L

Tel (604) 588-3793

Fax (604) 588-9020
r
i

Brian R. Hayes
15275 93A Avenue
Surrey BC V3W 0E6
Tel (604) 588-3793
Fax (604) 588-9020
si?

COUNTER-PON
IT

1999BCHORSERACN
I GREVE
IW
CONTENTS

1. COUNTER-POINT PART I
2. COUNTER-POINT PART II
3. FACTS & FIGURES:
9H
I - HORSE RACING IN CANADA 1997
II - PER CAPITA GAMING SPENDING BY PROVINCE
III - HASTINGS PARK ON TRACK WAGERING 1994 - 1999 (est)
IV - PURSES PER RACE CF: USA/HASTINGS PARK
V - STARTERS/RACE CF: USA/CANADA/HASTINGS PARK
VI - USA RANKINGS 1997 $PER CAPITA BET LIVE RACES -
|<fl THOROUGHBRED ONLY MEETS
VII - USA RANKINGS 1997 LIVE RACES $HANDLE - THOROUGHBRED
ONLY MEETS
VIII - 1998 BREAKDOWN OF RACES STATE/PROVINCE - USA & CANADA
IX - USA/BC EFFECTIVE PARI-MUTUEL TAX RATE
X - BC/ONTARIO FOAL CROPS 1993 - 1998
XI - USA FOAL CROPS 1993 - 1998
XII - 1999 YEARLING SALES RESULTS CF: USA - BC
XIII - USA RECENT TRENDS IN HORSE RACING HANDLE 1991 - 1997
XIV - TRENDS IN HORSE RACING/HANDLE 1974 - 1997 - CURRENT
DOLLARS/CONSTANT DOLLARS
XV - PARI-MUTUEL WAGERING IN THE USA 1997
XVI - TRENDS IN PARI-MUTUEL HANDLE IN THE USA 1974 - 1997
w
\ XVII - TYPES OF PARI-MUTUEL HANDLE IN THE USA 1997
XVIII - SOURCES OF 1997 HANDLE ON HORSE RACING - USA 1997
XIX - LIVE RACING DAYS/LIVE RACES RUN - USA 1997
XX - PARI-MUTUEL HANDLE (LIVE RACES)/PARI-MUTUEL HANDLE -
INTER TRACK WAGERING - USA 1997
XXI - LIVE MEETING ATTENDANCE/AVERAGE ATTENDANCE LIVE MEETS
- USA 1997
p) XXII - PARI-MUTUEL HANDLE - OFF TRACK & TELEPHONE/TOTAL
PARI-MUTUEL HANDLE - USA 1997
XXIII - HBPA OFFICIAL STATEMENT OF DIRECTION FOR THE FUTURE
,Wl OF HORSE RACING IN BC - SEPT 20, 1988
BLUE SECTION:
XXIV PACIFIC RACING ASSOCIATION - FINANCIAL PERSPECTIVE
1995 - 1998: SCHEDULES 1 - 8
XXV THE BC HORSE RACE IMPROVEMENT FUND 1994 - 1997
GREEN SECTION:
XXVI - OFFICE OF THE INFORMATION & PRIVACY COMMISSIONER
RE: REQUEST FOR REVIEW
ip?

COUNTER-POINT

1999 BC HORSE RACING REVIEW

PART I
The Hon, Joan Smallwood, Minister Responsible for Gaming, issued a
News Release on September 24, 1999 headlined, 'SMALLWOOD SEEKS
INPUT ON HORSE RACING REPORT', regarding the NDP commissioned
review of the B.C Sport of Kings.
The Minister stated, "Public input is needed before decisions can
be made on the recommendations of the Horse Racing Review" and
that, "Before our government considers the recommendations dealing
with gaming, I want those recommendations to get full public
scrutiny "
SI
i H o w e v e r, S m a l l w o o d a d d e d , " . . . o n e r e c o m m e n d a t i o n w i l l n o t b e
considered. Our government ended gaming expansion. That policy
m
P mc haacnhgi ne e sm. e aBnust rt h
aec e tr reapcokrst w
c loena' rt l yg esth ot hwes gt oh -aat h e
t haed vt o
i t ailni tsyt a ol lf st lhoet
industry doesn't depend on that single issue." (Not entirely true -
her statement clearly shows that she did not read the report or if

r s h e d i d , meaningful
d o e s n o t analytical
u n d e r s t a nability.
d t h e In
r e pao r10
t opoint
r d o eSummary
s n o t p o of
s s eFindings
ss any
set out by report consultants PricewaterhouseCoopers, the word
m RECOMMENDATION was used in only two of the 10 Findings, one of
I which was regarding installation of slot machines at racetracks).
1 So much for "FULL PUBLIC SCRUTINY. "
P
? Minister Smallwood has previously stated she "is not keen on
gaming." Her statements in the September 24, 1999 press release
reveal her negative bias.
A public survey contained in the report indicates: 81% of the BC
public participates in some form of gaming, 12% are non-gamblers
who are not morally opposed to gambling, and a small minority 7%
are non-gamblers morally opposed to gaming.
From her statements and actions Minister Smallwood counts herself
as part of the 7% religious minority opposed to gaming - revealing
her negative bias as Minister Responsible for Gaming in British
Columbia. And thus her precipitous action to forbid slot machines
at racetracks without even consulting with the public as promised.
Jp?

jpl
There are two basic philosophical approaches regarding the
acceptability of gambling activities in society. One approach
requires very little analytical thought. The academic literature,
pi in a religious context, calls this narrow approach the
"deontological" approach. (For more discussion of gambling and
religion see W.N. Thompson, Legalized Gambling: A Reference
Handbook, Santa Barbara ABC-Clio, 1997, 2ed).
This approach is often advanced by fundamentalist protestant
groups,
m accepted by Hinduit is and
part Muslim
of the faiths.
Methodist Socialholds
It simply Creed,
that it gambling
is also
is always wrong - end of discussion. If we accept this view, we
need not examine questions like - should we have slot machines in
^ racetrack facilities? The question is answered before it is even
asked. This is the approach being adopted by Minister Smallwood by
pandering to the views espoused by 7% of the BC population without
s, even considering what the remaining 93% may think or say. So much
for impartiality, so much for consultation. Perhaps the Minister
will advise the BC taxpayers the total cost of the report? And
after all this, she now has Professor Meekison seeking racing
[HI
industry input, for what we may ask?

[SI B C H O R S E R A C I N G R E V I E W E X E C U T I V E S U M V E A R V PA R T I

Industry Overview
BB|
The report states, "Given the recent expansion of casino gaming
(introduction of slot machines and potential development of eight
destination casinos) all other sectors, including pari-mutuel
r should have a reduced share of the BC gaming industry activity over
the next few years." The report however, fails to mention that BC
still has the lowest per capita gaming spending in Canada. In 1996,
per capita gaming stood at $231.50 as compared to that in Alberta
of $447.40. (see Facts & Figures II) . With the right gaming product
mix there should be opportunity to increase per capita gaming
pi
expenditure across all sectors.
"As compared to the lottery and casino sectors, the pari-mutuel and
bingo sectors have not experienced growth, and have remained
pi relatively static since 1992/3."
This statement is not accurate, particularly with respect to live
thoroughbred pari-mutuel wagering in BC. There has been a decline
of disastrous proportions both in handle and attendance at Hastings
Park, (see Facts & Figures III).
IP!
The overview continues; "Historically, horse racing was the first
legal form of gaming permitted in the majority of these
jurisdictions (Canada and the USA) and, as such, it did not have to
r compete for a share of the gaming market."
-2-
p
r'

I This monopoly or non-competition factor is relevant and of some

L importance. In essence, the government put racetracks in a non
c o m p e t i t i v e p o s i t i o n i n t h e fi r s t i n s t a n c e . T h e n t h e s a m e
p government created lotteries, licensed bingo halls, charity
! casinos, and destination casinos with slot machines - allowing
competition that was devastating to track operators, the owners,
p breeders and horsemen. Equity is the reason to allow racetracks to
install slot machines, to level the playing field made uneven by
government. This equi ty is in the public interest because
government helps everyone generally when government accepts that it
P m u s t n o t t h r o u g h i t s p o s i t i v e a c t i o n h u r t a n y o n e s p e c i fi c a l l y. S l o t
i m a c h i n e s s h o u l d b e u s e d t o r e s c u e t r a c k a c t i v i t y, p a r t i c u l a r l y l i v e
racing, because the government was part of the reason why track
pi activity is failing: i.e. equitable relief.
\\
"Horse racing was also viewed as different than other forms of
p gaming, due to its 'sporting nature' and agricultural roots. For
t these reasons, the horse racing sector has enjoyed considerable
political and general public support," say PricewaterhouseCoopers.
f 1 O b v i o u s l y, f r o m M i n i s t e r S m a l l w o o d ' s n e w s r e l e a s e , h o r s e r a c i n g n o
longer enjoys much in the way of political support despite the
agricultural based economic activity and employment benefits the
p i n d u s t r y g e n e r a t e s ( B C A g r i c u l t u r e M i n i s t r y R e p o r t , 1 9 9 8 ) . F u r t h e r,
| this distinction between horse racing, a 'sporting event' and other
forms of gaming is significant - being labour intensive, the spin
p off economic benefits produced are more advantageous to society and
! because of its nature, history and tradition is generally accepted
II and supported by the public. A survey carried out for the
government in the mid-nineties by Viewpoints Market Research found
f that above all others (i.e. casinos, destination casinos, bingo
[ halls, etc.), a racetrack was found to be the most "completely
acceptable" place to gamble.
^i
j P r i c e w a t e r h o u s e C o o p e r s g o o n t o s a y, " O v e r t h e p a s t 1 0 - 1 5
years the introduction and rapid growth of other forms of
have impacted horse racing activity levels. The decline has led to
r g a m i n g ,the
m aclosing
i n l y l o t tofe r imany
e s a nracetracks
d c a s i n o s ,including
i n h o r s ether a relatively
c i n g j u r i snew
d i c t i oand
ns
expensive Arlington Park Racetrack serving Chicago, a major market,
jp being the 3rd largest city in the US." If this can happen to
Arlington in Chicago, then only the grossly naive believe that this
will not happen to Hastings Park in Vancouver and Fraser Downs in
C l o v e r d a l e , l e t a l o n e t h e I n t e r i o r.
The report continues,"that governmental responses have been tax
reductions, introduction of simulcasting, and other gaming
activities." (i.e. slot machines).
Tax reduction is a form of government bail out familiar to the
current BC government. However, as can be seen from 'Facts &
-3-
p?

Figures - IX', the well of tax relief available in all N. American

L r a c i n g j u r i s d i c t i o n s i s r u n n i n g d r y. I n 1 9 9 9 , t h e B C g o v e r n m e n t
will return over 5% of the 7% tax collected on thoroughbred
^ w a g e r i n g t o t h e i n d u s t r y. W h a t i s l e f t o v e r i n t h e p r o v i n c i a l t a x
coffers will not be enough to fund major facility upgrades let
alone develop a new racetrack capable of competing with the best in
*i North America (less than 2%). It is a point of interest that the
PRA benefits from one of the highest pari-mutuel takeout rates on
exotic bets in North America, (see Facts & Figures IX).
Slot machines on the other hand would provide the industry with the
ability to generate revenue to self-support, rather than self-
destruct while waiting for government handouts - and a win-win-win
PI situation for local government, the provincial government and the
i n d u s t r y.
pi
O R G A N I Z AT I O N A L . E N V I R O N M E N T

"Horse racing is regulated under a separate section of the Criminal

f Code of Canada (the report advises), and is the only gaming sector
I that is regulated by both the federal and provincial governments."
i This statement is inaccurate. All gaming in Canada is covered by
the Criminal Code of Canada because without exceptions approved by
Parliament all gaming would constitute a criminal activity. Other
p, forms of gaming such as lotteries and casinos are also regulated by
the Province or why do we need the Lottery Act, the BC Lottery
L Corporation Act and Regulations, etc.?

P Referring further to the regulation of horse racing, the report

I consultants' consider that, "Compared to other gaming sectors this
situation (regulation) adds to the perceived complex nature of the
i h o r s e r a c i n g s e c t o r . "
This is a classic example of if you start with a false premise you
reach a false conclusion. This report makes a number of false
assumptions or begins with a number of false premises and thus,
c e r t a i n o f i t s c o n c l u s i o n s a r e fl a w e d a n d t h e o v e r a l l r e p o r t i s
fl a w e d .
IP
1 One of the few conclusions contained in the report is with regard
to a loosely structured industry lobbying group, the Horse Racing
.gn Alliance of BC (HRABC) . "Anything that would strengthen the HRABC
or other similar organization would help the sector itself and the
provincial government deal with the long term viability of the
m horse racing sector."
^ What is the basis for this categorical statement? The HRABC was set
up as a lobbying group (an alliance of both thoroughbred and
P standardbred associations) and should be no more than that. Another
L
-4-
fm>\
level of bureaucracy certainly will not aid in the long term
v i a b i l i t y o f t h e h o r s e r a c i n g s e c t o r. E s s e n t i a l l y, t h e l o n g t e r m
viability of the industry is inextricably linked to economic
m factors and not much more than that.

Certainly no government/pub lie funds should be funnelled to an

'm entity which is not accountable or answerable to the public.
Witness the lack of control or accountability for public funds
_ provided to the BC Racing Commission which by statute is supposed
to be accountable (which we can demonstrate does not adhere to the
L h i g h s t a n d a r d e x p e c t e d , a n d r i g h t l y s o , o f a p u b l i c b o d y, ( s e e
Facts & Figures XXVI). One can imagine the abuses and
*i obstructionist tactics that may occur if an entity is not obliged
to be a public, accountable body when receiving public funding;
simply examine the actions of the Pacific Racing Association set
m out in 'Facts & Figures XXVI', referred to above.

O P E R AT I O N A L . E N V I R O N M E N T

The report gives rise to three (3) significant issues that need to
be addressed; (1) the present method and level of taxation, (2) the
B\ use of simulcasting and (3) the marketing and promotional strategy
of individual racetracks and the sector as a whole.

pt| "Stakeholders have noted that the federal tax allowable deduction
for raising and owning racehorses is significantly lower than other
businesses. While this issue was not focused on in the report, it
should be explored further with the federal government", suggests
the report.
Commissioned to be a comprehensive review, why was this important
issue not considered in more detail? Why has the HRABC never raised
this issue and pursued it? Is the HRABC only narrowly focused upon
increasing and securing its own status and not the plight of the
JS|
entire industry which is interdependent? Lack of incentives in the
tax system for horse ownership was one of the key reasons given by
Hastings Park for the decline in the running horse population.
(Canadian Thoroughbred Horse Society Magazine - Summer 1999 issue).
On the question of pari-mutuel taxes, BC imposes a tax of 7% on the
t o t a l o f a l l b e t s m a d e i n B C , a n d a s s t a t e d e a r l i e r, c u r r e n t l y
returns in excess of 5% to the industry.
The report relates that, "Given the historic importance of the
n h o r s e r a c i n g s e c t o r i n B C ( e c o n o m i c b e n e fi t s a n d t i e s t o t h e
agriculture sector) as well as the sector's current economic
health, it is recommended that the provincial tax of 7% be reduced
to a level that covers the operating costs of the British Columbia
pi)
Racing Commission only (BCRC). In addition, we further recommend
-5-
PD

that the provincial portion of the tax be redistributed back into

the sector for allocation to strategic areas."

Rioa Suites
r Paying in timelyinmanner
Las Vegas for or whatever
junkets to the"allocation
Voodooto Lounge strategic at areas
the
m e a n s " , a n d d e s p i t e i t s i r r e l e v a n t " d e fi n i t i o n " s e c t i o n o f
p innocuous terms, the report' s ma j or recommendation regarding public
monies speaks of this "allocation to strategic areas" without
L explaining what this means in reality and the rationale for the
m agenda same - why? Purposeful
Policyvagueness mayand servetheits NDP
purpose for a hidden
of the Gaming Secretariat dominated old
boys network which has brought the industry to the brink of
bankruptcy. But how can the public meaningfully respond to the
m report if it does not know precisely what it is responding to? The
2,000 owners and trainers can no longer afford to pay for the heavy
bureaucracy created by adding the HRABC to the PRA and BC Racing
bp, Commission to oversee this "allocation to strategic areas" of tax
rebates given by government.
" T h e s e c t o r n e e d s t h e fl e x i b i l i t y t o a l l o c a t e r e v e n u e t o
m s t r a t e g i c a r e a s i n a t i m e l y m a n n e r, " t h e r e p o r t c o n t i n u e s .

