Walking into Kawartha Downs last week for a much anticipated press conference, it was clear the news would not be good. The crowd eagerly awaiting news from the facility’s General Manager Orazio Valente consisted of horse owners and the press- no smiling politicians ready to bail out the facility with news of new races or a new model to keep the track alive.
Last May, Valente took control of the facility on behalf of its creditors when the business went into a court-ordered receivership as the 2017 racing season opened. Since then, he has been seeking a path to return the business to profitability or secure new owners for the property.
In November, he learned that his application to host 40 races in Fraserville during the 2018 season had been rejected by the Ontario Racing Association, which limited its approval to 18 races, the same as the previous year. The association allocates race approvals to race track owners across the province from fixed pool of almost 950 approved horse races each season.
Operating more races would help Kawartha Downs offset the pending loss of the slot machine revenue which will begin later this year when the new Peterborough casino opens its doors. The loss of the slots is expected to reduce revenues at Kawartha Downs by roughly 85 per cent. Valente was hoping to secure a larger share of the approximately $93 million OLG distributes to racetracks to support the horse racing industry across the province to shore up the revenue shortfall.
Kawartha Downs was built by members of the Peterborough Racing Association in 1972. The Morrow Park facility in which they had been operating required significant capital improvements to meet their requirements, and the group was unable to secure long term lease assurances from the track owners in exchange for making these upgrades. Instead, they secured the 110 acre property in Fraserville and built a new facility, financing the new track by selling shares primarily to people in the horse racing business. The $1million was raised from 137 shareholders, none of whom were allowed to hold more than three per cent of the total.
Gerald Lowery was President of the Association at that time, and was at the press conference. Having sold his last horse last year, his interest in the future of Kawartha Downs is academic rather than financial. He believes the facility would have to run at least 30 races per season to remain viable.
Skip Ambrose purchased the facility in the 1990s, adding the Kawartha Speedway racetrack in 1999, and the OLG slots a few years later. At its peak, Kawartha Downs hosted 104 races each season. The harness racing part of the business almost closed in 2013 but was rescued with a shortened racing season. Now it seems the future could depend on extending it.
Last month in a discussion at Peterborough County Council, Agriculture, Food and Rural Affairs Minister Jeff Leal suggested that the province was working on a plan to ensure the “long-term stability” for Kawartha Downs and the three other racetracks across the province that are scheduled to lose their slot machines and their viability.
Horse owners were hoping they would hear the provincial plan last week, but they will have to wait a bit longer. When he emerged to meet the crowd, Valente apologized, saying new developments during the previous 24 hours made his planned announcement inappropriate at this time. He assured the group he would report back in the next few weeks, when he hoped to offer good news.
Among the options Leal has outlined to support the track are leaving some slot machines at the facility, adding more races, introducing off-track betting or reducing the taxes paid by racetracks.
It will take more than reduced taxes to save Kawartha Downs. According to Mayor McFadden, the total property tax bill for the facility is roughly $120,000, not nearly enough to influence the business. It also seems particularly punitive to suggest that the township to forgo this legitimate tax revenue at the same time it is losing the slot revenue.
Race tracks across the province were built on a model of the province’s creation, and are subject to ongoing political policy for their financial success. They will have to wait a few more weeks to hear the province’s new vision for the future of horse racing at Kawartha Downs in order to decide if whether or not the new model will include their participation. KG