Why Did the Slot at Racetracks Program Really End?

Nearly five years after the end of the Slot at Racetracks Program (SARP), Ontario’s horse racing industry is finally beginning to uncover the truth of why SARP was cancelled.

The lawyer representing a group of standardbred breeders in a $65 million lawsuit against the province of Ontario and the Ontario Lottery and Gaming corporation (OLG) said he expects the truth will be exposed when the case is scheduled to be heard over five days in September of this year.

Compelling Narrative

The former premier of Ontario and other key government officials will no longer have to take the stand in open court to explain why SARP was cancelled, but Jonathan Lisus, the lawyer representing 36 breeders tied to the Standardbred Breeders of Ontario Association (SBOA), said a number of key government officials will still have to testify under oath.

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“When we go through the process and lay it all out, I think quite a compelling narrative will emerge,” said Lisus of Lax O’Sullivan Lisus Gottlieb LLP of Toronto.

According to legal documents filed on behalf of the SBOA in 2015, the Ontario government’s decision to pull out of the SARP was made as early as 2011. However, then-Premier Dalton McGuinty and former Minister of Finance, Dwight Duncan, chose not to inform the horse racing industry of the government’s decision. In February of 2012, the government publically announced the program would end on March 31, 2013. As a result, breeders and stallion owners say they were unprepared for the financial repercussions.

“A big concern has always been the manner with which the decision was made and imposed on the industry and the consequences to the plaintiffs and others. We will certainly, at the end of this process, have transparency in how that occurred,” Lisus said.

In August of 2017, it looked as if McGuinty and Duncan, among other key officials, would have to take the stand in open court before the end of 2017 to explain the decision to cancel SARP with little notice and throw an industry — that once supported 35,000 full-time equivalent jobs in the province — into turmoil.

The breeders, who made investment decisions after being told SARP was secure in the early days of a renewed five-year contract, felt the biggest blow when in 2012 the government suddenly exercised its right to cancel SARP with one year’s notice.

In March of 2014, a little less than a year after SARP officially ended, the breeders filed the lawsuit against the government and the Ontario Lottery and Gaming corporation (OLG) seeking damages and the truth as to why the government cancelled a program that delivered $1.1 billion annually into government coffers and provided a direct injection to the horse racing industry from a 20 per cent cut of slot revenue.

Premier, Finance Minister Under Oath

McGuinty, Duncan, former Ontario Racing Commission chair Rod Seiling, economist Don Drummond and horse racing transition panel members John Snobelen and John Wilkinson have either already testified or are scheduled to testify in the case.

“Between now and September 2018, there are going to be a lot of examinations. We’re going to examine the witnesses that were under summons and there are two additional witnesses that are going to be examined – Michael Keegan, who was (Agriculture) Minister (Ted) McMeekin’s chief of staff and Dave Gene, who was in the Premier’s office. All the other witnesses were previously identified,” Lisus said.

“Both sides have brought summary judgment motions. This means that there will not be any witnesses testifying live in court. All of the witnesses, including Dwight Duncan and Dalton McGuinty, will be cross-examined under oath in the course of the next few months and the transcripts of their evidence will be filed with the court… Duncan and McGuinty will be cross-examined at the end of February and the beginning of March. The lawyers will file written submissions summarizing the cross-examination evidence and the documents and over five days starting September 10 will make arguments about the evidence. The court will review all of the evidence and make a decision.”

Despite having what appears to be some strong written evidence in its favour in terms of government emails about the cancellation of SARP, Lisus said there have been no discussions of a settlement.

“The breeders have, since March 2014, made it clear that they would have preferred to negotiate a fair compensation package for the losses they suffered as was done with racetrack owners, but the government has never shown any interest in doing that, which is why we’re in court,” Lisus said. “One of the issues before the court is the government’s decision to exclude standardbred breeders from the enhanced breeder support it authorized for thoroughbred and quarter horse breeders in spring 2014 because they started this case and asked the court to adjudicate on the propriety of the government’s decision.”

Lisus said he believes the breeders have a good case.

“The case is moving in the right direction. We’re in the evidence-gathering stage from witnesses. We have a lot of evidence from documents. The evidence we are going to get through these examinations I anticipate is going to be very helpful to the court and to the process,” he said.

What Does the Case Mean for Thoroughbreds?

What could it mean for the thoroughbred industry if the SBOA were to win this case? The best answer is uncovering the truth as to why SARP was cancelled. Any other possible benefits accruing to the thoroughbred industry would mostly be conjecture at this point. For sure, the statute of limitations has expired, limiting or nullifying any thoroughbred group’s ability to file a similar lawsuit.

Yet, the SBOA plaintiffs say they are hopeful their lawsuit will have positive ramifications for the whole of Ontario’s horse racing industry by holding the government accountable for what it says is breach of contract.

Of course, getting to the truth in a baffling decision to cancel a successful program would be of some value to everyone in horse racing, but, admittedly, that will be cold comfort to some. Likely the best benefit to the thoroughbred industry in uncovering the truth is the hope it will lead to greater transparency in future deals with the government. The case could also lead to greater collaboration and communication between the industry and governments across the country and serve as a deterent to secretive, destructive decision-making by politicians and bureaucrats.

“The way in which the government does business directly impacts the health and viability of the provincial horse racing across all sectors of the industry,” Lisus’ associate, Ian Matthews, told Canadian Thoroughbred last year