Miscellaneous

Integration and the OLG Explained

In the first part of an ongoing series on the challenges facing the Ontario horse racing industry – and possible solutions – Cal Bricker

Cal Bricker, the senior vice-president of horse racing for the Ontario Lottery and Gaming (OLG) corporation, fourth from the left. Dave Landry Photo

By: Dave Briggs | August 29, 2016

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you're listening to an article from canadian thoroughbred.com. integration and the olg explained by: dave briggs. three years after the slots at racetracks program (sarp) ended, instability in ontario’s horse racing market is still thought to be a leading cause for declines at the canadian premier yearling sale in back-to-back years. despite the provincial government’s commitment of $100 million per year in funding through 2021, there is still confusion about much-promised integration between the horse racing industry and the ontario lottery and gaming (olg) corporation. a week after the auction, cal bricker, the olg’s senior vice-president of horse racing, spoke at length with canadian thoroughbred to explain what integration means to the olg and outline where he thinks the industry is headed. “i think there was a lot of confusion amongst people about what integration meant exactly because there was not a lot of clarification given to it,” said bricker, who recently celebrated his one-year anniversary on the job. “what it really means is putting together a new funding and governance model for the industry and also putting together some branding and marketing support to help establish the ontario racing brand in the province.”. advertisement scroll to continue with content the olg has contributed some of its marketing power to a new video ad that has aired extensively on television and in movie theatres this summer. “when was the last time you saw an ad like that supporting ontario racing in theatre or on television? the feedback i get is that people sense a change,” bricker said. bricker also pointed to an olg scratch-and-win ticket tied to the queen’s plate as an indication of integration. but those thinking a new gaming product tied to horse racing is coming may be disappointed. “the focus is less on getting things that are less ancillary to the (horse racing) business and far more on growing the business that we have. the thing that we need to spend the time on is making sure that there is full fields, that there’s quality racing, and that we’re growing the pari-mutuel pool. that’s where racing can sustain its future,” bricker said. “to have a bunch of things that aren’t connected to racing supporting racing will just bring us back to the place that we were which was the racing industry not growing organically – and that’s what it needs to do.”. bricker said introducing a new gaming product tied to horse racing faces a number of challenges. “one is that the space within which you can introduce a product, say for example on the lottery side, would just cannibalize things that we have going already at olg. the second thing is that were in the process of modernization here at olg where a number of aspects of this business are going out to private service providers over the course of the next couple of years and we can’t be tying the hands of private service providers in those spaces. what they are bidding for is businesses that exist now. it’s very tough us to put something in that’s either going to compete against them or tie their hands in terms of things they are trying to do.”. as of april 1, 2016 the ontario racing commission ceased to exist and its responsibilities transferred to alcohol and gaming commission of ontario (agco) and ontario lottery and gaming (olg). agco has assumed responsibility for the regulation of horse racing in ontario, while olg has been entrusted with managing the money the government provides to the industry through transfer agreements. bricker said the olg’s tina macmillan is in charge of the transfer agreements. asked what transparency measures are in place for the industry and taxpayers to have full disclosure about how much money is being spent where, and how much is being allocated specifically to racetracks, purses, marketing, breed programs, etc., macmillan said, via email that, “the administration agreement and program guidelines are posted on-line at olg.ca. the administration agreement includes a chart (below) which lays out the max funding amounts by year by alliance, far (fort erie, ajax and rideau carleton) and regional tracks, as well as industry development and administration.”. breeder programs run under the ontario ministry of agriculture, food and rural affairs (omafra) and, macmillan said olg does, “not have oversight of those funds.”. the document also outlines accountability indicators and performance targets. bricker’s comments appear to be suggesting there will be no additional funding or revenue streams in excess of the $100 million annually, though the government is looking at extending funding beyond the current seven-year, $700 million total commitment to date. “i was at the thoroughbred auction last week and i heard concern from people that they wanted to make sure if they were investing in a horse that there was going to be a program to race into and i assured them that that was the case. the budget is there until 2021 at the level that it is right now,” bricker said. he said the focus should be on the industry growing its own revenue stream rather than looking for new sources of revenue. “i think we’ve been in extensive conversations with the industry association, with government, with weg, with other people out there. i think that we all understand that there is certain things that need to happen in the industry to make it sustainable for the future,” bricker said. “one of them is the source funding which we are committed to continue to provide. the second thing i would say is there really needs to be a focus on growing wagering and improving the quality of the product. so those are the kinds of things that are really driving our conversation.”. he also indicated a new funding model to go into effect after 2021 is being discussed and something may be announced this fall. as to why an announcement on future funding could not be made prior to the horse sales when it could have had a positive impact on buyer confidence and sale prices, bricker said there are a lot of moving parts. “there’s an approvals process that we have to go through on these things, so we’re doing it with government, ontario racing is dealing with it, woodbine’s dealing with it, there’s a bunch of folks that are involved with this that have their own governance matters that they have to get themselves through, but i can tell you everybody’s committed to doing this,” bricker said. “we are talking about a lot of money and people want to know that the proper accountability is in place and that the investment they are making – this is the taxpayers of ontario taking in the industry – is going to get the results that they are hoping to get. so, you start with that. you also start with an industry that has a bunch of different interests in it. sometimes they are aligned, sometimes they are not. there is also a history that we have to work our way through and what we have to do is to get people to say the past is prologue here. we need to talk about the future so whatever grievances, problems or issues you have from the past – and i appreciate and know people have lots of scar tissue over that – we need to get ourselves focused on future and it takes time to make that result happen. “we can’t really say any more about the exact administration of it, how it’s going to work, how it’s going to be managed beyond saying that the government was very clear in the budget about a need to sustain the horse racing industry for the future and the kinds of things that we’re doing and plans we are putting in place are designed to do that. “there’s going to be industry consultations in the fall where will be going out and talking to everybody on what we hope the new plan will be and how we expect to roll it out and what we expect the time frames are and what the numbers are and i’m hoping people are going to be pleased with that.”. though the olg is handling and overseeing the money coming from taxpayers, bricker said the olg would not make decisions regarding industry programs such as the ontario sired program currently managed by the horsemen’s benevolent and protective association (hbpa) and weg. “we think that tracks and horsepeople are in the best position to know what to do with their industry,” bricker said. “everybody needs to come onboard and participate in that process. it’s our job to do what we can do to try and basically build a vibrant industry and make sure it’s properly funded to have a future. when it comes to things (like the os program) i would look to the industry to provide us advice on the best way to manage this.”. through it all, bricker said he was optimistic about the future of horse racing in ontario and he believes the time is right to invest. “i am going to go out on a limb here and say if i had a dollar to spend on a horse right now i would spend it because there’s going to be a program to run into,” he said. &&>