What part of the sector? Is the report alluding to the HRABC?

m If so, from the performance of the HRABC to date it would appear
wholly unsuitable to fulfil such a mandate.

industry additional revenue wherever possible via slot machines.

r T h e r e a l a n s w e r i s t o l e v e l t h e p l a y i n g fi e l d b y p r o v i d i n g t h e
The NDP had an efficacious 1997 Dan Miller policy in place, "Slot
w machines will be installed if requested by the tracks. " What is the
need to spend $300,000, $400,000 or whatever, for a Toronto based
consultant's report to ignore the obvious and recommend an inferior

r b a n d - a i dprivate
p l a csector
ber eused eand investment.
m e n tin pfact ? APari-mutuel
o l i c ywouldd dbe n a l l y, taxpayer
i t i oinsufficient dollars
t h e toi n dfinance
ustry mshould s enot
u s ttype
the eof
k
s? racing facility needed to compete successfully with the best tracks
in North America.

pi SIMULCASTING

The report recognizes the fact that, "horse racing has to compete

r on a global basis....and that, this has changed the way racetracks

operate. Simulcasting will be an important tool in this....and the
sector should embark on a strategy....consistent with a long term
s e c t o r - w i d e s t r a t e g y. "
pi
What the report fails to clearly analyze is the impact of Hastings
Park's simulcast programme which has ballooned to over 1700 events
in 1999 - (see Facts & Figures III). On track live handle has
plummeted from $129m in 1994 to approximately $39m in 1999.

p -6-
Pi

At close of the 1999 season, on track betting on live, plus

L simulcast wagering will have declined by at least $30m. It is
s i g n i fi c a n t t h a t a f t e r r a p i d e a r l y g r o w t h , t h e r e h a s b e e n a
f distinct slow down in $ bet on Hastings Park simulcasting in 1999.
This, in line with the USA experience. The major increase in
numbers of simulcasts these past two years has resulted mainly in
p r e d u c i n g t h e a v e r a g e h a n d l e p e r e v e n t . D o n o t l o o k f o r s i g n i fi c a n t
simulcasting growth (5% at best) in 2000.
The report talks about embarking on a strategy which is consistent
w\ with a long term sector-wide strategy - yet does not critique or
yield up any comments, observations or recommendations regarding
EXISTING sector-wide policies and procedures on simulcasting. Is
this because none exist?
Whilst recognizing that the live racing product generates the
majority of local economic benefits, the report says "balance this
(live racing) with simulcasting" but presents no options or
suggestions.
pi
L MARKETING AND PROMOTION

p "Revenue gained from any reduction in the pari-mutuel tax could be

' used to fund this initiative (marketing and promotion)," says the
report.
\ W h o w o u l d d i r e c t t h i s f a c e t o f t h e i n d u s t r y ? S u r e l y n o t a fl e d g l i n g
lobbyist group like the HRABC? It would take time and be costly to
ramp up a new and effective marketing arm for the industry. Just
ask the Alberta Racing Corporation.
Whatever happened regarding the statement made in April, 1998 by
m the then Chair of the PRA (Hastings Park), Don Winton who said at
I the time that, "no one is going to have a better business plan.
Live racing on the track is our priority." The end of the 1999
m season will see a two year drop in live handle of some $28m! The
f. list of industry interviewees did not include the author of this
L plan. We wonder why?

f1 Marketing and promotion of the sport of racing with a limited

budget calls for a highly creative and aggressive approach not for
the faint hearted, and more than just a simple talking point of an
p industry 'initiative'.
i
The PRA has spent over $5m on promotions in six years and not found
_ the formula.
What happened to the new owner recruitment drive? How many new,
first time owner licences have been issued in the last two (2)
'P years?

m -7-
WI

The report consultants noted that "to complete the review, we

reviewed the state of the entire gaming industry in British
Columbia and the rest of North America. . . .and conducted site visits
IfI t o v a r i o u s r a c e t r a c k s ( i n ) t h e U n i t e d S t a t e s . " A d d i t i o n a l l y,
consultations with horse racing sector stakeholders were held "to
compile critical insight, knowledge and opinions on a variety of
economic issues that will influence the outcome of (their) review."
Under the circumstances, it is surprising that no meetings were
held with the Executive of the National Thoroughbred Racing
Association (NTRA) , who are responsible for the national marketing
of racing in the USA or designated marketing professionals from the
New York Racing Association and the major Southern California and
ra Kentucky track operators. All of whom have a record for
i m p l e m e n t i n g e ff e c t i v e m a r k e t i n g i n i t i a t i v e s - a s d o e s a n
interviewee of the report, Mr. David Willmot, President and CEO of
Presidential National Gambling Impact Study Commission would surely
r t h e O n t ahave
r i o Jproved
o c k e y useful.
Club. Discussions with members of the US
si
ECONOMIC ENVIRONMENT

l O n t h i s s u b j e c t , P r i c e w a t e r h o u s e C o o p e r s s a y, " T h e h o r s e r a c i n g
industry is facing a number of major challenges. While a number
have responded to these challenges by introducing new forms of
gaming at racetracks (slots) and reducing taxes, the success-of
\ these initiatives are not fully proven."
How much proof do you need regarding slot machines? (e.g. the case
H*l against O.J. Simpson has not fully been proven - right!!)
Witness Prairie Meadows in Iowa. Entered bankruptcy in 1991. No
SS) racing in 1992 and a short meet in 1993 was not successful. Slots
were introduced for the 1995 meet. Purses only $1m in 1994 prior to
slots now exceed $14m, attendance averages 10,000 per day and the
handle for 1999 is up 16% over 1998.
p?
West Virginia. Slots at Charles Town introduced in 1997 have
brought the track back from extinction. With a state population
BP| base of just over 2.1m, $22.9m was paid out for racing purses in
1998. Purse account has a fall balance of $400,000 and daily purses
are predicted to reach $125,000 in 2000.

- t o a Kentucky
f u t u r e wand
i t h Florida,
s l o t s . plus other racing jurisdictions are looking
m In 1998, 18 racetracks in Ontario were approved for slots. Windsor
Raceway (712 slots) was the first to start operations. Live handle
on racing is already up by 28%. Fort Erie installed 1200 slots on

r Sept. 12, 1999. Woodbine will open up an opulent slots area in

January 2000.
-8-
SB)

Wi
New Mexico' s Sun land Park and Ruidoso Downs are both breaking track
L attendance and handle records since the advent of slots with
waiting lists for stall bookings.
I A question for Messrs. PricewaterhouseCoopers. Do they understand
the racing industry better than Mr. David Willmot, President of the

r O n t a r i o JObviously
o c k e y C l uwhatever
b? We w heo nsaid,
d e r wnobody
h a t h e listened.
told them about slots?
The Executive Summary of the Report continues: "....the future
r h e a l t h ohorses
f t h e and
s e c t attendance
o r i n B C ati s local
c o n t ivenues
n g e n t to
u p obet
n lon
o c alocal
l i n vraces.
e s t m eThose
nt in
improvements to the sector which focus on these two factors, have
* a greater likelihood to positively impact the sector and maintain
longer term viability." (i.e. slot machines. This report makes many
statements in support of a slot machine policy but does not make an
a u n e q u i v o c a l s t a t e m e n t i n f a v o u r o f t h e p o l i c y. )
The proposition of local investment in horses is a matter of
economics as indicated earlier - Revenues minus Expenses = Profits.
m Thus, higher purses (stimulated/supplemented by slots), plus
federal tax relief of a greater magnitude equals a more
advantageous economic situation for owners and breeders. This
m c o n t i n g e n c y i d e n t i fi e d b y t h e r e p o r t c a n b e f u r t h e r m e t w i t h t h e
introduction of slot machines and their resultant revenues but the
report is reticent in making such a connection. The analysis
_ u t i l i z e d b y t h e r e p o r t i s s u p e r fi c i a l . T h e r e p o r t i s l o n g o n fi l l
(two volumes), and short on substance and logical solutions.
The report also indicates that the current market potential in the

r BC horse racing sector is estimated to be between $178.4m and

$208.1m. Based on statistics provided by the Canadian Pari-Mutuel
Association (CPMA), the estimated amount of total wagering by BC
Gaming customers on all racing events (live and simulcast) was
approximately $177.8m in 1998 (saturation level). The horse racing
sector must increase its player base or increase player activity.
If one accepts the accuracy of this conclusion, and if at this
s a t u r a t i o n l e v e l r a c e t r a c k s c a n n o t e ff e c t i v e l y c o m p e t e , o r a r e
becoming uneconomic, then the only real solution is to provide the
f^i tracks with an additional form of revenue; i.e. slots OR
continually bail them out with taxpayer dollars a la Skeena
Cellulose, Canadian International Airlines, etc., etc. - a proven
f a i l e d p o l i c y.
From the results of the surveys, it is evident that current market
pi
potential of the horse racing sector could be increased in the
future. Contingent upon improvements in a number of areas,
including quality of facilities, operations of the facilities
(parking, admission, program costs), horse owner prizes and costs,
gaming customer prizes and customer betting education.
-9-
pi
SI

jSl
Quality of the facilities: With Emerald Downs Washington racetrack
just having completed its fourth meeting and posting a record daily

r
average mutuel $ handle of $1,241,239 during its 97 day 1999
meeting, and a new destination resort racing complex planned for
Calgary, it may be provident for the BC racing industry that a new
state-of-the-art thoroughbred racing facility is proposed to be
pn built in Richmond. The $160m private sector development includes
racing circuits of 1 1/4m dirt and 1m turf, a unique family
entertainment centre for up to 20,000 racing fans, plus quality
backstretch facilities to attract the best horses and horsemen in
North America. Live racing will be the key entertainment offering.
A major marketing focus will be the export of the 'live' Richmond
signal and no slots will be needed to fund operations/financing.
S)
The report concurs that "Track facilities are an important economic
p a r t o f t h e h o r s e r a c i n g s e c t o r. T h e c u r r e n t l a n d l e a s e

r arrangements of the Province's two largest racetracks are such that

the sector cannot properly plan and carry out a long term strategy
for the sector. Further, given the results of the public opinion

r surveys regarding the future market potential and recent gaming

policy announcements within these parameters, the horse racing
sector must improve its facilities (appeal of facilities is an
important part of market potential), to help ensure the long term
pi stability and viability. The use of slot machine revenues could
assist the sector in improving its facilities." (more than "could
assist" - the report should be more emphatic - slot machine revenue
will not only assist in the improvement of facilities; improved
facilities will result.)
As to improved racetrack facilities for thoroughbreds in the Lower
pi Mainland, Sungold's proposal for the Richmond racetrack is the only
one on the table, is endorsed by the Horsemen's Benevolent and
Protection Association (HBPA) representing over two thousand
owners, trainers and horsemen who want a stand alone facility, yet
curiously it is never once mentioned in the oft times verbose
report. Why is that? Is it because private enterprise is prepared
on its own initiative to invest $160m in the type of world class
facility that has been the call of the industry for the past 20
years? Do certain Board members of the PRA have an agenda they are
not revealing to the industry that pays their stipends and
expenses? Is it because political pressures were brought to bear on
PricewaterhouseCoopers in the report preparation? Just how many
drafts were prepared and re-edited before the report was finally
pi issued? Perhaps the consultants will tell us?
It is interesting to see what little has been achieved in the past
pi eleven years. In a letter dated September 20, 1988 to the
provincial government under the heading 'H.B.P.A. of B.C. Official
Statement of Direction For The Future of Horse Racing in British
Columbia, ' the then H.B.P.A. President, (now PRA General Manager)
said, "A racing surface of at least one mile in circumference
-10-
 pi
together
L accommodate with appropriate
thoroughbred horse amenities mustfour
racing within be years
made of
available
April 1 to,
1989. (see Facts & Figures XXIII).
A significant date perhaps!! In the real world of business, before
one directs anyone that they must do something one has to be in a
m p o s i t i o n t o c a l l t h e s h o t s . A s L a r r y K i n g o n C N N s a i d r e c e n t l y,
"Anything is possible if you believe in magic. " What is the rabbit
the PRA are going to pull out of the hat to stem the tide of horse
w e v e r i nowners
creasingwho num are
b e rtrucking
s d u e ttheir
o p o good
o r m ahorses
nageme out
n t of
a n dthef a province
c i l i t i e s ? in
If
racing in the Lower Mainland is to flourish, meet the increasingly
sophisticated demands of the 2 million GVRD population and capture
^ a fair share of tourist dollars, Hastings Park is a no-go. Anyone
with a modicum of business sense would know that the 2% tax rebate
the PRA and HRABC are begging for will not be sufficient to finance
m a new facility - and would hardly cover the petty cash expenditures
of an increased racing bureaucracy. Has the PRA asked one of the
most astute owners and developers in BC (Peter Redekop) how much

facility? Government money cannot (and should not) meet that

r c a s h u p dfer m
o na tn dw. oTuhl ed pbrei v ar teeq uv e
i rnet d
u r et o c abpui ti al dl i s a
t sn a$n8d 0 r i-s k$ 1m6a0n am
g ei lml ieonnt
specialists are those to look to for a solution.
pi

Certainly the failure to even mention the Richmond Racetrack

proposal raises a sinister spectre of report tampering. It cannot
m be because nobody was aware of the project or one of its
principals, Kim Hart. After all, the industry gladly accepts the
substantial money Mr. Hart pumps into the industry as a leading
w\ thoroughbred owner in BC.
Maybe the political silence on the Richmond proposal is because if
the project went ahead, all those NDP-ers in industry management
who dominate Hastings Park and the HRABC notorious cloak and dagger
operations, would no longer be able to feed and feast off the
industry - they would be out of work!
jp
In a BCTV News Hour Interview on October 4, 1999, Ms. Smallwood,
when questioned on her (biased) turnaround on slots at racetracks
said, "if they (the horse industry) need that sort of activity
(slots) then the industry is in very serious trouble. There are
other things we can do." Let us have some definitive explanation of
that statement Ms. Smallwood - like NOW. What are your views on
say, the Richmond Racetrack proposal? That should not be too
difficult as they are not asking for slots.
What the industry needs to survive is horses, $ handle and horsemen
r - not a policy of NDP handouts, jobs for the boys and NDP style
financing - No Down Payment; No Debt reduction Plan.

- 11 -
jSPI

pi
SUMMARY OE FINDINGS

1. Any government policy which places the horse racing sector on

r t h e s a m e f oability
o t i n g of
a s horse
o t h e rracing
gamintog compete
s e c t o r s for
wouitsl d fair
e n hshare
a n c e oft h ethe
gaming market in BC.
ijpj
Yes, a level playing field, as suggested earlier, i.e slot
machines at BC racetracks wherever approved by the local
m government.
2. Long -term view of the sector - "What does the province want
the horse racing sector to look like in the future?"
The fact is industries evolve; the BC racing industry has been
declining and is fighting for survival. The question that
m should be asked by government if it really wants the industry
to survive is, how can government help?
The report says "Any policy change that the Province implements
for the horse racing industry must be consistent with a long
term vision for the sector."
p Back in 1997, Dan Miller's slots at tracks policy is consistent
with a long term vision. As has subsequently been demonstrated
by many other racing jurisdictions. Ms. Smallwood chooses to
m summarily dismiss her current party leader's policy in favour
of short-term tax bailout - contrary to the findings of her own
report.
m In defence of Ms. Smallwood, the PRA operators of Hastings Park
were given a mandate in 1994 to provide the leadership and
communicate a long term vision for industry success. The PRA
m has been a miserable failure in this respect.
Which begs the questions. Did PricewaterhouseCoopers identify
pi just what unified long term vision for the industry was held by
the PRA Board of Directors and its General Manager? Did they
review the PRA strategic plan and performance evaluation
procedures? What conclusions did the consultants reach with
pi
regard to the operation and management of the major track in
BC? An insightful report would address these matters.
"Long term vision" is the most oft used phrase in the report
and while many questions were posed on this matter, no answers
were provided or recommendations made - a critical failure for
a report, the cost of which is yet to be revealed.
STRENGTHEN THE HRABC - The lack of rationale and timing for
this ill conceived recommendation has been addressed earlier.
It is interesting to note that the HRABC consultant was an
-12-
5p)

H
Assistant to Colin Gabelmann, the current Chairman of the PRA
L when they were both in Government.
m N o t s u r p r i s i n g l y, h e l a u d s t h e w o r k t h e H R A B C h a s d o n e .

However, it is difficult to understand why it is proposed that

m the HRABC " must become a legally incorporated body "
if it is to advance racing's interests further. Sounds
suspiciously like a plan to 'create jobs for the old boys
M network - NDP style!'
The PRA support for the HRABC is hard to comprehend in light of
the view expressed by PRA GM Bob Stirskey to government on
pi September 20, 1888 which was "The interest of the thoroughbred
and standardbred sectors of the industry should not be blended
within one organization each should be responsible
for capital funds generated from within their respective
sectors."

