Surprise, surprise. Ontario Lottery and Gaming Corp. (OLG) has proposed major changes in Ontario’s substantial gaming program, changes which could leave horse racing out in the cold. The operator of all things gaming in the province would like to discontinue the racetrack slot program in favor of a model that would allow slots at locations other than racetracks. Officials have determined that by having slots at tracks, gaming is now located in many places “unrelated to customer interest.”

Those “unrelated to customer interest” places, 17 at the present time, have brought in more than $17.1 billion in gaming revenues since the beginning of the racetrack slot program in December 1998. The lion’s share of that, 80 percent ($13.7 billion), has gone to the province. Even if you factor in costs, that’s still a huge amount of money for the government. Compared to revenue splits for similar programs in the United States, in fact, it’s a gift to the government.

But OLG thinks it can do better by finding more attractive locations for some of those slot parlors. And it is probably right. Plus, it can’t hurt to get rid of the obligatory 20 percent currently being paid to the racing industry (10 percent for tracks, 10 percent for purses), which the government thinks is an increasingly unnecessary subsidy.

Some tracks with slots would appear safe. Woodbine alone brings in about one-third of total racetrack slot revenue in the province – $588 million in fiscal 2011. That track is likely to remain one of OLG’s favored partners, and in fact may even evolve into a full casino -- OLG wants something more in the greater Toronto area. Woodbine already produces more gaming revenue than any other single casino in the province. Six other tracks also bring in more than $100 million in gaming revenues annually, much more than most of the province’s smaller community casinos.

Other tracks won’t be as fortunate. Without the slot supplement, some will simply disappear and the industry will contract. Enough to seriously reduce horse racing’s overall economic impact in the province? Many say yes. The government needs to factor that into the overall equation.

Actually, horse racing in Ontario hasn’t done all that badly over the years. In 2000, total handle in Ontario was $1,193,012,997; in 2009 it was $1,088,775,950. A loss of “just” 8.7 percent over nine years, especially given what many U.S. racing jurisdictions have experienced, is not bad at all. Thoroughbred racing has held up much better than has harness racing – in fact Thoroughbred handle grew by 6.1 percent over the nine years while harness handle fell by 28 percent.

And as in most jurisdictions, very little handle comes from patrons at the tracks. In Ontario, about 10 percent of handle was bet on live races at tracks; 22 percent was bet on simulcasting at tracks; 49 percent was bet at off-track teletheaters; and 19 percent was bet through telephone/account wagering.