Justice Committee on March 9th, 2021

[Chris D. Lewis]

Good morning, Mr. Brassard. It's good to see you.

[John Brassard, Conservative, Barrie—Innisfil, ON]

It's good to see you again.

[Chris D. Lewis]

I don't know. I think that, like the marijuana situation, they're going to still provide a service, because some are still going to go the criminal route. Those who can't afford to bet legally but can borrow money from organized crime groups will still go that way, so that's still a concern. It's important to note that it will not eliminate organized crime involvement, just like the marijuana situation, where they're not out of the business at all. It will certainly cut back because people will have a safe way to do it, but right now they don't, so they go that other route.

As to specific loopholes around that, through technology and different things, I don't know. I don't understand that piece of the business. However, I know in terms of alcohol and gaming in Ontario, just to use that example, provincial regulators are very tied to the industry and they'll know exactly what holes they'll need to plug. Then others will emerge, and they'll plug those holes as well and hope for the best.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Thank you, Mr. Lewis.

I want to go back to Racetracks of Canada and the Woodbine Entertainment Group.

Obviously, COVID has been difficult for every sector of every economy. Your industry has certainly felt the brunt of it as well. Maybe you could just speak to the committee in terms of the impact that COVID-19 has had on racetracks and the Woodbine Entertainment Group.

[Jim Lawson]

I'll take that, although I'm sure we're all capable of addressing it.

[John Brassard, Conservative, Barrie—Innisfil, ON]

I'm sure you are.

[Jim Lawson]

We've suffered in a couple of major ways during the pandemic.

On one, I'll speak about Ontario. Woodbine Entertainment generates approximately 95% of the wagering revenue in the province. There are 15 racetracks in the province, and most of the wagering is on the Woodbine Entertainment product, both harness racing and thoroughbred flat racing. We were shut down in March, April and May on the harness racing side. Our thoroughbred meet in 2020 was scheduled to start in April and it also did not start until the first week of June, concurrently with our harness racing product. We were down a couple of hundred million dollars of wagering during that period.

Across the country, racetracks did not operate and we relied very much on simulcast wagering on other racetracks in the United States, which did operate. However, we were hurt substantially by not having our own product, which, as Mr. Ford mentioned, generates about $1.2 billion for racetracks across the country.

Through a lot of hard work and marketing, we managed to convert a lot of people to the digital product. I say “convert” because, for most of the year, once we got started in June, we were not allowed to have spectators. That took a while, but ultimately we did catch up.

While we dug a huge hole for ourselves during the early months, our wagering through digital online wagering caught up, not on an annualized basis but on a year-over-year basis. We managed to end the year down. We didn't put a big dint in the hole that was created earlier in the year, but we're confident that, as we look to 2021, we can run racing, which we're currently doing at Mohawk in Milton, and can run it without spectators.

[John Brassard, Conservative, Barrie—Innisfil, ON]

Maybe you can expand on that a little, on some of the discussions you've had with the government with respect to this piece of legislation. I know you talked about a carve-out. What else have you been talking to the government about?

[Jim Lawson]

In particular, we've talked about just the ways in which we will potentially be able to integrate racing. One thing Woodbine Entertainment does is that we have the only digital footprint across the country. We work with every racetrack in the country with our online wagering and we are hoping to work with the sports betting operators as they come into Canada.

As I said earlier, they like horse racing. We are dealing with the regulators, primarily the AGCO in terms of how we can integrate, and integrate our systems with them, to make this work for racing. If we proceed and have protections that this is going to ultimately be a good thing for the industry because of our regulated status, our responsible gaming and our other issues, we will work with these large operators coming into Canada.

[The Chair, Liberal, Iqra Khalid]

Thank you very much, Mr. Lawson.

Mr. Brassard, that concludes your time.

We'll now go to Mr. Kusmierczyk for five minutes. Go ahead, sir.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you very much, Madam Chair. As this is my first time appearing before the justice committee, I want to recognize the tremendous work that the committee has done on this very issue. I went back to the testimony of the last couple of meetings, and the amount of ground that you have covered is tremendous.

I also want to recognize the tremendous work of my colleagues MP Waugh and MP Masse in advancing this really important bill for our region.

The southwest region of Ontario—southwest of the GTA— is the second-largest horse-racing region in Ontario, and there are about 6,000 jobs locally here. That's about one-third of the employment provincially. There are eight racetracks, for example, in Sarnia, Dresden and nearby Leamington.