4. This report has not investigated the fairness of federal taxes

as they relate to owning a racehorse and as such, no
conclusionsare offered on this issue.

Again an opportunity was presented to a major accounting firm

to provide an opinion/solution to an issue of some importance
to a sector of the industry and again, the shortcomings of the
p) report are revealed.
5. Surprisingly "The report has also not fully investigated the
role of the regulator in the horse racing industry. Currently,
the horse racing sector is regulated by the British Columbia
Racing Commission (BCRC) Further, since the horse racing
sector is part of the entire gaming industry there should be a
role for the Province's main gaming regulator, the Gaming Audit
and Investigation Office (GAIO)."

pi
Did the consultants even examine the legislative/statutory
mandate of the BCRC? Involving another level of bureaucracy
that duplicates what the BCRC is mandated to do is unnecessary.
Some 10 of the total 47 people interviewed were either
r commissioners or staff of the BCRC (almost the entire group of
people involved in BCRC business)... .and the role of the
regulator was not fully investigated?
6. "BC is the only province which currently imposes a tax on its
horse racing sector for general revenue purposes."
This statement is somewhat misleading as other jurisdictions in
Canada/USA where horse racing takes place have some form of
tax on the handle, (see Facts & Figures IX). Indeed, if that
is the rationale for redistributing the tax back to the
-13-
pi
 i n d u s t r y, t h e n w h y i s n o t t h e s a m e r a t i o n a l e u s e d for allowing
slot machines at the tracks as do the other major provinces of
A l b e r t a , M a n i t o b a a n d O n t a r i o . C o n s i s t e n t fi n d i n g s of fact and
conclusions therefrom are not a hallmark of this report.

"The sector needs the flexibility to allocate revenue to

strategic areas in a timely manner. It is unlikely that this
recommendation could be implemented and administered
effectively if the sector does not create a unified voice."
What is the basis or foundation of this opinion? As to slot
machines, the consultants wanted evidence beyond a shadow of a
doubt. Why is that same impossible standard not applied to this
recommendation? Please also see earlier comments regarding
public funds and the accountability thereof - re HRABC.
No. 's 7,8 and 9 of the report's Summary of Findings covering
simulcasting, marketing and promotion and realizing of market
potential have been covered in earlier comments.
10. "A number of jurisdictions have responded to the decline in
their horse racing sector by introducing slot machines to both
increase attendance at racetracks and generate revenue to
supplement purses. The success of this initiative is difficult
to fully evaluate."

Really? The consultants who are based in Toronto should have

another word with Mr. David Willmot at the Ontario Jockey Club.
Or go down and meet with those US track operators who have
s l o t s a c t i v i t y. P e r h a p s t a k e M s . S m a l l w o o d w i t h y o u a n d s h e
will experience some real industry horsesense.

The last of the 10 point summary of report findings states,

"Further, slot machines should be viewed as an ancillary gaming
opportunity as opposed to a primary use of a racetrack. For
example, it would be inappropriate (not proper), for a facility
to operate slot machines for 365 days per year while the
facility conducts live racing for only a fraction of the year."
What is the basis for this unsubstantiated opinion? None is
offered - only a bald statement is made.
Is PricewaterhouseCoopers utilizing the "deontological"
a p p r o a ch , w h e r e m i n i m a l a n a l yti ca l th o u g h t i s r e q u i r e d ? Or a r e
the report consultants maliciously target ting Desert Park, THE
ONLY BC RACETRACK THAT HAS LOCAL GOVERNMENT 'APPROVAL IN
PRINCIPLE' FOR SLOT INSTALLATIONS? If Desert Park, in addition
to a live racing meet, offers simulcast racing all year round
is it still inappropriate to have slot machines under such
circumstances? Small tracks in places like New Mexico are

r -14-
pi

pi

allowed to operate slot machines every day so long as the track

offers some racing product.
The report concludes, "Finally, the government must ensure that
slot machines at racetracks do not materially impact slot
machines at other gaming facilities in the local market."
Heaven forbid there should be competition. It is certainly
alright for casinos to compete with racetracks, but a no-go
for racetracks to be accorded a level playing field to compete
with casinos.
How can PricewaterhouseCoopers make this statement with a
straight face in light of its remarks under Summary of
Findings? Stating, "Any government policy which places the
horse racing industry on the same footing as other gaming
pi sectors would enhance the ability of horse racing to compete
for its fair share of the gaming market in British Columbia."
The two statements do not reconcile; this from chartered
accountants who are supposed to be experts at reconciliation.
Further, it does not reconcile to the fact that the Province
will permit casinos to compete against each other in the
Okanagan, New Westminster, etc.
The Chair of the PRA, Hastings Park has referred to the Horse
Racing Review as a Watershed for the industry.
The proponents of the Desert Park Racetrack proposal in Osoyoos
call the report a Watermark document. One has to look very
hard to find a reason to justify the costly report.
Despite her stated aversion to gaming, Minister Smallwood still
has within her powers the ability to save the ailing industry.
Step in and support in every possible way ($ handouts and slots
pS|
not needed), the private sector proposal to develop a world
class racing facility in Richmond and;
Save the BC Interior racing infrastructure by supporting the
Town Council of Osoyoos initiative to install slots at its
local racetrack.
p) Together these proposals make good horsesense and present a
long term vision of success, not just survival for the BC
thoroughbred racing industry.

-15-

r
pi

COUNTER-POINT

pi
1999 BC HORSE RACING REVIEW

PART II
PI Part I covers the whole of the Executive Summary of the BC Horse
Racing Review which is, of course, a synopsis of the entire review.
Part II herein sets out further comments regarding the body of the
Review and other matters pertaining to this Counter-Point.
pi

INDUSTRY OVERVIEW

The report states that, "Over the past number of years, the pari-
mutuel gaming sector has experienced increased competition due to
pi the expansion of alternative gaming activities, mainly casinos. In
response to this situation many jurisdictions, including BC, have
allowed the horse racing sector to expand through the use of off-
P)
track betting facilities and simulcast betting."
Some jurisdictions, such as Delaware, West Virginia, Iowa, Ontario,
Manitoba, Louisiana and New Mexico have also allowed video lottery
m t e r m i n a l s ( V LT ' s ) o r s l o t m a c h i n e s t o b e i n t r o d u c e d a t r a c e t r a c k s
to help off-set declining pari-mutuel wagering activity.

permit the installation of slot machines at selected British

r l n 1 9 9 7 , Columbia
t h e g o v e racetracks.
rnment of British Columbia announced that it would
m As set out in the report, the consultants' statement regarding the
government announcement on slots is incorrect. The BC policy
announced by Dan Miller on March 13, 1997 did not state that the

r p o l i c y racetracks
w a s p r e in
f e rBC
e n tunconditionally
i a l . I t s i m pand
l y awithout
p p l i e dany
t o caveats.
any and all
m F u r t h e r, p e r m i t t i n g o f f t r a c k b e t t i n g f a c i l i t i e s a n d s i m u l c a s t i n g
was more of a response to what was evolving elsewhere, e.g. the USA
and to lotteries, not casinos.
m The main response to casinos was to allow racetracks to install
slot machines, i.e. put them on a level playing field with their
main competition. The Review does not name all of the jurisdictions
m which allow for slots at racetracks and the fact that there is a

-16-
pi

trend in this direction; e.g. Florida and Kentucky.

If BC already has a slot machine policy in place, why should they
pi reverse the policy and ignore industry trends? That is folly. And
why does this Review make misleading statements in that regard?
Is it because their instructions from the Gaming Policy Secretariat
pi were to do so - to craft a flawed report to reach a flawed
conclusion?
"As compared to the lottery and casino sectors the pari-mutuel and
bingo sectors have remained relatively static since 1992/3 (see
Figure 16 facing)," states the report.
Again this statement is not forthcoming. Where is Figure 16 as
alluded to in the report? Is it not included because it clearly
shows that BC racing is in decline? (see Facts & Figures III + V) .
However, Ms. Smallwood did get it right when she stated that "the
industry is in very serious trouble. " (BCTV News Hour Oct. 4,
1999). Although that is somewhat of an understatement.
!P|
S TA K E H O L - D E R V I E W S s S U M M A R Y O E M A O O R I S S U E S

m Key stakeholder views indicated that Hastings Park needed to

renovate the existing facility or move to a new location as the
circumference of the racetrack (5/8 mile) is not competitive.
The PRA does not have the financial resources to undertake any
major site improvements. By the end of 1999 the PRA will have
received almost $10m in government grants. This, in addition to a
m $6.4m government loan they received in 1994/5. Despite receipt of
these substantial monies, the PRA's latest balance sheet shows that
at December 31, 1998 they were not in compliance with the terms of
m the $6.4m loan, (see Facts & Figures XXIV).
Whatever happened to the major improvements to Hastings Park that
were promised
m The current the when
PRA Chair industryhein was
1992/3? Promises
Attorney made by guess who?
General.

The review makes no reference to the appalling state of backstretch

m facilities. Here again the report is weak on substantive issues, it
does not recommend whether Hastings Park should be substantially
renovated or whether a new facility should be constructed.
pi
The failure by PricewaterhouseCoopers to speak to the merits of the
Richmond racetrack in their report is also significant given the
stakeholder views.
pi
The report presents the view that "Those mid-sized regional
racetracks that cannot expand into entertainment centres (generate
w a d d i t i o n a l r e v e n u e ) w i l l p r o b a b l y c l o s e d o w n o r d o w n s i z e t o s e r v e
a smaller market."
n -17-
p!)

The government's own report signals the death knell of Hastings

Park and indeed, BC racing. What then does the PRA laud as a
logical saviour of thoroughbred racing in the Lower Mainland?
Formalizing the HRABC to push the Government into action for
handouts to make racing the welfare sport of BC!
The current anchormen at the PRA are yesterday men, unable to
motivate the industry and incapable of presenting a long term
vision of the future that is better than its own history of
(Si
failure.
Securing industry financial support from the private sector is
imperative.
The report recognises "Horses will be attracted to larger tracks
where purses are higher and where there are a greater number of
si races.
Unless something positive happens in the Lower Mainland the exodus
of The
m continue. horses to Emerald ofDowns,
performance which
Emerald is in athewell
Downs, regional market,
managed will
facility
and a serious competitor of Hastings Park, was also ignored by the
report consultants. For what reason? Perhaps because like the
*! Richmond Racetrack proposal, free enterprise is present!

p, O P E R AT I O N A L . ENVIRONMENT

The review points out that the dynamics of the horse racing sector
are unique in gaming, encompassing live sports as well as legal
* ! g a m b l i n g a n d t h a t t h e a c t i v i t y, t h e f a c i l i t y a n d t h e c u s t o m e r
produces the product - breeding and the auction of horses form part
o f t h e a c t i v i t y.
j5)
I n r e s p e c t o f b r e e d i n g a c t i v i t y, t h e r e v i e w fi n d i n g s f a i l t o
highlight the precipitous state of the BC industry. It fails to
m point out the fact that with regard to breeding, although less than
half the number of thoroughbreds sold are sold at public auction,
the dollar value of the yearling auction sales market is generally
accepted as being a true reflection of the current health of the
r thorough illustrated
b r e d b r e (twice)
e d i n g i in
n d uthe report,
s t r y. ( J u s tthis
o n eshowing
c h a r t ithe
l l u s number
t r a t i o n iof
s
registered foals, standardbred and thoroughbred, in BC for the
m p e r i o d 1 9 8 8 - 1 9 9 7 ) .
The 1999 BC Summer Yearling Sales average sales price dropped 18.9%
si from the 1998 average, (see Facts & Figures XII). Prompting a
leading breeder to comment that "the entire BC horse breeding
industry may lose its footing... .it will take a long time to
rebuild the industry."

-18-
 Where in the report is there data on numbers of new owner
registrations? These statistics are conspicuously absent. Why?
Obviously, either the Review is deficient or the statistics paint
a bleak picture and point to the failure of PRA's owner recruitment
drive - of which there is little talk and still less action.

PI
REVENUE DISTRIBUTION

The report gives a general overview of the distribution of monies

received by the industry via the Horse Race Improvement Fund (est.
1980) and the Research and Facilities Fund (est.1987).
What the report does not illustrate is the impact increased
simulcasting has had on payments made to the PRA via grants from
the Research and Facilities Fund (RFF) . (see Facts & Figures XXV).
There were 96 reported simulcasts at Hastings Park during the whole
of the 1995 Hastings Park season. The number of simulcasts seen
during 1999 will exceed 1700. During this period, annual RFF grants
to the PRA have mushroomed from $1.2m in 1995 to $2.4m in 1998, a
100% increase. By the end of the 1999 season, the PRA will have
received almost $10m from the RFF fund during the past 5 years. In
MSI
1998, RFF grant monies is shown to be the second largest source of
PRA revenue. An equivalent of 10.77% of the PRA gross mutuel
revenue ($22.6m). (The PRA has until now used the Freedom of
pl
Information and Protection of Privacy Act as a reason to reject
requests by one of its partners, the HBPA, for details as to how
RFF grant monies have been spent) . (see Facts & Figures XXVI) . So
much for communication!
It is interesting to note that during a similar period, 1995-1998,
the PRA annual contribution to purse money has slipped from
$9,456,932 in 1995 to $9,411,588 in 1998 (DOWN 4.8%). With 1998
purse money paid by the PRA being just 41.71% of revenue from
mutuel operations, (see Facts & Figures XXIV & Schedule 6).
Did PricewaterhouseCoopers consider the formula used for
disbursement of RFF grant monies to the thoroughbred industry, all
of which is paid to the PRA - and apparently not supported by
detailed expenditure schedules? If so, do they feel that changes to
the Horse Racing Tax Act should be made to give greater incentives
to promoting the 'live' racing product? The massive decline in live
handle and profile of on track wagering makes this an issue of some
importance and appears to have been passed over by the report
consultants.
p|
THE EACIL.ITY

The report correctly states that the farm, the backstretch and the
-19-
w

L o f t h e racing
d o c u mfacility
e n t w hare i c h the
"ma raison
r k s t hd'etre
e w a for
t e r sthe
h e dindustry.
f o r o u rOni n dpage
u s t r y49
,"
m t h e r e aaccording
s o n t h a t top ethe
o p l ePRAb r eChair,
e d h o rreaders
s e s , o ware
n / r areminded
c e h o r s ethat
s a n"purses
d o p e r aarete
racetracks."
m T h i s i s a c r i t i c a l e c o n o m i c s t a t e m e n t i n t h e R e v i e w. T h u s , t h e
critical question becomes - how can purses be maintained and
increased over time. Slot machine revenue and increased revenues
from a multi-purpose venue seem to be the obvious answer. Based
P1 upon current trends, purses will decline in 2000. This must be
L reversed.

r 1998 preliminary figures issued by the Jockey Club show that BC at

$13,202,283, ranked 15th of the 41 states/provinces in North
America with respect to gross purses paid, (see Facts & Figures
pi VIII). BC ranked 20th in purses paid per race and a lowly 31st out
of 41 in respect of starters per race, (cf: Facts & Figures V) .