Three years after the Slots at Racetracks Program (SARP) ended, instability in Ontario’s horse racing market is still thought to be a leading cause for declines at the Canadian Premier Yearling Sale in back-to-back years. Despite the provincial government’s commitment of $100 million per year in funding through 2021, there is still confusion about much-promised integration between the horse racing industry and the Ontario Lottery and Gaming (OLG) corporation.

A week after the auction, Cal Bricker, the OLG’s senior vice-president of horse racing, spoke at length with Canadian Thoroughbred to explain what integration means to the OLG and outline where he thinks the industry is headed.

“I think there was a lot of confusion amongst people about what integration meant exactly because there was not a lot of clarification given to it,” said Bricker, who recently celebrated his one-year anniversary on the job. “What it really means is putting together a new funding and governance model for the industry and also putting together some branding and marketing support to help establish the Ontario Racing brand in the province.”

Scroll to continue with content

The OLG has contributed some of its marketing power to a new video ad that has aired extensively on television and in movie theatres this summer.

“When was the last time you saw an ad like that supporting Ontario racing in theatre or on television? The feedback I get is that people sense a change,” Bricker said.

Bricker also pointed to an OLG scratch-and-win ticket tied to the Queen’s Plate as an indication of integration.

But those thinking a new gaming product tied to horse racing is coming may be disappointed.

“The focus is less on getting things that are less ancillary to the (horse racing) business and far more on growing the business that we have. The thing that we need to spend the time on is making sure that there is full fields, that there’s quality racing, and that we’re growing the pari-mutuel pool. That’s where racing can sustain its future,” Bricker said. “To have a bunch of things that aren’t connected to racing supporting racing will just bring us back to the place that we were which was the racing industry not growing organically – and that’s what it needs to do.”

Bricker said introducing a new gaming product tied to horse racing faces a number of challenges.

“One is that the space within which you can introduce a product, say for example on the lottery side, would just cannibalize things that we have going already at OLG. The second thing is that were in the process of modernization here at OLG where a number of aspects of this business are going out to private service providers over the course of the next couple of years and we can’t be tying the hands of private service providers in those spaces. What they are bidding for is businesses that exist now. It’s very tough us to put something in that’s either going to compete against them or tie their hands in terms of things they are trying to do.”

