Breaking Down the Woodbine/HBPA Deal

After a tense spring waiting for word on when the racing season might start, there was relief when Woodbine and the Ontario Horsemen’s Benevolent and Protective Association (HBPA) announced that they had reached a deal. The agreement came much later than usual and necessitated the season opener be pushed back a week to April 22nd. While both sides are pleased that an agreement was reached, it was only a two-year deal instead of the usual four, however race days were maintained at 133 days for 2023 and included four fewer race dates in 2024.

The difficulty of these negotiations was foreshadowed back in October when Michael Copeland, Woodbine’s Chief Commercial Officer, mentioned in a Stronger Together discussion the possibility of working with a different horsemen’s group. This was a significant suggestion and created considerable concern and uncertainty for owners and trainers since the same scenario played out in 2009 when Woodbine was unable to reach an agreement with the then standardbred horseman’s association, Ontario Harness Horse Association (OHHA). Legally, racetracks are required to have an agreement with a horsemen’s group that is approved by the AGCO in order to host pari-mutuel wagering. A new group of horsemen who raced at Mohawk created the Central Ontario Standardbred Association (COSA) and was able to make a deal with Woodbine; their partnership continues today.

Sue Leslie. (New Image Media/CHRHF)

In an effort to avoid a delayed resolution in future, Sue Leslie, the president of the HBPA, has said that she’s spoken with Woodbine’s CEO, Jim Lawson, to ensure improved communication.

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“Our historic and current agreement with Woodbine requires that they have meaningful discussions with horsemen on the purse account. For a variety of reasons, that didn’t happen this year,” commented Leslie. “Also, Woodbine sits on the Thoroughbred Improvement Program (TIP) committee with the HBPA, Canadian Thoroughbred Horse Society, Ontario Racing, and Fort Erie. Together, we review the TIP money and decide how it gets allocated, but that didn’t happen this year either. Jim and I have had constructive discussions which will improve communication in the future. We’ve all learned, and we will move forward.”

Membership to the HBPA is free and open to anyone with a valid owners or trainers Thoroughbred AGCO license. With no membership revenue, the only income the HBPA has is the 1.5% ($930,000) they earn from the $62 million purse that is supported by the agreement Woodbine has with the government. That money is used to fund the various services, education, and health insurance benefits available to HBPA members.

TIP is part of Ontario’s Horse Improvement Program (HIP) which earns 3% of the home market wagering of which 55 per cent goes to TIP and 45 per cent to the Standardbred Improvement Program. TIP’s budget, about $12.5 million in 2022, is used to fund its various programs like the Ontario Bred Purse Bonuses, Ontario Restricted Stakes Racing, Ontario Sires Stakes, and others that owners and breeders rely on. The revenue from home market wagering, which is money bet in Ontario on Ontario racing, was not enough, however, to fully fund the budgeted program which is set at the beginning of the year before any wagers are made. As a result, Woodbine has restructured its Ontario Bred bonus for maiden allowance races because that portion of TIP was over budget in excess of $3.5 million in 2022 which was paid by Woodbine. Despite this change, it’s estimated that the Ontario Bred bonus program will still be $2 million over budget in 2023, which Woodbine has committed to covering again.

“We don’t get the return if we don’t boost the home market, but that needs to be a joint effort with the HBPA, Woodbine and OR, all three entities need to do something,” noted Leslie on how to improve betting in Ontario to keep a healthy TIP program. “The OLG should also be involved. They have a hefty marketing budget which could be better utilized to target our customers. I’ve put that on the table, and we’ll see if that happens.”

The hope is that Woodbine will soon be able to secure new revenue streams through the opening of the new casino and the introduction of sports betting so that lost race dates could be added back.

While the amount of the purse and bonuses is certainly a big concern, the HBPA also strongly objected to the reduction in race dates since that gives horseman fewer opportunities to make money.

“During our discussion of the agreement we focused on race dates,” says Leslie. “Our members made it very clear they didn’t want to give up any dates. There is a concern among horse people that the shortening of the season slowly over the past couple decades will end us at a boutique meet. The HBPA doesn’t support that nor do the horse people. Woodbine has indicated that is not the plan or case but certainly over the last decade race dates have fallen. HBPA is really aware of that.”

The hope is that Woodbine will soon be able to secure new revenue streams through the opening of the new casino and the introduction of sports betting so that lost race dates could be added back.

“There is no deal in place, but if new revenue streams are realized then there is no reason to think they wouldn’t add back race dates. We have already broached the subject and Woodbine indicated they would be open to that,” said Lesley.

“Owners don’t expect to make money, but they do want to cover their costs, which is done with a healthy purse account.”

When the new revenue streams materialize, the HBPA would hope to see half the revenue dedicated to purses.

“We would hope to receive 50 per cent,” said Leslie. “That has been the traditional split with horse people and tracks, prior to the new arrangement with the government. We will have to wait and see from a cost perspective what Woodbine says it’s going to cost them.

In the meantime, the industry faces a declining horse population which makes it difficult to support so many race dates.

“It’s a chicken and the egg situation,” commented Leslie. “Our argument is that if you want horses, you have to have optimal race days and good purses. Those are the two things that drive owners. They want to enjoy their horses as long as possible, and they want to recover their costs. Owners don’t expect to make money, but they do want to cover their costs, which is done with a healthy purse account. We believe if we can keep our purses healthy enough, owners will buy horses and breeders will breed, but they must have confidence in the continuity of the program, so they feel comfortable in the long-term viability of the industry.

“We need stability. We need to convey this to the owners. I think it can be done but it takes a joint effort. We have to take all the uncertainty out of peoples’ minds. That is the biggest reason why owners are being very careful about investing.”