ECONOMIC ENVIRONMENT

A number of charts and tables set out in the report attempt to

* i l l u s t r a t e t h e c u r r e n t s t a t e o f p a r i - m u t u e l w a g e r i n g i n t h e H o r s e
Racing Sector covering the period up to 1998.

m The effort of the consultants to combine activity of thoroughbred

and standardbred on many of the numerous charts contained in the
report has somewhat muddied the water in a well that has a leak.
From the thoroughbred perspective the report does not convey the
m crisis of a live handle on track which by the close of the current
season will have dropped by almost $90 million since 1994. (1999
est. live on track handle $39m) . (see Facts & Figures III - V) . No
pi attempt has been made to present the PRA projections for the year
2000. Is that because there was no PRA plan to refer to?

p? Again, whatever happened to 'the short and long term comprehensive

business plans' prepared for the PRA by 'one of Canada's premier
business minds' which was announced by ex PRA Chair Don Winton in
April, 1998? Did the consultant get a look at them? If not, why
not?
The report states, "a large part of wagering on other jurisdictions
racing events can be attributed to Hong Kong racing....and that
$61.6m of all simulcast wagering in 1998 is attributed to Hong
Kong." The report omitted to mention that since 1994 the on track
handle per Hong Kong simulcast has seen a dramatic fall off (e.g.
Hong Kong on track betting in October, 1999 will be $1m down
compared to October, 1994 figures). No attempt is made to explain
this fact. The rights to the Hong Kong hub betting appear to be of
some importance as far as revenues and viability of operations are
-20-
iK|

** concerned. Did the consultants ascertain the term length of the

Hong Kong simulcasting rights held by Hastings Park?
* Further, what about the negative impact of new casinos and slot
machines in Greater Vancouver on the horse racing sector? No
attempt has been made to analyze this impact by Pricewaterhouse-
p Coopers - why not?
Other racetracks in the US have closed as a result of this kind of
impact so there is some evidence available for such an analysis.
The Review is long on immaterial infill (e.g. "Definition of a
Jockey: a person that rides on the back of a horse and is in
m control of the reins "), but exceedingly short on in depth
analysis, projections and meaningful recommendations and solutions.
The report illustrates the decline in the number of thoroughbred
pi
and standardbred foals a decrease from 850 in 1988 to 636 in
1997 (a decline of 25%).
pi This decline in thoroughbred foal count has some bearing on numbers
of runners per race. In 1998, BC averaged 7.37 runners per race and
was ranked a lowly 31 out of 41 states/provinces, (see Facts &
Figures V + X).
However, as referred to earlier, the yearling sales auction results
are recognised as the bellwether for the industry.
"Reasons for this decline can be attributed to decrease in the
number of races (including type of race) and economic conditions
(impact of the Canadian dollar (?) , cost of maintaining a horse,
etc)."

pi
This may be so, but what solutions or options does the Review
really offer? Additional revenues from slots can act as a catalyst
to reverse this situation, but the B.C industry needs to seek a
commitment from the private sector to build a new facility to get
pi breeders, owners and fans back on track. Could that be Richmond
Racetrack? Or do the PRA have a specific site in mind? If so, let
the industry hear about it and let the best proposal be decided by
m t h e i n d u s t r y, n o t i n d i v i d u a l s .
"In conclusion, the horse racing gaming sector in British Columbia
m i s c o m p l e x , " s a y P r i c e w a t e r h o u s e C o o p e r s . ( i n o u r v i e w, n o m o r e
L o f m a j ocomplex
r c h a l l ethan
n g e svirtually
. T h e cany h a l lother
e n g e sindustry)
are sim and i l a ris t ofacing
t h o sae number
facing
most other jurisdictions in North America. While a number of
m jurisdictions have responded to those challenges by introducing new
f o r m s o f g a m i n g ( i n c l u d i n g s l o t s a n d V LT ' s ) a t r a c e t r a c k s a n d
reducing taxes the success of these initiatives has not yet been
p fully proven."
L -21-
L

SB)

This stateine.nt is totally inaccurate. Precisely what does it take

to prove the case. According to reasoning that is employed by the
consultants, the earth is still flat; that is the globe has not yet
been fully proven. That is why we use the term "flat racing!".
Assuming that PricewaterhouseCoopers is correct in its assertions
then what initiatives does it suggest to meet the challenges facing
the horse racing industry?
The Review continues, "In BC, the introduction of simulcasting
JSs)
helped the horse racing sector to maintain the level of total
h a n d l e y e t a c t e d o n l y a s a t e m p o r a r y r e l i e f t o t h e s e c t o r. "

Earlier in the report it stated that in 1998, simulcasting

accounted for 49.2% of total wagering on BC racing events. That
sounds a little more than temporary relief, or is it that the
consultants believe BC simulcasting handle has already peaked?
jS)
The report states "The future health of the sector in BC is
contingent upon:
_* local investment in horses; and
* attendance at local venues to bet on horses."

Therefore, the acute question becomes; What strategies and

initiatives will it take to achieve this healthy future? One
L obvious answer is the installation of slot machines at racetracks
if requested by the racetracks. The machines generate additional
pi revenues and increase customer traffic flow because the product mix
provides a more exciting entertainment venue. The economic spin
offs (revenues) will justify capital investment in facilities and
services, higher purses for horsemen, more demand for horses and
w increased breeder interest.
Do you have a strategy, Ms. Smallwood? Could you name the "other
m things the industry can do?" Or do you intend for the industry to
sink in a sea of red ink and unpaid loans made with BC taxpayer
dollars?
<p?

HORSE RACING SECTOR MARKET POTENTIAL. AND DEMOGRAPHIC

w A c c o r d i n g t o t h e r e p o r t c o n s u l t a n t s , t h e f a c t o r s i d e n t i fi e d b y
successful gaming operations as crucial to revenue generation are:
* proximity to gaming customers and an attraction people
p(|
like to visit; i.e. a quality destination with many
different attractions and amenities - such as the proposed
Richmond Downs Racetrack, offering a first class headquarters
for BC racing
* quality of gaming developer/operator
* regulatory environment, amount and location of competition.

-22-
pi
pi

PI
DEMOGRAPHICS

A survey carried out by the review consultants indicated^that 81%

P of the people were more likely to wager on horse racing if:
* Other entertainment was offered; (e.g. Richmond Racetrack
m and Desert Park proposals)
* Parking and Admission Fees were reduced
m * Racetracks "had better facilities and amenities
these can be achieved through ancillary slots revenues
m * Racetracks had other forms of gaming
1 h a v e p r o v i d e dThis is kvery
the e y significant.
a n s w e r tIn
o the
t h e survey,
r e v i t athe
l i s people
a t i o n of
o f BC
horse racetracks and the industry. Why is it being
SIDETRACKED?
The ** for slots is made by PricewaterhouseCoopers and the pu*>lic
p f*i&). hut Joan Smallwood summarily dismisses the case without
hearing any evidence to the contrary, thus manifestly revealing her
negative bias.

L s l o t m a c" W
hih
n iel es m
a ta nr ya c jeutrrias cd ki cst i oanss ah awv ae y i nt vo e si nt icgraet ae sd e t hr e i nnsut ae l l af ot iro nt h oi sf
eve
m d e t e r m si neec.t oIrf, st hu ec c se us cs c ei ss sm oe fa st u
h reesde bi nyi t ii a
n tci rveeass ei sd dr ief vfi ec u
n lut e t ot o f ut h
l le
y
sector then these initiatives can be considered to have succeeded,
expound the report consultants.
r What measuring stick do they suggest be used The horse racing
industry is a business; a means of livelihood for 7000 British
Columbians. Snrelv increased revenue, an economic measurement, is
T
L S e c r e t a rm
t h e \ p r i i aat r yt e ldl e B
t ei lrl mG
i naat en st ? i tO irs, "wdoi fufil cd u lt th et o Nf D
u lPl y Gdaemt ei n
rmg i nPeo l ti hc ey
success of Microsoft, even though its revenues are increasing
f e x p o n e n t i a l l y. " E v e n B i l l G a t e s , g e n i u s a s h e i s , w o u l d h a v e s o m e
L d i f fi c u l t y f o l l o w i n g t h a t e x p l a n a t i o n .

I ECONOMIC ISSUES SURROUNDING THE L.OWER MAINLAND LAND L.EASE

WI It is well documented that the lease at Hastings Park prevents any

other form of gaming on the site than pari-mutuel wagering.
Additionally, the site is the subject of a City parkland
Development plan that severely limits the options for development
of the racetrack site.
The most recent accounts of the PRA, an unusually structured non
profit association, reveal that it was not in compliance with the
-23-
i"f?

j*|
terms of a $6.4m government loan as at December 31, 1998 and were
_ cash hungry in spite of receiving substantial grant monies in
excess of $2.4m during the year, (see Facts & Figures XXIV).
ptl

In 1999, both attendance and live handle will take another hit.
Betting on the live product at the track will hardly reach $39m as
m compared to $129m in 1994.
The report emphasises that "track facilities are an important part
m s u c h tof
h a tthe
t h ehorse
s e c t oracing
r ' c a n n osector:
t p r o p ethe current
rly p l a n a n dlease
c a r r yarrangements....are
out a long-term
s t r a t e g y f o r t h e s e c t o r. "
**! A reclusive and secretive management is housed in a 36 year old,
dated facility and are committed to a vision of success built
around government handouts which will never secure the future for
m BC horsemen.
A PRA Director stated as recently as February 11th, 1999 that,
m w e a r "From
e n o witsd e
inception
s p e r a t einl y 1994,
u n d ethe PRA
r ca p i t ahas
l i z ebeen
d . " under capitalized

Where then is the PRA Business Plan? Where is its budget? Just how
m has the $10 million government grant monies been spent? Why did the
PRA refuse to disclose this information? (see Facts & Figures
XXVI). The PRA should respond immediately to its industry partners
p| who have been summarily ignored.
PricewaterhouseCooper state, "the cost of a new racetrack would be
between $80m and $150m given the current financial position of
r H a s t i n g s P a r k , t h e f a c i l i t y w o u l d h a v e d i f fi c u l t y fi n a n c i n g t h i s
L amount of a loan given its current operation."
m END OF STORY!

YOU HAVE BEEN SIDETRACKED MS. SMALLWOOD, GET SOME HORSESENSE

BECAUSE HASTINGS
m RECOMMENDATION PARK MANAGEMENT
TO EXPAND HAS NO-CENTS
RACING BUREAUCRACY VIAAND
THETHE REPORT
HRABC IS
NONSENSE.

P LOOKING AHEAD TO THE NEXT DECADE, THE RACING INDUSTRY WILL REQUIRE
L INCREASING MANAGEMENT PROFESSIONALISM AND SOPHISTICATION IN ORDER
TO RESPOND EFFECTIVELY TO CHANGES IN CONSUMER DEMANDS. TO DATE, THE
m PRA HAS NOT DEMONSTRATED ITS ABILITY TO MEET THAT CHALLENGE.

THE PROPOSALS TO PUT BC RACING BACK ON TRACK ARE BEFORE YOU, MS.
SMALLWOOD. PUT POLITICSOFAND PERSONALITIES ASIDE.AND
WORK WITH PARK
THE
m PRIVATE SECTOR DEVELOPMENTS RICHMOND RACETRACK DESERT
RACETRACK TO SAVE BC RACING.
m AND YOU CAN BE ON A WINNER WITHOUT HAVING A BET!

_ -24-
ipl
FACTS&FG
I URES

NOTE:
Pi

The following charts and information relate to observations and statements set
out in Counter-Point I and II.

With regard to racing statistics, and as Hastings Park and BC

racing will encounter heavy competition in all segments of the
w.i industry from USA track operators in the next decade, a number of
the Tables are used to show how recent performances and profiles o
thoroughbred only race meets in USA state racing jurisdictions
Wi
compare to those in BC.
l In 1997, total handle on all forms of horse racing in the USA and
Canada topped $16.85 billion. The USA generated $ 5.2 billion,
m representing a 2.1% increase over 1996 fi b r e s , w h i l e t h e t o t a l
f handle in Canada of $1.65 billion represented a drop of 9-s on 1996
fi g u r e s .
f Wa s h i n g t o n j o i n e d t h e r a n k s o f i n t e r s t a t e f u l l - c a r d s i m u l c a s t i n g i n
L 1997 (California, the only state not accepting wagering on multiple
interstate racing programmes in 1997, joined the ranks in 1999.)
F Simulcast wagering growth continues to slow after the rapid
expansion into new jurisdictions experienced in the mid-nineties.
m In 1997, the overall simulcast wagering on horse racing increased
F bva s7%
L w l a t eas g e
compared
t t i n g i n t o tot e al e t9%
h e a tincrease
r e ( 1 9 9 4 )in a1996.
n d s i mHastings
u l c a s t i n g Park,
, h a s which
been
in a catch up situation with many other track operators.
f C o n v e r s e l y, l i v e h a n d l e o n h o r s e r a c i n g i n t h e ^ C " M * * *
approximately 12% in 1997, following on from a 14* drop f-J1 J996.
IP During a similar period, Hastings Park live handle suffered a
I massive 32.3% drop in 1997, following on from a 9.4-s drop in 1996.
(Bv the end of the 1999 season, live racing at Hastings Park will
m have experienced a critical three year decline (1996-1999) in live
fL hwai lnl d bl ee oafn oevset ri m7a1t e%d. $T3h9e ml ii kl lei ol yn 1a 9s 9 c9 o m
l i vp e
a r ehda nt do l et h ^ee l$u1d2i 9n gmTi lA
liB
o n,
achieved during the first year of PRA track operation m 1994.
pi

P?

r
1 II "3 rrnm^ i n 1
1997
HORSE RACING IN CANADA
Live Racing Days
Thoroughbred Harness Total

Alberta '..;,., ,./-_;,*' ,..,*.:* .;'.;;,:* [173;.,,,,

154 170 324
British Columbia
o79< -
'ManitobairV./J^i!. J* <-'^ -
80 80
New Brunswick ,' Til'
iNe^undlarjd.^^^^j'X: ,-j J ^ ,i! >, n,.;.. ut,/ fir i5i
181 181
Nova Scotia
278:
;phtarjo; f'j'..:'* .!-\ ^V:sr.^4 V. 1 108
Prince Edward Island 108
fQuebec 161
Saskatchewan 50 51

Totals 2,532 751 3,283

Horse Racing Totals

Effective Provincial
Takeout Rate Provincial Tax Federal Tax Lew*
Total Handle Total Takeout

'$33,311,923-> * 23.23% ^ ^ $ 7 , 0 2 9 , 1 8 5 , : ; ^ ;$i38i\526!'iC

:;^i!;22.55%> I, ,$882;247!
Alberta.-. ' .-."-- 4 t ',$147,755,765,
219,749,996 51,040,889 14,813,877 1,757,605 384,493
British Columbia
Manitoba,: V' -> "'' ,/,; ,v29.6l3;8bl,. i/L7;322i830,!;l I'X.:. 24:73%, ;., ; 2,403,040 $. *'..J;.I236,54T|K;'
28^34% 686,917 54,557 26,679
New Brunswick 6,829,857 1,935,747
7 ^ ? . 5 6 , 8 6 3 ^ ^ 7 ;472|
Newfoundland ?~ .,*, - ^ i,;Y^.;.859r182; ^ir235;555;;: :i/J:;.ri27;42%; .n.,u
27.54% 994,764 74,846 15,009
Nova Scotia 9,367,433 2,580,077
36t8>9t:451.:
.Ontario- ,.^;"<C '..""* Ji,042;874.652; ;246,7d4f797j, rj-.C23;66%: :,'<;."i5I700,488.,'.v ^ F 8 , 3 3 8 , 2 i l 4 ^ ^
Prince Edward Island 5,933,381 '1,686,063 28.42% 785,161 47,397
.Quebec :;'/; \*v.r/!i .>> ,, ,,.,170,638:010 } 44,807,113-. ;;,^2;4i3,545;fi ?,'ll392;313.,;ir^' ,,246,221;i
25.10% 1,337,195 124.924 91,356
Saskatchewan 15,663,103 3,931,587
23.86% 46,240,949 13,184,786 38,677,841 *l
Totals 1,649,284,580 393,556,581
>
O
t-3
en
* Provincial Levy figures indicate the amounts that are returned to the racing industry in the form of improvement grants and purse
K>
supplements.
H
The Canadian Pari-Mutuel Agency implemented a new computer system in 1997, which makes it impossible to compare handle
with prior years. Handle is now reported by the province in which the wagering took place; in prior years isimulcast handle
was assigned to provinces based on the sending track's location. At the time this report was prepared, the CPMA was still en
refining the system's reporting capabilities, so no further breakdown of the data was available.
H
1 5 1 II ^u 1 1 1 1 ^j 1

FACTS & FIGURES II

PER CAPITA GAMING SPEND BY PROVINCE

1 996
PROVINCE FULL SERV VLTS CHARITY OTHER LOTTERY PA R I - TOTAL GAMING SPEND
CASINO CASINO CHARITY MUTUEL PER CAPITA

BC $0.0 $0.0 $30.0 $49.7 $139.4 $12.4 $231.5

ALBERTA 0.0 250.9 25.4 65.1 89.7 16.3 447.4

SASK 40.5 215.8 N/A 11 4 . 7 74.2 3.4 448.6

MANITOBA 18.1 307.2 N/A 37.9 73.9 5.2 442.4

ONTARIO 66.6 0.0 N/A 74.6 123.4 33.3 297.9

QUEBEC 71.0 78.5 N/A 15.8 138.3 9.2 312.8

N SCOTIA 60.1 137.5 N/A 50.4 11 3 . 0 4.1 365.1

NEW BRUNS 0.0 183.7 N/A 39.0 85.6 2.0 310.3

PEI 0.0 158.4 N/A 34.6 95.9 14.1 303.0

NEWF 0.0 135.1 N/A 47.3 160.8 0.0 343.2

>
O
C
O

*!
H

w
C
O
FACTS & FIGURES III
 UtnagflaaflMMKIUaMaVatiMaaBCaVa FACTS & FIGURES IV

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o
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o
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8 o
o o
o 8
00 CO
5
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(asn) soey / $$$ esjnd
 FACTS & FIGURES V

