In a case of this magnitude the law should favour a generous interpretation of disclosure requirements and the standardbred breeders are entitled to proper disclosure by the Ontario government and OLG, Emery says.

Parkinson says he doesn’t have a total paper count for the amount of documents they’re seeking. “It’s very extensive.”

The documents they’re requesting include emails, internal studies on the program and records referring to Ontario Premier Kathleen Wynne, former premier Dalton McGuinty, former finance minister Dwight Duncan and former OLG chair Paul Godfrey that highlight their involvement in the program’s cancellation, he says. BF