I had a chance to talk to Bob McIntosh, who is a legend in the horse-racing industry and is from a family of generations of breeders and trainers inducted into the hall of fame, both on the U.S. side and on the Canadian side. When you talk to him, he talks about horse racing as a real rich ecosystem. He talks about how the horse-racing industry is a very labour-intensive sector that really supports a lot of direct and indirect jobs.

I just wanted to ask you, Mr. Lawson and Mr. Ford, if you could maybe talk a bit about it. Give us a sense of what goes into horse racing, of what types of businesses and jobs are supported and what some of the costs of running those operations are. I really just wanted to underline that.

[Jim Lawson]

Bill, I'll go ahead hesitatingly. You may want to add to it.

Listen, there's no question that it is a very labour-intensive industry. On the thoroughbred side when we run live racing at Woodbine, studies show that there are approximately 2.1 persons employed per horse. We expect to have 2,000 horses on the Woodbine backstretch within a month or so. There will be 3,000 non-Woodbine employees employed on the Woodbine backstretch alone, and that infrastructure is a little different from the harness side, as you described, in southwestern Ontario. Most of the employees there are on training centres scattered throughout southwestern Ontario.

There are 60 off-track facilities, training facilities, within 15 miles of Milton and in southwestern Ontario. It's very labour intensive and it goes everywhere from hay farmers to seed farmers to blacksmiths. Christina Litz mentioned it earlier. It is a very labour-intensive industry and a very important rural industry. It's the backbone of a lot of rural Canada.

This phenomenon has a long history of supporting jobs, and I think that's in large part why the Government of Ontario is so supportive of our industry—because of the 25,000 jobs that are represented in Ontario alone. It also has a vast employment market across the country. As Bill Ford mentioned earlier, there are vast economic spinoffs from the economics of this industry. That's why we're here today, to have this committee understand and be aware of the risks involved if this industry is not protected the way that the government bill came forward and protected our industry.

I don't think, by the way.... We have had conversations with MP Waugh and MP Masse, and there was no intention to hurt the horse-racing industry. We understand that. This is now an opportunity to merge these two bills and to make sure of how this needs and deserves that protection in order to protect the families and the many livelihoods across this entire country.

[William Ford]

The only thing I would add to what Mr. Lawson has said is that it's quite unique. We have many tracks that are in big urban settings and employ a lot of people, but we're also massive job generators in the rural communities.

Also, I'd be remiss if I did not again address an earlier question on how COVID has hit the industry. It has been devastating. We have just recently heard that Marquis Downs is not going to run its meet for a second straight year because of the problems with COVID. I think Jim indicated earlier that it was this pivot to digital that has saved the industry and has allowed us to keep the industry alive and keep those jobs going. These are very trying times right now.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I know that I'm just about out of time—

[The Chair, Liberal, Iqra Khalid]

You are completely out of time, Mr. Kusmierczyk.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you.

[The Chair, Liberal, Iqra Khalid]

We'll now go to Monsieur Fortin for two and a half minutes.

Sir, go ahead.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Madam Chair.

My question is for Mr. Ford.

We all know that the gambling and lottery industry generates an enormous amount of money. This is certainly the case at racetracks. We understand the desire to protect the many jobs created by the horse-racing industry.

That said, problem gaming is a reality that must also be considered. Compulsive gamblers, who currently place bets on sites that are, in some cases, illegal or foreign, would spend their money on legal sites. In Quebec, this matter would likely be handled by Loto-Québec, which is investing money to combat problem gaming.

What is Racetracks of Canada doing about problem gaming?

[William Ford]

It's a very serious issue and one that we take very seriously.

The first most important thing is to address the black market and the grey market. People who are wagering offshore do not have the protections that we think the licensed industry has. We have our employees always taking this front and centre. It's educating our employees, our frontline staff, to identify people who may have an issue and to step in where necessary. It is something that we're learning to do more of and better now on the digital footprint—identifying patterns of problem gaming, and stepping in and taking those steps.

It is absolutely imperative to our business that problem gaming is addressed, and we take it seriously. As I said, I think the number one step would be to get rid of the grey market and the black market.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Mr. Ford, can you tell us how many compulsive gamblers you have been able to help? Do you have any statistics, any figures for this?

We have a few seconds left.

[William Ford]

I can say that on a regular basis—probably once a month—we will turn somebody's account off, reach out to them and give them the name of a contact.

It is something that we take seriously and do regularly, but I don't have numbers.

[The Chair, Liberal, Iqra Khalid]

Thank you, Mr. Ford.

[William Ford]

Thank you.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you.

[The Chair, Liberal, Iqra Khalid]

Thank you, Mr. Fortin.

We'll now go back to Mr. Masse, for two and a half minutes.

Go ahead, sir.