00
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 FACTS & FIGURES VI

PI

USA RANKINGS
THOROUGHBRED ONLY RACE MEETS
1997
$PER CAPITA BET LIVE RACES

AV.ATT/DAY
1. NEW YORK $167.12 5,969
2. FLORIDA $160.40 4,081
3. OHIO $121 .67 1 ,960

4. KENTUCKY $116.09 5,905

5. ARKANSAS $ 95.81 11,754

6. ILLINOIS $ 89.70 3,795

7. NEW JERSEY $ 88.90 6,226

8. WASHINGTON $ 85.76 3,189

si 71 .59
9. NEW HAMPSHIRE $ 2,607

10.INDIANA $ 71 .24 1,296

p
11.TEXAS $ 68.72 4,950
12.CALIFORNIA $ 66.76 18,069
13.OKLAHOMA $ 62.65 2,970
14.MICHIGAN $ 61 .61 4,006

15.LOUISIANA $ 52.31 4,465

s
16.VIRGINIA $ 50.48 3,620
17.PENNSYLVANIA $ 48.30 5,382
18.NEBRASKA $ 46.27 1,782
pi 19.MASSACHUSETTS $ 42.22 5,598
2O.MARYLAND $ 40.85 9,094
OVERALL AVERAGE $ 92.54 5,402
* D e l a w a r e / W. Vi r g i n i a N / A
PI
1 9 9 9 H A S T I N G S PA R K P E R . C A P ( e s t ) $ 7 1 . 0 0 U S 3 , 1 0 0

IP
f
 FACTS & FIGURES VII
USA RANKINGS
P THOROUGHBRED ONLY RACE MEETS
1997
LIVE RACES $HANDLE

STATE No.DAYS ATTENDANCE AV/DAY $HANDLE

1. CALIFORNIA 473 8 ,546,811 18,069 $570, 582, 963

2. NEW YORK 435 2 .596,616 5,969 $433, 949, 732
3. FLORIDA 383 1 r563,089 4,081 $250, 714, 652
4. KENTUCKY 287 1 ,694,853 5,905 $196 ,761 ,930
5 ILLINOIS 400 1 .518,073 3,795 $136,,155 ,793

pi
6. N.JERSEY 231 1 ,438,204 6,226 $127, 852 913
7. PENNSYLVANIA 423 2 ,276,774 5,382 $109,,961 ,239
8. OHIO 429 840,740 1,960 $102 ,291 ,841
9. MARYLAND 228 2 ,073,407 9,094 $ 84 697 ,147
pi
1 O.TEXAS 234 1 ,158,190 4,950 $ 79 ,593 ,935

11.ARKANSAS 60 704,050 11,734 $ 67 r454 ,297

W
\
12.WASHINGTON 224 714,363 3,189 $ 61 ,264 ,578

13.LOUISIANA 246 1,098,395 4,465 $ 57 ,454 ,246

14.MICHIGAN 161 644,983 4,006 $ 39 r735 ,043

15. MASSACHUSETTS 168 940,494 5,598 $ 39 ,704 ,839

16.WEST VIRGINIA 385 N/A N/A $ 37 ,312 ,711

17.DELAWARE 149 N/A N/A $ 30 ,379 ,849

18.OKLAHOMA 107 317,830 2,970 $ 19 ,913 ,222
19.NEW HAMPSHIRE 100 260,702 2,607 $ 18 ,662 ,839
fp 2O.NEBRASKA 117 203,857 1,742 $ 9 ,433 ,185
21.VIRGINIA 30 108,591 3,620 $ 5 r481 ,303
22.INDIANA 57 73,900 1,296 $ 5 r264 ,793
TOTAL 5327 28,773,922 5,402 $2,284 r623 ,070
 FACTS & FIGURES VIII

Jockey Club Fact Book Page 1 of2

Preliminary Statistical Data

1998 Breakdown of Races by State or Province

AVG
STARTS
NO. OF GROSS AVG. PER
STATE RACES PURSES STARTERS STARTS FIELD RUNNER

Arkansas 526 $11,984,650 1,868 4,957 9.42 2.65

Arizona 2,060 $11,889,079 3,198 16,818 8.16 5.26
California 5,190 $153,929,101 8,013 40,299 7.76 5.03
Colorado 301 $1,774,467 639 2,500 8.31 3.91
Delaware 1,237 $27,466,120 3,125 8 798 7.11 2.82
Florida 3,813 $69,977,620 6,989 31,895 8.36 4.56

Georgia 10 $340,000 64 70 7.00 1.09

Iowa 749 $10,945,414 1,544 6,052 8.08 3.92
Idaho 337 $958,373 662 2,539 7.53 3.84
Illinois 3,004 $62,044,538 4,462 24,853 8.27 5.57
Indiana 605 $11,355,005 2,152 5,434 8.98 2.53
Kansas 238 $1,622,129 793 1,930 8.11 2.43
Kentucky 2,666 $93,532,517 6,525 23,409 8.78 3.59
Louisiana 2,973 $40,832,760 5,781 26,874 9.04 4.65
Maine 1,500 $12,760,733 2,071 11,947 7.96 5.77

Maryland 2,272 $50,524,031 4,031 18,008 7.93 4.47

Michigan 1,544 $14,851,807 1,614 11,423 7.40 7.08
Minnesota 442 $4,326,247 941 3,497 7.91 3.72
Montana 237 $404,928 409 1,636 6.90 4.00
North Carolina 19 $277,500 95 121 6.37 1.27
Nebraska 866 $4,195,455 1,178 6,459 7.46 5.48
New Hampshire 735 $6,223,700 1,354 5,784 7.87 4.27
New Jersey 2,002 $40,560,090 4,109 15,492 7.74 3.77
New Mexico 888 $4,566,379 1,455 8,061 9.08 5.54
New York 4,075 $111,417,066 6,167 32,115 7.88 5.21
Ohio 3,200 $30,218,046 5,290 27,365 8.55 5.17

- Oklahoma 1,577 $13,046,794 3,108 14,041 8.90 4.52

Oregon 801 $2,356,008 1 , 4 11 6,651 8.30 4.71
t d ://www. i ockevclub. com/factbook/breakdo wn. html 10/15/1999
 Jockey Club Fact Book Page 2 of 2

1S|
Pennsylvania 4,157 $43,440,043 5,888 31,960 7.69 5.43
South Carolina 25 $538,650 150 180 7.20 1.20
South Dakota 98 $192,616 236 643 6.56 2.72
PI 6
Tennessee $270,000 48 48 8.00 1.00
Texas 2,147 $28,235,244 5,178 20,784 9.68 4.01
Pi Virginia 297 $5,280,000 1,529 2,338 7.87 1.53
Washington 1,363 $8,805,316 2,519 10,795 7.92 4.29
West Virginia 3,934 $22,872,265 6,176 34,389 8.74 5.57
TOTAL 55,894 $904,014,691
Canada
n
Alberta 1,093 $8,573,955 1,357 8,478 7.76 6.25
British Columbia 1,113 $13,202,283 1,507 8,202 7.37 5.44
is?
Manitoba 602 $4,032,550 849 4,308 7.16 5.07
Ontario 2,240 $47,447,346 2,621 17,327 7.74 6.61
Saskatchewan 351 $1,005,923 463 2,230 6.35 4.82
TOTAL 5,399 $74,262,057
GRAND
iS|
TOTAL 61,293 $978,276,748

Source: Equibase Company LLC

PS|

h t t D : / / w w w. i o c k e v c l u b . c o m / f a c t b o o k / b r e a k d o w n . h t m l 1 0 / 1 5 / 1 9 9 9
ppl

Ifp

FACTS & FIGURES IX

W\
USA/BRITISH COLUMBIATHOROUGHBRED RACING
BRIEF STUDY OF TAX METHODS BY JURISDICTIONS

Bi\

STATE/PROVINCE WIN-PLACE-SHOW EXACTOR/DOUBLES EXOTIC EFFECTIVE EFFECTIVE

TAKEOUT PARI-MUTUEL
RATE TAX RATE

BRITISH COLUMBIA 15.8% 23.8% 26.55%-26.8% 23.23% 2.4%

w\
ALABAMA 18% 22% 24% 20.55% 3.0%
ARIZONA <25% <30% <35% n/a n/a
ARKANSAS 17% 21% 21% 20.16% 2.56%

r CALIFORNIA
COLORADO
DELAWARE
FLORIDA
15%
18.5%
17%
19.75%
25%
19%
19.75%
25%
25%
19.31%
n/a
20.16%
4.12%
n/a
0.16%
n/a n/a n/a 21.43% 2.02%
pi
IDAHO 20% 20.75% 20.75% n/a n/a
ILLINOIS 17% 20.5% 25% 22.39% 4.0%
INDIANA 18% 21.5% 21.5% 20.08% 2.75%
IOWA <18% <24% <25% n/a n/a
KANSAS 18% <22% <22% n/a n/a
KENTUCKY 17.5% 19% 19% 19.6% 2.36%
LOUISIANA 17% 20.5% 25% 21.56% 1.5%
MAINE 18% 26% 26% n/a n/a
MARYLAND 17% 19% 25% 20% 0.46%
MASSACHUSETTS 17% 19% 25% 23.55% 0.46%
MICHIGAN 17% 20.5% 25% 21.81% 3.43%
MINNESOTA 17% 23% 23% 20.93% 0.06%
MISSOURI 18% 20% 25% n/a n/a
w MONTANA 20% <25% <25% n/a n/a
NEBRASKA 15-18% <24% <24% 21% 0.43%
NEW HAMPSHIRE 19% 26% 26% 21.2% 1.6%
NEW JERSEY 17% 19% 25% 18.91% n/a
NEW MEXICO 19% 21-25% 21-25% n/a n/a
NEW YORK 15% 20% 25% 21.56% 2.57%
NORTH DAKOTA 20% 25% 25% n/a n/a
OHIO 18% 20% 25% 21.18% 2.63%
OKLAHOMA 18% 20% 25% 21.49% 2.65%
OREGON 19% 22% 22% n/a n/a
PENNSYLVANIA 17% 20% 26-35% 22.6% 1.59%
S.DAKOTA 19.5% 22.5% 22.5% n/a n/a
TENNESSEE 17.5% <21% <25% n/a n/a
TEXAS 18% <21% <25% 21.72 1.0%
VERMONT 18% 18% 25% n/a 2.51%
VIRGINIA 18% 22% 22% 20% n/a
WASHINGTON 16.1% 22.1% 22.1% 20.16% 2.25%
i B
W.VIRGINIA n/a n/a n/a 19.95% 1.29%

AVERAGE 2.38%
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 FACTS & FIGURES XII

[pi 1999 YEARLING SALES RESULTS

A % COMPARISON
USA AND B.C.

SALES VENUE GROSS $ AVERAGE $

s?j

KEENELAND (JULY) + 6.8% +20.6%

FASIG TIPTON (JULY) +58.2% +35.2%
SARATOGA SELECT +13.9% +23.7%
OCALA (AUGUST) + 7.2% + 3.2%
WASHINGTON (SEPT) +19.8% + 8.2%
WOODBINE +10.6% +12.9%
MANITOBA +85.8% +36.4%
ALBERTA +24.2% +12.7%
pi
KEENELAND (SEPT) +37.3% +30.3%

BRITISH COLUMBIA -46.6% -18.9%

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USA
Pari-Mutuel Handle - Live Races ($) 1997 Pari-Mutuel Handle - Inter-Track Wagering ($)
Thoroughbred Quarter Horse Harness Total Thoroughbred Quarter Horse Harness Total
Alabama ^^^j ....,< -~^ -'"''.^'j".. X'^Jiyif' *?~JA.~i Ji"*."'';'!",J"t "* 1'?s*T*^zr: ;lU?'Wi;"t'1 ~- *~
5 " j y V " Vi ~ - ~ - ' j r ^ . * i f ~ - . 3 a i t O D o , J O O > > * _ * * i . - ^ , i . j ^ f _ w < - , < , , A " . 3 ^ < , s > * 4 t . i n . - . < i ) : ^ . , T | . Y ( % ' * j _ j ^ * i > O i , 0 0 0 , 0 0 0 '
Arizona 29,597,942 29,597,942 Included in Off-Track Wagering
Arkansas ~".; ^ > , - * - * V Ta ~ r ^ t s , ~ w . . a . > ^ _ j ^ . w , ' - ^ k i - . s . i i w . j ^ . i , j , - l . . t r j n < ; . ! . : - . -
California 5 7 0 , 5 8 2 , 9 8 3 4 1 . 2 0 8 . 0 4 6 2 0 , 4 3 4 . 3 2 1 4 0 . 9 11 , 5 3 3 * " 6 7 3 , 1 3 6 . 8 8 3 Included in Off-Track Wagering
Colorado-:., Vi" ^ .':". v.!;;:r:::H,^: t^ViZZ^'JS.'.i'?J ".L..~-1";;-2,770,889 '^~ 2,770.889; Inducled In Off-Track,Vyage^
Connecticut Included in Off-Track Wagering
Delaware-1 v*~ ^30,379.849 -i.t
Florida 250,714,652 31,772,234 *"" 282,486,886
386.909.453 " '64.422.272 451.331.725
.Idaho /;/ "V _ ^ *?>/;:?j;;^k,;.>^.w.A)t3?Tj:52: ^ta^^u^SP*:-'.;23.074;sd2 ^,^23,074.5021
Illinois 136,155,793 65.053.636 -" *" ' * " ' *"" "201,268.829' 306j72.625" "'" "99^852;875 " "466.625,566
(Indiana" ""-> V ^15.264.793^- % *i. v, *, *-,^ .. r^: *^~. ^ ^,; j Included Jn Off-Track,Wagertng T^.t^ffiv Wflr^iTS *t^ i >-i VZ Zi S-;
Iowa 8,536,154 8,536,154 37.249,023 37,249,023
iKansas.",y'-.r;. ';iiL1!fv&*^^^^
Kentucky 196.761,930 2.513.558 199,275,488 367,815,483 ' 8,212,734 376.028,217
.Louisiana ".;/' w "L, 57,454,246 V' *'V"? r^^^iJrfKtTi-
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! " r r " ^'4.536;528;t^3;g^,61,990J74.
"" " 9,649,867
Maine 9.649.867 "96.941"""* "26.6l6.611 26.107,552
Maryland' ^r; i" -l"84.697,l47,^w ::&::^&:W*JW'M'k ' ;^eIiJ03.323,3Jf ;A^r:^3l4.274,778-v-^:,r^'i^i
Massachusetts 39.704.839 3,425,795 43,130.634 144.178,858 15.181.754 7,238,188 166,598,800
'Michigan.;;-',"'' i-;39,735.043 *,&.*?. i v'^W^^fT$f?5.M3>07t^ v^^27;,338S;Tf^11.Q5.452- ^ ^ 2 0 1 . 4 0 1 . 7 4 8 ^ ^ ^ ^
Minnesota 253.241 11 . 0 S 0 . 1 6 8 11 . 3 4 3 . 4 0 9 51,629,948 299,255 2,306,391 439.680' 54.675,274
.Montanar-V .^ i';*l3;768,877 "jSS&Ji :3;768,B77,
Nebraska 9,433,185 " ' * 9,433,185 78.832,493 >8,832,493
[Nevada ,~^\'z' 1 - f J ' L - t f f : : ' " - . . ' V : r. C T i ^ ^ a S t r a ^ V ' ' ^^ { 2 9 5 , 3 6 3 ' ^ ^ ' 2 9 5 . 3 6 3 :
. . . - t - - . , - ^ . ^ g . w l * , l " - t 4 " * * 2 1 , 0 3 7 , 4 1 5 * " W, , H 1 3 4 ' . 9 7 5 . 1 2 5
New Hampshire 18.662.839 690.421 "l9.353.266
rNew Jersey.^, .,'- ^127.p52.913,f ; r-\v!&&W^2#,857,^ ?L ^;532.237;673"^;;^^
New Mexico 22.181,004 22,181.004 76,603.970 76.603.970
.NewYorkr.-;^^- ,;X4.331949,7327.;:;r:;.'i 1*. tiftfft%irttt 9l;499,299i^ u^' ^;%^ft^^j525.449,031; ^trVJr-228321077^^*S.1t!^\^^^
North Dakota 68,214 ~ 68,214
4* *./JVl***+f&t* *}'-. j, ^^IJ.S'wa-SH.ir^
'^102,291.841^ ?^v~i47;549^ N. alfHi -t ^t,
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" " 200.939,370!
"41.742.992 """^ " 19,197.908 '" '" " ""*' - 106,781.191' * 125.979.099
Oklahoma 19.913.222 * ' 21.829.770
pregon i.\/- ' '//.* :r'j^^^-b-iv^^,. i::v; 'x^r^ AifectsAtfiKiviTl.r*.-,1*7,938.021 .^ii^7.9369?1- Vlj;- ^.r:>^:;r;-t; ;;jx;j .-J iv--v!ncluded lr| OJVTracfc.VVageiingu-cnr/^^^^V^^^ ^r< ^
Pennsylvania 109.961.239 31.818,056 141,779.295 included In Off-Track Wagering
'Rhode Island^. S^jAAUsjCfA -." .v-^... ^J.-K.V, av^ ~ *..>. .,, .^-H.v.u.^in-iio^.,^^; --.-iff'sQ wsfAm.^^-''^' 59.857fl62s
South Dakota 253.395 *" 253.395
fTexas '-?*. 2?v:#r3T?.5?3'.?35:''^1^53^889^5^Jj^Pg^lSpw t'^6.612.g3g|g^|i;iC)4574^93 _ L ' ^ ^ ^ ' K ^ f J i ^ i ^ l ^ ^ '"CW' B C *. " &' U
" "5"t t ^~. 3 3' 3 , 9' 2 3", 71 3
05. 5, ^2^93 3 3' . 9 27 337. 15 02 59]
Vermont 361,612 K ' 361,612
iyirginla '}S}'!:?,
Washington 61.264,578 1,209,590 62.474.16? 75.404,226 75,404.226
.West Virginia ^r, ,-,.is- ,%,'rrvr V'1 ^56,183.9191
W5?aS558J83A15s?*i*.*dct*f*s>*.\
Wisconsin 54.796.437 54.796.437
; Wyoming V-i. 1": ^ & * * * *- 3*^'-
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Totals 2,484.623,070 59,894,564 665,777,012 170,931,088 3,381^25,734 3,112,658,489 299,255 657,358,196 1,323,625,243 5,093,941,183 Ui
9P
Note: live "mixed" racing Is primarily a mix of Thoroughbred, Quarter Horse, and other flat racing. ITW handle in Rhode Island Includes Greyhound racing.
Classification of reported data In some states has changed from previous years. Please see notes on Individual states under "Explanatory Notes." *l
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 PRA SCHEDULE 1
FINANCIAL PERSPECTIVE
1995 TO 1998
STATEMENT OF OPERATIONS