As of April 1, 2016 the Ontario Racing Commission ceased to exist and its responsibilities transferred to Alcohol and Gaming Commission of Ontario (AGCO) and Ontario Lottery and Gaming (OLG). AGCO has assumed responsibility for the regulation of horse racing in Ontario, while OLG has been entrusted with managing the money the government provides to the industry through transfer agreements.

Bricker said the OLG’s Tina MacMillan is in charge of the transfer agreements. Asked what transparency measures are in place for the industry and taxpayers to have full disclosure about how much money is being spent where, and how much is being allocated specifically to racetracks, purses, marketing, breed programs, etc., MacMillan said, via email that, “the Administration Agreement and Program Guidelines are posted on-line at OLG.ca.

The Administration Agreement includes a chart (below) which lays out the max funding amounts by year by Alliance, FAR (Fort Erie, Ajax and Rideau Carleton) and Regional tracks, as well as industry development and administration.”

Breeder programs run under the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) and, MacMillan said OLG does, “not have oversight of those funds.”

The document also outlines accountability indicators and performance targets.

Bricker’s comments appear to be suggesting there will be no additional funding or revenue streams in excess of the $100 million annually, though the government is looking at extending funding beyond the current seven-year, $700 million total commitment to date.

“I was at the thoroughbred auction last week and I heard concern from people that they wanted to make sure if they were investing in a horse that there was going to be a program to race into and I assured them that that was the case. The budget is there until 2021 at the level that it is right now,” Bricker said.

He said the focus should be on the industry growing its own revenue stream rather than looking for new sources of revenue.

“I think we’ve been in extensive conversations with the industry association, with government, with WEG, with other people out there. I think that we all understand that there is certain things that need to happen in the industry to make it sustainable for the future,” Bricker said.

“One of them is the source funding which we are committed to continue to provide. The second thing I would say is there really needs to be a focus on growing wagering and improving the quality of the product. So those are the kinds of things that are really driving our conversation.”

He also indicated a new funding model to go into effect after 2021 is being discussed and something may be announced this fall. As to why an announcement on future funding could not be made prior to the horse sales when it could have had a positive impact on buyer confidence and sale prices, Bricker said there are a lot of moving parts.

“There’s an approvals process that we have to go through on these things, so we’re doing it with government, Ontario Racing is dealing with it, Woodbine’s dealing with it, there’s a bunch of folks that are involved with this that have their own governance matters that they have to get themselves through, but I can tell you everybody’s committed to doing this,” Bricker said.

“We are talking about a lot of money and people want to know that the proper accountability is in place and that the
investment they are making – this is the taxpayers of Ontario taking in the industry – is going to get the results that they are hoping to get. So, you start with that. You also start with an industry that has a bunch of different interests in it. Sometimes they are aligned, sometimes they are not. There is also a history that we have to work our way through and what we have to do is to get people to say the past is prologue here. We need to talk about the future so whatever grievances, problems or issues you have from the past – and I appreciate and know people have lots of scar tissue over that – we need to get ourselves focused on future and it takes time to make that result happen.

“We can’t really say any more about the exact administration of it, how it’s going to work, how it’s going to be managed beyond saying that the government was very clear in the budget about a need to sustain the horse racing industry for the future and the kinds of things that we’re doing and plans we are putting in place are designed to do that.

“There’s going to be industry consultations in the fall where will be going out and talking to everybody on what we
hope the new plan will be and how we expect to roll it out and what we expect the time frames are and what the numbers are and I’m hoping people are going to be pleased with that.”

Though the OLG is handling and overseeing the money coming from taxpayers, Bricker said the OLG would not make decisions regarding industry programs such as the Ontario Sired program currently managed by the Horsemen’s Benevolent and Protective Association (HBPA) and WEG.

“We think that tracks and horsepeople are in the best position to know what to do with their industry,” Bricker said. “Everybody needs to come onboard and participate in that process. It’s our job to do what we can do to try and basically build a vibrant industry and make sure it’s properly funded to have a future. When it comes to things (like the OS program) I would look to the industry to provide us advice on the best way to manage this.”

Through it all, Bricker said he was optimistic about the future of horse racing in Ontario and he believes the time is right to invest.

“I am going to go out on a limb here and say if I had a dollar to spend on a horse right now I would spend it because there’s going to be a program to run into,” he said.