The province is injecting more gambling profits back into B.C.’s horse racing industry.
Victoria previously gave out allocations to support and help run both standardbred and thoroughbred racing based on a share of revenues generated.
But with revenue dropping, the operating and aid dollars were also set to dwindle, so the province has instead increased its grant to a fixed amount of $10 million per year.
The move will provide stability and certainty in terms of government support, according to a Dec. 10 letter from Derek Sturko, assistant deputy minister at the province’s Gaming Policy and Enforcement Branch and chair of the B.C. Horse Racing Industry Management Committee.
Between the provincial grant and wagering profits, the industry will have $48 million to operate from the industry revenue fund in 2011, up from $44.9 million this year.
More money will go into race purses as well as a new $800,000 advertising and marketing fund.
Sturko cited the “difficult financial circumstances in which the industry finds itself and the significant decline in revenue that was experienced in 2010” for the policy change.
Howard Blank, vice-president of Great Canadian Gaming Corp., which operates Fraser Downs, welcomed the new marketing money.
“We’re going to be quite creative in how we use that,” he said, adding the province’s commitment is positive.
“It’s a guaranteed revenue stream,” Blank said. “We’re going to take that tool and work together with the horsemen on providing an outstanding product to the public.”
Blank said there have been no new developments on talk of potentially consolidating standardbred and thoroughbred racing at a single talk and stressed the finances are not strong.
“The industry is still suffering sharp declines,” Blank said. “There is a lot of work that needs to be done in order to continue to try to stabilize and hopefully grow the industry.”
Despite the challenges, Great Canadian Gaming is still on track to once again turn in a profit at its two B.C. racetracks for 2010.
The company last month reported third-quarter pre-tax profits of $3.4 million at Fraser Downs and Hastings Park’s combined operations, including the casino gambling and hospitality sales.
That was down only marginally from $3.5 million in the third quarter of 2009 despite an 18 per cent drop in revenues at the two outlets, thanks to significant cost cutting.
The third quarter report shows racetrack revenues at Fraser Downs/Hastings were down 35 per cent to $3.9 million, while casino gaming revenues held almost steady at $4.9 million.
The third quarter report primarily blames the revenue drops on an accounting change regarding the company’s stake in TBC Teletheatre BC.
The two B.C. “racinos” now show pre-tax profit of $9.1 million for the first nine months of 2010, compared to $10 million for the same period of 2009.
Doug McCallum, new CEO of Harness Racing BC, said the association is pleased with the commitment of the government to increase the allocation for the 2011 season.
“The new marketing money is also welcomed to promote and build the industry,” he said.
The future of the 2011 season at Fraser Downs had been uncertain weeks into the current fall season. In August, the number of upcoming race dates were cut by 30 per cent.
The 2011 season was temporarily in limbo while the B.C. Horse Racing Management Committee and Great Canadian Gaming Corp. reviewed B.C.’s thoroughbred and standardbred racing industries. Discussions have been aimed at balancing declining revenues and devising a long-term vision.
But an agreement reached between Great Canadian and Harness Racing B.C. guarantees at least 70 racing dates in the 2011 schedule, with the promise of 12 additional dates that would be added next fall (October to December) provided performance-based criteria are met: namely more bets – and bigger races, with more horses from B.C.
The 2011 thoroughbred season had also been under consideration, Sturko’s letter said.
–With files from Jennifer Lang