1995 1996 1997 1998

(10 MONTHS) (11 MONTHS) (12 MONTHS) (12 MONTHS)

T O TA L R E V E N U E $ 2 5 , 2 2 7 , 4 0 0 $ 2 4 , 8 8 4 , 2 1 6 $ 2 5 , 9 2 2 , 6 4 5 $ 2 5 , 9 2 2 , 6 4 5
T O TA L E X P E N D I T U R E $ 2 2 . 9 0 5 , 5 5 7 $ 2 4 , 4 8 1 , 2 4 5 $ 2 5 , 9 7 8 , 5 8 3 $ 2 5 , 9 7 8 , 5 8 3
NET (LOSS)/INCOME $2,321,843 $402,971 ($55,938) $(53,360)

NOTE: EXTRACT FROM 1998 PACIFIC RACING ASSOCIATION AUDITORS REPORT

"AS AT DECEMBER 31, 1998 THE ASSOCIATION WAS NOT IN COMPLIANCE WITH THE TERMS
OF ITS PROVINCE OF BRITISH COLUMBIA LOANS AND SCHEDULED PAYMENTS HAVE BEEN
DEFERRED UNTIL JANUARY 4, 2000 THE ASSOCIATION IS CURRENTLY IN DISCUSSIONS
WITH ITS LENDER TO RENEGOTIATE THE TERMS AND CONDITIONS OF THESE LOANS. "
SIGNED DELOITTE & TOUCHE LLP
CHARTERED ACCOUNTANTS, MARCH 25, 1999
 PRA SCHEDULE 2
FINANCIAL PERSPECTIVE
1995 TO 1998

1995 1996 1997 1998

* C A S H / A C C O U N T S R E C E I VA B L E $ 4 , 1 0 4 , 5 2 2 $ 3 , 9 5 0 , 0 8 1 $ 4 , 6 0 4 , 4 3 0 $ 3 , 8 2 7 , 3 3 9
A C C O U N T S PAYA B L E / A C C R U E D $ 1 , 5 8 2 , 3 2 6 $ 1 , 4 5 2 , 0 5 8 $ 2 , 7 2 8 , 8 8 4 $ 2 , 6 9 6 , 4 6 1

R AT I O 2.59:1 2.72:1 1.69:1 1.42:1

PERSPECTIVE 1995 - 1998

*NOTE:

CASH AT BANK $3,626,459 > $2,986,700

AVER PARI-MUTUEL
M O N T H LY REVENUE $2,078,500 > $1,880,338
 PRA SCHEDULE 3
FINANCIAL PERSPECTIVE
1995 TO 1998

REVENUE 1998
$AMOUNT (AS % TOTAL) 1995 - 1998
$INCREASE/DECREASE FOR PERIOD

TOTAL REVENUE $29,909,498 (100%)

MUTUEL OPERATIONS $22,564,062 (75.4%) > UP +$1,779,057 (+8.6%)

$2,438,769 (8.2%) > UP +$1,150,392 (+89.1%)
BCRC/HRIF (RFF) FUND
ADMISSIONS $966,662 (3.2%) > DOWN -$283,849 (-22.7%)
TELETHEATRE B.C. $ 111 , 5 6 9 (0.4%) > DOWN -$749,238 (-87.0%)
OTHER $398,387 (1.3%) > UP +$175,230 (+78.5%)
PROGRAMMES (NET) $286,714 (1 .0%) > DoWN -$129,053 (-31.0%)
INTEREST $286,742 (1 .0%) > DOWN -$8,305 (-2.8%)
FOOD & BEVERAGE $2,889,206 (9.5%) > N/A

TOTAL REVENUE 1998 $29,909,498 (100%)

COMPARE:

1998 PRA CONTRIBUTION TO

PURSES $ 9 , 4 11 , 5 8 8

(AS % OF 1998 MUTUEL

REVENUE) (41.71%)

PERSPECTIVE 1995 - 1998

BCRC PAY M E N T S TO PRA > UP + 8 9 . 11

MUTUEL REVENUES > UP +8.6=
CONTRIBUTION TO PURSES > DOWN -3.8*
TBC REVENUE > DOWN -87. 0:
 PRA SCHEDULE 4
FINANCIAL PERSPECTIVE
1995 TO 1998
OPERATIONAL EXPENDITURES 1998

$AMOUNT AS TOTAL 1995 - 1998

%INCREASE/DECREASE

TOTAL EXPENDITURES $29,964,858 (100%)

*PAYROLL/BENEFITS $8,070,023 (26.9%) UP $1 , 1 5 4 , 0 3 8 (+16.7%)

SIMULCAST FEES $2,965,172 (9.9%) UP $2,035,210 (+218.8%)
GENERAL ADMINISTRATIVE $1,494,075 (5.0%) UP $466,223 (+45.5%)
OPERATIONAL SERVICES $1,349,160 (4.5%) UP $177,655 (+15.2%)
RENT $1,045,320 (3.4%) DOWN - -$471,652 (-31 .1%)
ADVERT/PROMOTION $1,024,897 (3.4%) DOWN - $ 8 2 , 7 3 5 (-8.8%)
DEPRECIATION/AMORTIZATION $842,679 (2.8%) UP $435,215 (+106.8%)
REPAIRS/MAINTENANCE $809,445 (2.7%) UP $351,983 (+76.9%)
INTEREST $515,672 (1-7%) UP $82,392 (+19.0%)
COST RECOVERY ($34,794 0.2% UP $313,145 (+89.9%)

SUB TOTAL $18,081,649 (60.3%)

PRA CONTRIBUTION TO PURSES $9,411,588 (31.4%) DOWN -$45,344 (-4.8%)

SUB TO TA L 1998 $27,493,237

FOOD/BEVERAGE COST OF SALES $1,006,126 (3.4%)

* F O O D / B E V E R A G E PAY R O L L $ 1 , 4 6 5 , 4 9 5 (4.9%)

TOTAL EXPENDITURES 1998 $29,964,858 (100%)

*TOTAL PAYROLL BENEFITS $9.535,518

 PRA SCHEDULE 5
FINANCIAL PERSPECTIVE
1995 TO 1998

GRANTS RECEIVED BY PRA FROM HRIF (RFF) FUND

1995 1996 1997 1998

PRA HRIF RECEIPTS $1,208,377 $1,640,667 $2,205,291 $2,429,336

(AS % OF PRA MUTUEL REVENUES) (5.81%) (8.02%) (10.29%) (10.77%)

PRA EXPENDITURES ON FIXED

ASSETS/LEASEHOLD IMPROVEMENTS $1,088,320 $583,835 $928,444 $1,389,446
(AS % OF HRIF RECEIPTS) (90.1%) (35.6%) (42.1%) (57.2%)

PERSPECTIVE 1995 - 1998

HRIF (RFF) GRANTS RECEIVED FOR PERIOD > $7,483,671

% INCREASE FOR PERIOD > +101%
 PRA SCHEDULE 6
FINANCIAL PERSPECTIVE
1995 TO 1998

CONTRIBUTION TO PURSES

1995 1996 1997 1998

MUTUEL REVENUES $20,785,005 $20,457,159 $21,425,963 $22,564,062

PRA CONTRIBUTION TO PURSES $9,456,932 $9,281,812 $9,232,845 $9,411,588

(AS % OF MUTUEL REVENUES) (45.50%) (45.37%) (43.09%) (41.71%)

NO. SIMULCAST EVENTS 96 290 + 700+ 1,200+

COMPARE:
PRA - HRIF (RFF) GRANTS TO PRA $1,208,377 $1,640,667 $2,205,291 $2,429,336

PERSPECTIVE 1995 - 1998

MUTUEL REVENUES > UP +8.6=

PRA $ CONTRIBUTION TO PURSES > DOWN -4.8=
 PRA SCHEDULE 7
FINANCIAL PERSPECTIVE
1995 TO 1998

ADVERTISING/PROMOTION

1995 1996 1997 1998

EXPENDITURE $942,162 $927,152 $817,962 $1 , 0 2 4 , 8 9 7

(AS % OF PRA OPERATIONAL
EXPENDITURES) (4.1%) (3.8%) (3.1%) (3.4%)

NO. LIVE EVENTS/SIMULCASTS 96 290 710 + 1,200+

ATTENDANCE (LIVE) 668,637 605,842 505,745 405,000

ADVERT. COST PER CAPITA

ATTENDANCE $1 .41 $1 .53 $1 .62 $2.53

$HANDLE ON TRACK (LIVE) $112.9m $101.9m $68.2m $50.1m

$HANDLE GENERATED BY $1
AD SPEND $120 $110 $83 $49

PERSPECTIVE 1995 - 1998

AD SPEND PER CAPITA ATTENDANCE > UP +79%

$ HANDLE GENERATED BY $1 AD SPEND > DOWN -59%
 PRA SCHEDULE 8
FINANCIAL PERSPECTIVE
1995 TO 1998

ADMISSIONS - CONCESSIONS - PROGRAMMES (ACP)

1995 1996 1997 1998

ACP REVENUE: ADMISSIONS $1,250,511 $1,102,175 $1,031,575 $966,663

CONCESSIONS $187,815 $42,835 ($52,140) *$417,585
PROGRAMMES (NET) $415,677 $375,458 $319,786 $286,714
$1,854,003 $1,520,468 $1,299,221 $1 ,670,961

ATTENDANCE 668,637 605,842 505,745 405,000

ACP - PER CAPITA REVENUE $2.77 $2.51 $2.57 $4.12

REPAIRS/MAINTENANCE COST
PER CAPITA ATTENDANCE ($0.68) ($1 .10) ($1.29) ($1.99)

PERSPECTIVE 1995 - 1998

^CONCESSIONS 1998 -> $417,585 REPRESENTS NET PROFIT OF 14.5*

ON SALES OF $2,889,206 BEFORE ANY
CONTRIBUTION TO GENERAL OVERHEAD COST
CENTRES
 FACTS & FIGURES XXV

THE HORSE RACE IMPROVEMENT FUND

PERIOD 1994-1997

1994 1995 1996 1997

BCRC Receipts
from
P r o v. G o v t $ 6 , 2 4 8 , 3 2 7 $ 7 , 111 , 9 4 5 $ 7 , 1 4 2 , 9 4 7 $ 8 , 0 8 9 , 8 1 8

Paid direct
to PRA (RFF) $ 781,041 $1,337,731 $1,695,106 $2,429,336
Allocation
Gen.Programme
Monies $4,010,495 $4,151,178 $3,969,977 $4,164,476

Bal.to
Gen.BCRC Acct.$1,456,791 $1,623,036 $1,477,864 $1,496,006

Notes:
(i) Government tax rebates UP $1,841,491 (29.5%)
(ii) PAYMENTS TO PRA UP $1,648,295 (+111.0%)
(iii) Gen.purse supplements UP $11,917 (+0.9%)
(iv) In 1997 the PRA received direct payment of 30%
all monies received from the Provincial Govt.,
as compared to 12.5% in 1994.
 FACTS & FIGURES XXVI

OFFICE OF THE INFORMATION & PRIVACY COMMISSIONER

FREEDOM OF INFORMATION REQUEST

REQUEST FOR REVIEW

SCHEDULED ENQUIRY OCTOBER 8, 1999

BETWEEN

APPLICANT: BRIAN R. HAYES

PUBLIC BODY: BRITISH COLUMBIA RACING COMMISSION
THIRD PARTY: PACIFIC RACING ASSOCIATION
Re: OIPC File 9230

In the Matter of a Request for Review between

an applicant
and
the British Columbia Racing Commission (public body)
and
the Pacific Racing Association (third party)
Written enquiry Scheduled for October 8, 1999
Office of the Information and Privacy Commissioner

SUBMISSIONS OF THE APPLICANT

Re: OIPC File 9230

In the Matter of a Request for Review between

an applicant
and
the British Columbia Racing Commission (public body)
and
the Pacific Racing Association (third party)
Written enquiry Scheduled for October 8, 1999
Office of the Information and Privacy Commissioner

SUBMISSIONS OF THE APPLICANT

A. Background
Pursuant to Section 2 of the Horse Racing Act, R.S.B.C. 1996,
a tax (7% of pari mutuel bets) is imposed upon persons betting at
racecourses and teletheatres in BC for the purpose of raising
revenue for government.
Of this tax, the Minister of Finance and Corporate Relations
must pay to the British Columbia Racing Commission 4% of the money
raised and additional amounts under certain conditions.

Further, under the Horse Racing Tax Act, "the Commission must
annually account to the Minister (Finance and Corporate Relations)
for the disbursement of money received by it for the purposes of
this Act."
Under the Horse Racing Tax Act Regulation, B.C. Reg. 590/80,
Section 2 states that the Commission shall disburse the money paid
to it by the minister under section 2 (3) of the Act (the 4%) in
accordance with sections 3, 4 and 5 of this regulation.
A s t o t h i s m a t t e r, S e c t i o n 5 o f t h e R e g u l a t i o n e n t i t l e d
"Grants" is germane, in part, as follows:
5. "(2) An amount not less than 0.5% of the amount deposited
with every operator by persons placing bets at a race meeting under
the pari mutuel system may be disbursed (by the B.C. Racing
Commission) for the purpose of making grants for (a) the
establishment or improvement of horse racing facilities in the
Province"
 -2-

B. Requests for Information to the British Columbia Racing

Commission (BCRC)
1. Letter dated October 5, 1998 from applicant to Lorna
Romilly, Chair, BCRC asking three (3) questions pertaining to the
payment of grants, (and the accounting and auditing thereof) made
by the BCRC (the public body) to the Pacific Racing Association
(PRA) (the third party), a true copy of which letter is attached as
Exhibit "A".
2. Letter dated February 18, 1999 from Lorna Romilly, Chair,
BCRC, to the applicant, a true copy of which letter is attached as
Exhibit "B".
I n t h a t l e t t e r, i t i s i m p o r t a n t t o n o t e t h a t M s . R o m i l l y
makes the following statement:
"The Commission tracks the funds to be spent on research and
f a c i l i t i e s g r a n t e d t o t h e P a c i fi c R a c i n g A s s o c i a t i o n f r o m t h a t
section of the Horse Racing Improvement Fund. We have had an
independent audit completed recently on a four year period on the
schedule of expenditures by the PRA on establishing or improving
racing facilities as outlined in regulation 5 (2) of the Horse
Racing Tax Act Regulations and section 4 of the Horse Racing Tax
Act. We are satisfied that they have spent the grants in accordance
with the terms as set out in the Act and Regulations." (emphasis
added)
3. As a consequence of Ms. Romilly's letter of February 18,
1999, the applicant made a request pursuant to the Freedom of
Information and Protection of Privacy Act, on May 6, 1999 for the
"schedule of PRA grant expenditures" which was subject to the 4
year period, namely 1994, 1995, 1996 and 1997 (a true copy of the
applicant's request of May 6, 1999, is attached as Exhibit "C").
4. As to the applicant's request of May 6, 1999, the BCRC
responded by letter dated June 28, 1999 as follows:
"The PRA and the accounting firm were advised of a request
for the "schedule of PRA grant expenditures". Their reply stated
that they did not wish the report disclosed and supplied
information which met the three-part harm test under Section 21 of
the Freedom of Information and Protection of Privacy Act.
As a result a severed copy of the requested information is
attached."
A true copy of the BCRC's letter of June 28, 1999 and the
attachments thereto is attached as Exhibit "D".
 -3-

As to the BCRC's letter and attachments, it is important to

note the following:

(a) The alleged information which allegedly met the three-

part harms test under Section 21 of the Act has never been
disclosed to the applicant. (The applicant shall be making
submissions with respect to the three-part harms test hereinafter).

