Deal for slots to remain at Georgian Downs

Posted March 11, 2013

At least for the next three years, Georgian Downs will continue to be home to OLG Slots. However, its fate as a live horse racing venue remains unclear.

On Saturday, the Great Canadian Gaming Corporation, "announced that it has entered into letters of intent with the Ontario Lottery and Gaming Corporation (OLG) for the continuation of slot operations at each of the Company's Georgian Downs and Flamboro Downs racetrack facilities."

The key difference about the renewed arrangement is under the new mission for gaming in Ontario, OLG and the hosts of its slot programs, are now Landlord and Tenant - profit sharing revenue from slots, is over. The present deal expires March 31.

"While the Company has had discussions with the Ontario Horse Racing Industry Transition Panel, it has not formalized transitional funding for continued racing operations at either Georgian Downs or Flamboro Downs," according to the press release announcing the slots deal. "We believe that securing lease agreements with the OLG will assist in further discussions with the Panel regarding transition funding for horseracing."

Each municipality hosting an OLG Casino or an OLG Slots-at-racetrack facility receives five per cent of the gaming facility's gross slot machine revenue from the first 450 slot machines and two per cent from any additional machines over that number. Georgian Downs has 1,000 machines. To date, Innisfil has received over $43 million since the OLG Slots opened in 2001.

And, until now, the horse racing venues received 20 per cent of gross slot machine revenue split evenly between the track owner and the horse racing industry. Since the launch of the program in 1998, more than $2.91 billion has been shared between racetrack owners and their horse people.

"However, based on terms agreed to in the Letters of Intent with the OLG, we continue to expect the Company's Ontario properties' (gross earnings) will decline as compared to the levels realized in 2012," according to the release. "Once definitive lease agreements have been signed, the Company will need to re-evaluate its assumptions used in the recent long-lived asset impairment tests for these properties. Based on the terms of the letters of intent, the Company expects that it may need to record long-lived asset impairment reversals for Georgian Downs and Flamboro Downs."

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