Month Published:
Jan/Feb 2010
By:
Larry Simpson Christmas came early for the Fort Erie community as in mid-December it was announced that the Fort Erie Live Racing Consortium had reached a deal with the assistance of the provincial government, to lease the Fort Erie Race Track from its current owners, Nordic Gaming, ensuring that live racing would be conducted for at least another three years. Heading the Consortium’s efforts was Jim Thibert, General Manager of the Fort Erie Economic Development &Tourism Corporation (FEEDTC), who together with partners, the Town of Fort Erie and the Horsemen’s Benevolent and Protective Association of Ontario (HBPA), worked tirelessly to complete the lease arrangement for the track, which came into effect on January 1st.
Larry Simpson, Publisher of International Horse Racing Digest caught up with Jim Thibert just before the Christmas break, and the following interview transpired
International Horse Racing Digest: Jim, can you give our readers a general summation of the deal to keep Fort Erie Race Track open for the next three years?
Jim Thibert: Basically the Province has committed to a plan to support the Consortium to lease the racetrack from the current owners, Nordic Gaming, for up to three years and to operate the track effective January the 1st. They (the government) have bought into our argument that we can’t sustain the current model, the current model being 10% of the net slot proceeds to the operator, and 10% to the horse purses. The problem is we can’t control the values on the slots, and they are diminishing over time, so our 10% is getting smaller and smaller. It has now gone through the threshold of operating so that’s why Nordic can’t deal with it because they don’t receive enough money from the slots to break even at the track. So what happened is we are prepared to take this on but we cannot deal with the OLG agreement, instead we needed a fixed amount and they have agreed to fix that amount at 5.6 million dollars. Then the Town of Fort Erie is providing 500 thousand dollars for a total budget of 6.1 million, with the purse structure continuing to be funded, as is with all the horse tracks, by 10% of net proceeds from the slot revenue.
IHRD: Were you happy with the deal that you received from the government? I guess you would be because racing has been saved at Fort Erie!
JT: Well I would have been happier if they would have given me what I asked for. But it is a set of negotiations and they negotiated us and they cut us down about 2 million dollars and so it’s a situation where there is no fat and it’s going to be tough. We are going to have to meet our performance objectives both as the managers of the facility, plus the operating staff, the horse people, everybody has to make this work. And if they don’t, well, we only have ourselves to blame!
IHRD: Let’s talk about the economic impact of this deal. How important was it? We do know how important it was to the horsemen, but what about the Town of Fort Erie itself?
JT: The estimate we looked at in our arguments is around 200 million dollars a year, economic impact both direct and indirect. That’s a normal set of multipliers included in that and if you look at the 200 million, about 65% of that stays in Niagara and a ‘big chunk’ of that is in the Fort Erie / Niagara Falls area.
IHRD: And as far as employment, I understand that there are 1500 people employed by the track itself?
JT: There are 500 full time equivalents. And then with horse people in the summer time in racing season, it goes up to about 1500 people.
IHRD: Has there been a response from the population of Fort Erie?
JT: So far, everything we’ve seen has been very positive. We had a lot of good press, Friday, Saturday and Sunday and I think it might just be sinking in with a lot of people now. But so far what we have seen is good editorial, in support of this. We have received a number of calls, and lots of sentiments in emails saying it’s a good thing to do.
IHRD: Getting back to the arrangement itself I know you were originally looking at a five-year plan, so what happened since it is only over three years now?
JT: That was part of the negotiations! They (the government) knocked us down to a three-year plan. and we’re okay with that. Clearly if we can make it work in three years then everyone will want to continue it. But they are not making a commitment beyond three years because we have to perform each year. As a not for profit corporation, its a pretty simple thing, if we do not have the resources to go into the following year, as at September 1st, we will not be able to do so. So, everybody who is in the racing business has to work with us, and we have to make sure by September 1st we are confident that we have the money to go into the following year.
IHRD: Obviously in order for this deal to fly there is a lot of leverage being put onto the slots and the revenue generated by the slots. Even a percentage the Town of Fort Erie is getting is going back to the deal.
JT: Part of that, yes!
IHRD: So is the Ontario Lottery and Gaming going to do anything to obviously promote and market the slots portion of the Fort Erie Race Track, or is that something that is still up in the air?
JT: Oh no, the Lottery Corporation does its own marketing. They will be dealing with the slots to improve them. In fact, I think they have plans to improve the slot facility at Fort Erie, so we will see how that unfolds.
IHRD: But they haven’t committed any extra dollars to Fort Erie as yet?
JT: The money from the province that goes to the OLG is 5.6 million and that’s the OLG’s obligation to us, plus the 10% of net that goes to the purse structure. Nothing more!
IHRD: How about the horsemen? Has the word that there will be racing at Fort Erie got out to the local horsemen as yet? I know some are racing at Tampa.
JT: I’m sure it has covered the world by now. We had more than 100 people there at the press conference (in December), and it is on the HBPA website I’m sure. I mean it’s up to the horsemen to talk to each other and talk it up. We have assured racing a lot sooner than last year, when it was the middle of April.
IHRD: Obviously the game plan is to open with as many horses stabled in the backstretch as possible, as from what I can recall from last year, the track opened with only 600 horses filling the barns. It should be easier to have more horses on the grounds, as a December notice of racing is certainly better than April?
JT: We are going to want to fill the roster of horses with horses that actually race.
IHRD: From the political side are the local politicians on side, and is everybody very positive moving forward with the Fort Erie Race Track program?
JT: Well we are all ready to go. We are just hoping the government agencies are ready to go. That’s what we’re working on now.
IHRD: So is there anything out there that could throw a monkey wrench into the deal or as far as you are concerned is it pretty well cast in stone?
JT: It’s a done deal, we just have to make it work and there are a lot of logistics to iron out, but today I am running around just before Christmas establishing bank accounts and directors liability insurance, and appointing auditors, as we have to be ready for January 1st. So it’s a done deal.