(b) A severed copy of the PRA's Schedule of Expenditures on

Establishing or Improving Horse Racing Facilities in British
Columbia was only provided for the year ended December 31, 1997,
but not for 1994, 1995 and 1996 as requested.

However, a simple undetailed severed copy of a "Comparison

of Research and Facilities Funding from the BCRC to Expenditures
made by the PRA on Establishing or Improving Horse Racing
Facilities in British Columbia for the period April 13, 1994 to
December 31, 1997" and "Schedule of Expenditures by the PRA" was
provided and indicates that for the period a total of $5,734,655 in
grants (public funds/tax money) was paid by the BCRC to the PRA.
As to this "Comparison" and "Schedule" it is important to
n o t e t h a t t h e fi g u r e s p r o v i d e d t h e r e i n a n d t h o s e s e v e r e d a r e
"unaudited" as indicated in the "Notice to Reader":
"We have compiled this statement from information provided by
management. We have not audited, reviewed or otherwise attempted to
verify the accuracy or completeness of such information. Readers
are advised that this statement may not be appropriate for their
purposes." SURREY B.C. March 31, 1999 MACKAY & PARTNERS, Chartered
Accountants.

It appears that an audit of the said Schedule of

Expenditures on Establishing or Improving Horse Racing Facilities
was only completed for a one-year period ending December 31, 1997
and submitted to the BCRC on November 12, 1998 and that no audit
was conducted or completed for the years 1994, 1995 and 1996 and
t h a t o n l y a c u r s o r y, u n a u d i te d r e v i e w w a s c o n d u c te d o n M a r c h 3 1 ,
1999, after and in contradiction to Ms. Romilly's assertions of
February 18, 1999 to the Applicant.
5. As a result of the foregoing, the Applicant, by letter
dated July 14, 1999 made request for a review pursuant to the
F r e e d o m o f In fo r m a ti o n a n d P r i v a c y A c t ( " th e A c t" ) to th e Of fi c e o f
the Information and Privacy Commissioner and a true copy of the
said letter is attached as Exhibit "E".
 -4-

C. Submissions of the Applicant with respect to Section 21 of the

Act and the positions of the BCRC (public body) and PRA (third
Party).
As to Section 21 , the burden of proof is cast upon the
public body to prove that the applicant has no right of access to
the record, or part of it. The question becomes: does the
information meet the three-part harms test in Section 21 and how
that Section has been interpreted or should be interpreted ?
1. As to the burden of proof cast upon the public body, in
a previous decision of the Information and Privacy Commissioner
( I P C ) , n a m e l y, I n q u i r y R e M i n i s t r y o f F i n a n c e a n d C o r p o r a t e
Relations (Order 1-1994, January 11, 1994) at p.10, the IPC ruled
that a public body must adduce "detailed and convincing" evidence
to prove a reasonable expectation that a "specific, real harm" will
flow from the disclosure of the information in issue."
2. As be noted from Section 21 (1), (the exception to
disclosure) has three components, all of which must be satisfied
before the exemption applies. Not either of them, but all three of
the components must be evident. See Inquiry Re a Request for Access
to Records of BC Transit (Order 19-1994, July 26, 1994).
I n t h e i n s t a n t m a t t e r, i t i s s u b m i t t e d t h a t c l e a r l y S . 2 1
(b) , that is, information that is supplied, implicitly or
explicitly, in confidence does not apply.
This is so because the BCRC (the public body) which is
appointed by the Province to oversee the conduct of horse racing in
BC under the British Columbia Racing Commission Act, and which body
under the Horse Racing Tax Act and Regulations thereto, aforesaid,
has the duty and is statutorily obliged (a) to annually account to
the Minister of Finance, for all grants paid to the third party and
indeed, is to file an Annual Report with the Legislature of British
Columbia, which in a free and open democratic society is the most
public of all bodies - directly answerable and responsible to the
people of British Columbia.
 -5-

Therefore, as to these sizable grants which are public

monies (taxes) paid to the third party, the third party should not
h a r b o u r a n y e x p e c t a t i o n s o f p r i v a c y o r c o n fi d e n c e a s t o t h e i r
expenditures of this money. Indeed, having regard to the BCRC,s
duties and obligations under statute in relation to this money, the
third party should expect, that in its prudent stewardship of this
money that the BCRC will conduct a thorough review and audit and
provide a detailed accounting thereof to the Ministry of Finance
and the Legislature of the Province, very public bodies which are
in turn accountable to the public at large. Further, in relation to
the "public" nature of these funds, the third party, in the public
interest, should not be permitted to implicitly or explicitly state
that the information is given in confidence. (It is noted that to
January 1996 the third party was a CROWN CORPORATION converted to
a society on that date).

Further, Section 21 (1) (b) only applies to information

"supplied" by a third party to a public body. If the information
has been generated by the public body itself, it will not qualify
as information that has been supplied to the public body. For an
analogy, see Canada Packers Inc. v Ministry of Agriculture (1988)
53 D.L.R. (4th) 246 (F.C.A.) where it was held that the government
agency meat inspection reports based on plant inspections by
government representatives did not constitute information
"supplied" by the third party to the government. In the instant
m a t t e r, t h e p u b l i c b o d y ' s a u d i t o r s w e r e e n t i t l e d t o c o n d u c t a n
audit of the third party and the auditor's report so generated for
and by the public body should not fall within this sub-section.

Furthermore, a number of the IPC's previous decisions

indicate that wherever possible the IPC will wish to see evidence
that the information was "explicitly" supplied in confidence (i.e.
marked as such).
With respect to S.21 (1) (c) of the Act, it is difficult
to imagine how the disclosure of information herein could
reasonably be expected to (i) "harm significantly" the competitive
position or negotiating position of the third party when the
information only pertains to a schedule of expenditures of grants
for horse racing facility capital improvements, such as enumerated
b y t h e t h i r d p a r t y, n a m e l y, " M i s c e l l a n e o u s E q u i p m e n t ,
Communications, Money Room Equipment, Computer Equipment and
Software, Equipment/Furniture, Equipment Backstretch, Janitor
Cleaning Equipment, Leasehold Improvements Buildings, Leasehold
Improvements - Grounds, Food and Concession, Leasehold Improvements
- Development, Tractors under Capital Lease, Purchase of Sinking
Fund Investment, Interest on Province of B.C. Loans.
 -6-

Subsection 21 (1) (c) (ii), "result in similar

information no longer being supplied to the public body" would
clearly not apply as the public body is obliged by law to obtain
the said information. The third party could, of course, refuse to
make the information available to the public body in which case the
public body would be necessitated to terminate the multi-million
d o l l a r g r a n t s t o t h e t h i r d p a r t y.

Again, it is difficult to foresee how subsections 21 (1)

(c) (iii) and (iv) would apply to the instant matter.
Notwithstanding the submissions contained herein, the
then Minister (the Hon. Mike Famworth) responsible for gaming
(including the BCRC public body) made statements in the B.C.
Legislature on June 21, 1999 in response to questions regarding the
monitoring of grant monies paid to the third party (PRA) (see
Appendix p.6). When asked, "Will the results of the recent audit
(Mackay & Ptnrs) be made public?" The minister replied, "Yes."
In closing, the spirit and intent of the Freedom of
Information and Privacy Act should be adhered to. With the existing
panoply of corporations and societies benefiting from government
grants, vigilance over disbursements is vital as is the need to
ensure that no grant recipients "slip through the cracks" of an
audit process. The public interest should be paramount, not the
interest of a party who may or may not be embarrassed.
At December 31, 1998 the third party was not in
compliance with the repayment terms of its $6.4 million Provincial
Government loans received in 1994/5. This despite the fact that
between 1994-1998 the public body paid to the third party grant
monies in excess of $7.4 million. The payment of grant monies to
the third party is ongoing. By year end 1999 grant monies paid by
the public body to the third party will total almost $10 million.
These are public funds and a public accounting thereof should be a
public right. Have the provisions of the Horse Racing Tax Act and
Regulations thereto been completely complied with as required by
law?
If necessary, I would request that the Section 25 "public
interest override" be considered if my submissions as to Section 21
fail. These are my submissions.
Dated this 24th. day of September, 1999.
RESPECTFULLY SUBMITTED

^ A ^
Applicant.
 E X H I B I T A.

Ms. Lorna Romilly,
Chair, B.C.Racing Commission,
Ministry of the Attorney General,
Suite 2003, 472o Kingsway,
Burnaby, B.C. V5H 4N2

VIA FACSIMILE 604-660-7414

October 5th. 1998

Dear Ms. Romilly,

It is now almost one year since my letter to you dated November 17th. 1997 , and several
months since our meeting when I set out my concerns regarding the senior management of the
PRA operations at Hastings Park.

I stand by my comments made to you when we met, as well as any subsequent statements I have
made on the status of Hastings Park activities. I believe the current financial position, and
quality of management of the PRA is cause for grave concern. Certainly vindicating the points
made on pages 2 and 3 of my November 17th.letter. PRA management appears to be in a state of
denial. As recently as two weeks ago its Chair made a presentation to the HBPA, which at best
flirted with the truth. This observation has subsequently been confirmed by a member of the
PRA Board. If the PRA cannot communicate openly and honestly with people who make up the
backbone of the industry what does that say about hopes for any future ?

The 1996 report issued by your Commission states that the BCRC "is responsible for ensuring
a high standard of integrity in thoroughbred racing thereby maintaining the confidence of the
betting public in the industry".

By the end of 1998 the PRA will have received well in excess of $7 million dollars in grants
from the Research and Facilities Fund. The original source of such funds coming from pari-
mutuel betting taxes. Therefore, I ask if you would;

1 . Confirm that each and every payment made to the PRA from the Research and Facilities Fund
has been made exactly in accordance with the terms set out in the Horse Racing Tax Act
and Horse Racing Tax Act Regulation ?

2. Confirm that the BCRC is satisfied that all monies paid to the PRA, via the Research and
Facilities Fund have been disbursed strictly in accordance with the terms of issue of
funds set out in the Act referred to in (1) above ?

3. Confirm what audit control procedures do the BCRC have in place to ensure that misuse
of funds does not occur ? Do the PRA Auditors certify to the BCRC that disbursement of
research and facilities funds received by the PRA, from the BCRC, have been made in
accordance with the Act in (1) above ?

Respectfully requested,

Brian R.Hayes.

15275, 93A Avenue,

Surrey V3R OE6
Tel:588-3793
Fax:588-9020

end
 EXHIBIT "B

^British
Columbia
February 18, 1999

Brian Hayes
15275 93A Avenue
Surrey, BC V3R 0E6

Dear Mr. Hayes:

! am replying in response to your letter regarding concerns about the management

of the Pacific Racing Association operations at Hastings Park.

The British Columbia Racing Commission does not usually interfere with the day-to
day management of track operations. We licence the track operators and assure
ourselves of their legal and financial fitness to operate a track, assure ourselves
that a high standard of integrity is being maintained in racing, races are run
according to our rules and regulations and that any funds to the track operators
from the Horse Racing Improvement Fund are spent in accordance with our
guidelines.

The Commission tracks the funds to be spent on "research and facilities" granted to
the Pacific Racing Association from that section of the Horse Racing Improvement
Fund. We have had an independent audit completed recently on a four year period
on the schedule of expenditures by the PRA on establishing or improving horse
racing facilities as outlined in regulation 5(2) of the Horse Racing Tax Act
Regulations and section 4 of the Horse Racing Tax Act. We are satisfied that they
have spent the grants in accordance with the terms as set out in the Act and
Regulations.

Yours truly,

Lorna Romilly
Chair

M i n i s t r y o f B r i t i s h C o l u m b i a M a i l i n g A d d r e s s : Te l e p h o n e : ( 6 0 4 ) 6 6 0 - 7 4 0 0
EmDlovment Racing Commission Suite 2003 Metrotower II Facsimile: (604)660-7414
. , . . 4720 Kingsway
and Investment Burnaby BC V5H 4N2

 EXHIBIT "C"
*

Ms. Lorna Romilly,

Chair, B.C. Racing Commission,
Ministry of the Attorney General,
Suite 2003, 4720 Kingsway,
Burnaby, B.C. V5H 4N2

By Fax: 604 660-7414

May 6th. 1999

Dear Ms. Romilly,

Thank you for your letter dated February 18th. 1999 responding to my letter to you of October
25th. 1998.

I note from your letter that an independent 4 year audit has been completed of the PRA
schedule of their expenditures of grant monies received by them from your Commission. Under
the Freedom of Information and Protection of Privacy Act I believe such a schedule can be
provided to members of the public upon request.

I would be grateful if you would take this letter as a formal request for access to records,
namely, a copy of the "schedule of PRA grant expenditures" which was subject of your audit,
together with the name of the independent auditors.

I appreciate your co-operation in this matter.

Yo u r s t r u l y,

Brian R. Hayes

15275, 93A Avenue,

Surrey V3R 0E6

Tel: 588-3793
Fax: 588-9020
 TUN 28 1999 12=52 FR BC RACING CC 1 r=f.j -vn "J; 1 TO 35889020 P. 0 2 / 0 8

P *
EXHIBIT "1~
Dv

^British
( OLUMBIA

June 28, 1999

VIA FAX (604) 588-9020

Mr. Brian Hayes

15275 93A Avenue
Surrey, B.C.
V3R 0E6

Dear Mr. Hayes:

Re: Ff -r.-iiom Of Infr rmation Request

Reference #\ '. 39/1

The PRA and the accounting firm were advised of a request for the "schedule of
PRA grant expenditures" Their reply stated that they did not wish the report
disclosed and supplied : umation which met the three-part harms test under Sec.
21 of the Freedom of Inu. ation and Protection of Privacy Act.

As a result a severed copy of the requested information is attached.

If I can be of any further service please contact me at 230-8882.

Yours truly.

//Joseph L. Horton
Director of Racing

Attachment

Ministry of Brit-sh Columbia Mailing Address. Telephone: {604) 660-7400

Racing Commission Suite 2003 Mcuotower facsimile- (604)660-7414
Employment
:"':: K tjsway
and Investment V 'r-H 4M?
JUN 28 1999 12=52 FR !C RACING COMMIES ION 604 660 7414 TO 95889020 P.03/08

EXHIBIT "T>

Pacific Racing Association

Schedule of Expenditures on Establishing or Improving

Horse Racing Facilities m British Columbia

For the year ended December 31, 1997

Page

Auditors' Report 2

Schedule 3

Note to the Financial Information 4

M ' P.irrMcrs r 1 -.;. m vis

JUN 28 1999 12:52 FR BC RACING COMMISSION 604 660 7414 TO 95889020 P.04/08

EXHIBIT "D
*

Auditors' Report

On Schedule of Expenditures on Establishing or Improving Horse Racing

Facilities in British Columbia

To the Commissioners of the British Columbia Racing Commission

We have audited the schedule of expenditures by the Pacific Racing Association ("the
Association") on establishing or improving horse racing facilities in,British Columbia
(including the cost of feasibility studies, research, the assessment of either of them and
nny other similar costs for the purposes of the establishment or improvement of
facilities) as outlined in regulation 5(2) of the Horse Racing Tax Act Regulation and
section 4 of the Horse Racing Tax Act, and the interpretation thereof, for the year ended
December 31,1997. Under the British Columbia Racing Commission's interpretation of
regulation 5(2) and section 4 of the Horse Racing Tax Act, expenditures are those
defined in note 1 to the financial information. This financial information is the
responsibility of the board of the Association. Our responsibility i$ to express an opinion
on this financial information based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.

