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Lawson feels time is now for single-event sports wagering in Canada
27th January, 18:54TORONTO -- Jim Lawson firmly believes the time is now for single-event sports wagering in Canada.
The issue gained some traction during last fall's federal election, however single-event betting remains illegal. But legalization seems to be gaining momentum again in Canada and Lawson, the CEO of Woodbine Entertainment Group, wants to ensure horse racing is well positioned if it happens.
"In Ontario alone, there've been many studies that show (horse racing) represents 30,000 to 40,000 jobs and you can spread that across the country," Lawson said. "We want to play a role in protecting the jobs horse-racing represents.
"The reason it's so important we have a role, I believe, is we have a non-profit mandate and with that we're going to be able to invest any net proceeds back into the industry, back into -- depending on how this gets structured -- youth sports, back into health care and education. There's a whole lot we can do as a non-profit mandate that other companies won't and can't do because they have shareholders and many are public companies."
The American Supreme Court lifted the federal ban on sports betting south the border May 14, 2018. Since then, many states, including New York and New Jersey, have legalized sports betting. Michigan is poised to come on board in March in time for the NCAA men's basketball tournament.
Once single-event sports betting becomes legal in Canada, Lawson said Woodbine would be a natural choice to get involved. Not only does the organization have experience with betting, it leases part of its facility for the operation of a casino.
"As the only company that has this capacity and is authorized to do legal, single-event sports wagering in Canada, we have grown our technology, our infrastructure, our management team, our relationship with the regulators," Lawson said. "We very much have a responsibility that's acceptable to the regulators and are running a very trusted product and system that people can rely on and have grown to trust throughout the entire country."
Lawson is emphatic horse racing isn't looking for a free ride. Rather, the industry wants to sustain its current work levels while ensuring there's room for future growth.
Lawson said some of the profits generated from sports betting could return to the industry in the form of increased purses. That would help Ontario racing remain competitive with top American racing organizations.
"What it would do is give this industry the ability to stand on its own and support all the jobs and the economic impact," he said. "In doing so, we'd no longer need a subsidy.
"Our mindset is not to think of this as a windfall for us. This is a way to do the right thing, which is let an industry participate in a way that will sustain jobs and keep the money in Canada to support the local economies."
Canadian horse racing was dealt a severe blow in 2012 when then Ontario premier Dalton McGuinty announced the cancellation of the Slots at Racetracks program. The revenue-sharing agreement generated $345 million annually that was split between track operators and horse owners/breeders.
The ensuing cash shortfall resulted in some track closures and many in the industry scaled back operations. That included Woodbine Entertainment Group, which laid off more than 100 employees, roughly 25 per cent of salaried positions, at its two tracks (Woodbine and Mohawk in Campbellville, Ont).
With legalized single-event sports wagering in the U.S., the fear is once Canadians cross the border to participate, it will be infinitely more difficult to get them to return here if and when it becomes legal.
"That's absolutely correct," said Brian Masse, an NDP Member of Parliament for Windsor West. "That underestimation is a real weakness in the government strategy on this because the more days that go by, the more customers who'll leave and it's 10 times more difficult to get them back."
Masse has been involved in two legislative attempts to make single-event sports betting legal in Canada. Earlier this month, he wrote Prime Minister Justin Trudeau requesting the government legalize it immediately.
Masse said Ottawa's reluctance is costing the country billions.
"The unregulated market offshore now is estimated at $10 to $12 billion," he said. "We have billions of dollars of infrastructure at risk."
Jeff Gural, the chairman of Meadowlands Racetrack, believes Masse's estimation might actually be low.
"I can tell you our business online at the Meadowlands is US$2.5 billion," he said. "So I think clearly $10 billion in Canada is probably a low number."
Gural can't believe single-event sports betting isn't legal in Canada.
"It doesn't make any sense that you wouldn't follow the U.S.," he said. "Any government that doesn't legalize sports betting isn't being smart because your options are 1) you can allow people in Canada to continue to bet illegally or 2) you can make it legal and regulate and tax it.
"Well, what choice do you have? I mean, we shouldn't even be having this conversation."
Gural said single-event sports betting has been crucial to Meadowlands Racetrack.
"We needed sports betting just to stay afloat because the Meadowlands was operating at a loss," he said. "Typically racing without slot machines or sports betting loses money.
"We've seen a decline in our handle as a result of sports betting . . . but it's much better because it's busy, it looks like a happening place, there's action, you've got people betting on horses, on sports and watching racing. It's really made the place much more fun to come to."
In October, Sandra Pupatello, a former cabinet minister in McGuinty's government and the federal Liberal candidate for Windsor West, said a Liberal majority would ensure legalized single-event sports betting. Trudeau's government was re-elected but with a minority.
Masse feels border communities aren't the only ones being hurt by American legalized sports betting.
"It goes beyond that," he said. "Even in the GTA, you have people there who'll basically go to the underground economy that otherwise would be open and want to support a regulated industry.
"They lose out on taxpayer dollars for infrastructure or whatever the province would decide where the revenues would go to."
This report by The Canadian Press was first published Jan. 27, 2020.
Dan Ralph, The Canadian Press