Those standards require that we plan and perform an audit to obtain reasonable
assurance whether the financial information is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial information, .An. audit also. t^riiiHar; a.rrnrr.rvg th* account'^ principles
used and significant estimates made by the board of the Associa1;- -'. well as
evaluating the overall presentation of the financial information.

In our opinion, this schedule, when read together with the information set out in li
introductory paragraph, presents fairly, in all maien'al respects, the amount of
expenditures by the Association on establishing or improving horse racing facilities in
British Columbia (including the cost of feasibility studies, research, the assessment of
e'' f them and any other similar costs for the purposes of the establishment or
i. wmenl of facilities) as outlined in regulation 5(2) of the Horse Racing Tax Act
Regulation and section 4 of the Horse Racing Tax Act. and the interpretation thereof
referred to above, for the year ended December 31.1997.

S u r r e y, B C I '
November 12, 1998 Chartered Accountants
 P.05/08
m 28 ,399 12:53 FR BC IKING (Xtf1.96.GN 604 660 74!4 TO 95889020

E X H I B I T

Pacific Racing Association

Se^ of ^noU- on **-. - 3 Ho.. *-n. -* '

For the year ended December 31,1997
$
Miscellaneous Equipment
Communication
Money Room Equipment
Computer Equipment & Software
Equipment/Furniture
Equipment Backstrelch
Janitor Cleaning Equipment 5
Leasehold I mprovements-Buildings
Leasehold improvements-Grounds
Food & Concession
Leasehold improvements-Development
Tractors under Capital Lease
Purchase of sinking fund investment
interest on Province of B.C. loans
Total Expenditures (note 1)
JUN 28 1999 12:53 FR BC RACING COMMISSION 604 660 7414 TO 95889020 P.06/08

Pacific Racing Association EXHIBIT "D

Note to the Financial Information *

December 31,1997

1. The Horse Racing Tax Ad Regulation 5(2) and section 4 of the Horse Racing Tax Act requires that
the British Columbia Racing Commission ('the Commission") make grants for the purpose of
establishing or improving horse racing facilities in British Columbia. The Act and Regulation do not
define which expenditures qualify. The Commission's interpretation of the Act $r\6 Regulation is
thai all amounts expended on horse racing facilities which are capital assets in accordance with
generally accepted accounting principles are qualifying expenditures. The Commission also
considers any amounts used to purchase sinking fund investments for the repayment of loans
originally used to purchase capital assets for the horse racing facilities to be qualifying
expenditures. Any interest paid on the aforementioned loans is also considered to be a quallfvino
expenditure by the Commission.
 28 1999 12:53 FR BC RACING COMMISSION 604 660 7414 TO 95889O20 P.07/08

E X H I B I T
~

gpmparis on of Research and Facilities Funding from the BCRC to Expenditures
made bv the PRA o" Establishing or Improving Horse Racing Facilities In British Columbia

For 11 - n.?rlod April 13. 1904 to December 31.1997

(Unaudited - See Notice to Reader)

Total
1224 m& I S i fi 1SSZ Cumulative

To t a l Expenditures (Schedule) 5<2>/

Funding 722,458 1 , 11 4 , 7 8 7 1'.701,968 2,195,453 5.734,655-

Fv- ? ffiftf ncy) 3.2.

Notes:

1) The schedule was prepared on an accrual basis

2) The funding does not include additional payment made to the PRA on May 2,1995 in the amount of 5140,500
3) Calendar 1994 includes the period from April 13,1994 to December 31.1994
&) The schedule dudes "R & F Interior" payments totaling for the period April 13.1994 to December 31,1997
S'.T-/

NOTICE TO READERS
" WE HAVE COMPILEDTHIS STATEMENTFROM INFORMATION PROVIDED BY
MANAGEMENT.WEHAVENOTAUDITED,REVIEWEDOROTHERWISEATTEMPTED
TOVERIFYTHEACCURACYORCOMPLETENESSOFSUCHINFORMATION.
READERS ARE CAUTIONED THAT THIS STATEMENT MAY NOT BE APPROPRIATE NOTICt TO RAOR
FOR THEIR PURPOSES." Surrey B.C. March 31. 1999. tymm?^
MACKAY & PARTNERS, GlV'y:S^'iV--*'V^.7-V- ? -,'-'-."-'.' .. -
chartered accountants of rrccN fafonnsiicn. F.ccc'srs s;,' c-i!.
s!ai-:rr..ir.!n-:..-vnc'bc.cor.Tcprii,.o .'c: ^.-Z
SURFcYn.C. ft-VC:'
 TUN 28 1999 12=54 FR BC RACING COMMISSION 604 660 7414 TO 95889020 F,08/0S

EXHIBIT D"
LtL:2ulc silSUiSnmitSS by the PRA on FstaPlfrhlnt. or imnroYing Hw rMm
-., I- British Columbia

. -.'..;.: fc.ee ^oice to Reader)

1224 ms iaae ,1997

Capital Expenditures (per PRA schedule) r a/

L ess: Expendi^s funded by B.C. Government Loans (note 1) (2.026,200) 0 o 0

NetCspila; ' iditures

5 , 11
Sinking Fund ;.... snts per terms of loans
witn h C Govt"rnmant l 0 285.718 386.237 386,237

Inlereo, per lermt, y! loons with B.C.

Government aA __
80.458 320.994 485.334 485,334
Total ExpendituiKS
-,:/ i

Note:
1) Certain or the - - capital expenditures per the PRA's schedule
were funded b . ,.v,men! loans. Th total amount has been deducted
from the 1994 W; oi expenditures as a breakdown between the years is not
readily avails Die.

NOTICE TO READERS
" WE have compiled this statement from information PROVIDED BY
MANAGEMENT. WE HAVE NOT AUDITED, REVIEWED OR OTHERWISE ATTEMPTED
TO VERIFY THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION.
' READERS ARE CAUTIONED THAT THIS STATEMENT MAY NOT BE APPROPRIATE
FOR THEIR PURPOSES." Surrey B.C. March 31, 1999.
MACKAY & PARTNERS,
CHARTEREDACCOUNTANTS

... . rvO'iiCi 10
We have cwn?a?jj {his stetcrr-e,
by manager-cii. Wc '-..-.v.- r,
othef,-,jo cnsT.^d: i
oJ such fnfoi,T.sj;;(
statem&ni rr.>-not be ;.-
SURREY B.C. .;
*-n**.iu 3Mg<^
 E X H I B I T E

Information and Privacy Commissioner,

4th. Floor, 1675 Douglas Street,
Victoria, BC.
V8V 1X4

July 14, 1999 BY FAX: 250-387-1696

Dear Sir,
re: Freedom of Information Request
Reference # Info 99/1
British Columbia Racing Commission
I r e s p e c t f u l l y r e q u e s t t h a t t h e O f fi c e o f t h e I n f o r m a t i o n a n d
Privacy Commissioner review my application to the BC Racing
Commission for access to information under the Freedom of
Information and Protection of Privacy Act, details of which are set
out herein.
In response to an enquiry made on October 5, 1998 (see attached) to
the BC Racing Commission regarding their payment of grant monies to
the Pacific Racing Association (PRA), a response dated February 18,
1999 (see attached) was received from the Chair of the BC Racing
Commission, Mrs. Lorna Romilly, stating that "...an independent
audit (had been) completed recently on a four year period on the
schedule of expenditures by the PRA (of grant monies received)....
and "We are satisfied that they (the PRA) have spent the grants in
accordance with the terms as set out in the the Act and Regulations
(Horse Racing Tax Act)."
My letter dated May 6, 1999 to the BC Racing Commission (see
attached) noted the advice that an independent 4 year audit had
been completed of the PRA schedule of their expenditures of grant
monies and contained a request to the BC Racing Commission under
the Freedom of Information and Privacy Act for access to the 4 year
period "schedule of PRA grant expenditures" referred to in the BC
Racing Commission's letter to me dated February 18, 1999.
A response to my request for access to information was received
from the BC Racing Commission on May 28, 1999 , advising that third
party businesses may be affected by disclosure and a 30 day period
was needed to allow a response to my request (see attached).
In their subsequent letter to me dated June 28, 1999 the BC Racing
Commission advised me the PRA did not wish the requested
information to be disclosed, and supplied severed information which
(in their view) met the three-part harms test under Section 21 of
the Freedom of Information and Protection of Privacy Act (see
attached).
 EXHIBIT "E

-2-

My request for review is based upon the following:

1 . The BC Racing Commission Horse Racing Improvement Fund (HRIF)
receives from the Provincial Government a proportion of all tax
collected on pari-mutuel bets made in B.C. The HRIF is used to fund
several programmes designed to benefit the B.C. horse industry. One
such programme is the Research and Facilities Fund (R & F) to which
the BC Racing Commission makes grants to be used for the upgrading
of facilities, conducting research and for activities designed to
i n c r e a s e a t t e n d a n c e a n d r e v e n u e . T h e p r i n c i p a l b e n e fi c i a r y o f t h i s
programme is the Pacific Racing Association (PRA). Between 1995 -
1998 the PRA has received over $7.5 million in grants from the BC
Racing Commission via the R & F Fund. The PRA is a registered non
p r o fi t s o c i e t y i n B . C . a n d s h o u l d b e r e q u i r e d t o m a k e f u l l a n d
complete disclosure of disbursement of grant monies received from
the BC Racing Commission, a reporting Agency of the Provincial
Government. This information should be readily available to the
public, whose pari-mutuel taxes are the sole source of government
funds paid to the BC Racing Commission.
In reply to my request for a copy of the 4 year audit of the
schedule PRA grant expenditures, the BC Racing Commission by letter
of June 28, 1999 provided a severed copy of the requested
information, "... which (in their view) met the three-part harms
test under Section 21 of the Freedom of Information and Protection
of Privacy Act."

The 1996 BC Racing Commission Annual Report states that, "...the BC

Racing Commission was established by the provincial government to
govern, direct, control and regulate horse racing in the province.
Is responsible for ensuring a high standard of integrity in
t h o r o u g h b r e d r a c i n g t h e r e b y m a i n t a i n i n g t h e c o n fi d e n c e o f t h e
b e t t i n g p u b l i c i n t h e i n d u s t r y. "
I submit to the Commissioner that the basis upon which grant monies
from the Horse Race Improvement Fund, Research and Facilities
Programe are paid to the PRA, requires that the PRA make a full
disclosure of expenditures of grant monies so received.

2. By letter dated March 18, 1999 I was advised by the BC Racing

Commission as follows, "The Commission tracks the funds to be spent
o n " r e s e a r c h a n d f a c i l i t i e s " g r a n t e d t o t h e P a c i fi c R a c i n g
Association "We have had an independent audit completed
recently on a four year period on the schedule of expenditures by
t h e P R A " " W e a r e s a t i s fi e d t h a t t h e y ( P R A ) h a v e s p e n t t h e
grants in accordance with the terms as set out in the Act and
Regulations."
 EXHIBIT "E

-3-

The aforementioned extracts from the BC Racing Commission March 18

letter represent material misstatement. No four year audit was
carried out.

(i) An auditors report on a PRA Schedule of

Expenditures on Establishing or Improving Horse
Racing Facilities in British Columbia for the year
ending December 31, 1997 was submitted by Messrs.
Mackay and Partners to the Commissioners of the BC
Racing Commission on November 12, 1998.
A severed copy of this report was forwarded to
B.R.Hayes.

Note:B.R.Hayes initial enquiry to the BC Racing

Commission regarding grant monies was made on
October 5, 1998.

(ii) Attached to the report referred to in (i)

above were the following:

a) An UNAUDITED comparison of Research and

Facilities Funding from the BC Racing
Commission made by the PRA period April 13,
1994 - December 31, 1997.

b) An UNAUDITED Schedule of Expenditures by the

PRA on Establishing or Improving Horse Racing
Facilities in B.C. Period 1994-1997.

B.R.Hayes received severed copies of reports

set out in (ii) a) and b) above.

Note: The following disclaimer by Messrs.

Mackay and Partners dated March 31, 1999 was
made with regard to (ii) a) and b) above:

"We have compiled this statement from

information provided by management. We have not
audited, reviewed or otherwise attempted to
verify the accuracy or completness of such
information. Readers are cautioned that this
statement may not be appropriate for their
purposes." SURREY B.C. March 31, 1999.
 EXHIBIT E"

-4-

3. The BC Racing Commission is under the direction of the

Minister of Employment and Investment, the Honourable Michael
Famworth. The following is an extract from the draft transcript of
the Ministry of Employment and Investment and Ministry Responsible
for Housing Estimates debate of the B.C. Legislature: 3rd Session,
36th Parliament on June 21, 1999.

Q. S.HAWKINS: I just have a couple of questions on the Pacific

Racing Association which is the not-for-profit that
runs Hastings Park. What's the total amount of
government grants, if there have been any, to the
Pacific Racing Association?
A. HON. M. FARNWORTH: They receive about $1.2 million a year from
the research and facilities fund.

Q. S.HAWKINS: Does the government monitor how they spend that

money? When was the last audit done on the PRA?
A. HON. M. FARNWORTH: An internal audit has just been completed,
and it was done by Mackay and Partners.

Q. S.HAWKINS: What was the purpose of that audit? What instigated

that audit?
A. HON. M.FARNWORTH: It's a regular audit done to ensure that the
$1.2 million is spent the way it's supposed to be
spent.
Q. S.HAWKINS: Is the Pacific Racing Association audited annually?
A. HON. M. FARNWORTH: Yes, they are audited annually, and their
fiscal year runs from January to December.

Q. S.HAWKINS: Will the results of the recent audit be made public?

A. HON. M. FARNWORTH: Yes.

(i) In 1997 the PRA received $2.2 million and in 1998 in excess of
$2.4 million from the Research and Facilities Fund,
(cf: above statement by the Hon. Minister Famworth)
(ii) B.R.Hayes has been provided only meaningless and severed
UNAUDITED auditors statements in respect of expenditures made by
the PRA of Research and Facilities grant monies.
I submit to the Commissioner that the Hon. Minister M. Famworth
should direct the BC Racing Commission to release complete details
of review and audit carried out by Mackay & Partners in respect of
PRA expenditures of Research and Facilities Fund grant monies.
 EXHIBIT "E

-5-

T h e P a c i fi c R a c i n g A s s o c i a t i o n , o r i g i n a l l y s e t u p a s a C r o w n
C o r p o r a t i o n , c o n v e r t e d t o a B C n o n - p r o fi t a s s o c i a t i o n i n J a n u a r y
1 9 9 6 . A t t h a t t i m e i t w a s t h e b e n e fi c i a r y o f i n t e r e s t b e a r i n g
Province of B.C. Loans exceeding $6.2 million dollars, which are
repayable in annual sinking fund instalments.
The B.C.Horse Racing Tax Act and Regulations allow for the Horse
Racing Improvement Fund, Research and Facilities grant monies to be
used for the repayment of the Province of B.C. Loans. It is
interesting to note in 1998 the PRA received additional Research
and Facilities grants totalling $2.4 million dollars, yet in spite
of these grants the PRA was unable, or unwilling, to meet the
contracted annual repayment terms of its Province of B.C.Loans.

As stated earlier, the creation of the government inspired PRA was

to nurture and develop live horse racing and breeding industries
within the province of B.C. Since the advent of the PRA there has
been a most dramatic decline in pari-mutuel wagering on the live
racing product in B.C., with 1999 likely to record the lowest
annual wagering on live racing in the history of Hastings Park
racetrack.

The current state of the B.C. racing industry calls for a most
careful, perhaps even a forensic, analysis of the PRA expenditures
of over $7.5 million tax payer generated dollars provided by the
Provincial Government through the Horse Race Improvement Fund,
Research and Facilities program.

It is untenable that the PRA should attempt to avoid full and

detailed disclosure of its expenditures of the substantial
government grant monies received. Such avoidance does not sit well
with the responsibility of the BC Racing Commission, " for
ensuring a high standard of integrity in thoroughbred racing
t h e r e b y m a i n t a i n i n g t h e c o n fi d e n c e o f t h e b e t t i n g p u b l i c i n t h e
i n d u s t r y. " ( B C R a c i n g C o m m i s s i o n A n n u a l R e p o r t 1 9 9 6 ) . A f t e r a l l i t
is the dollars of the betting public which keep the BC Racing
Commission in business.

I respectfully request a review by the Commissioner of my formal

request for access to records, made by letter dated May 6, 1999 to
the BC Racing Commission for access to information under the
Freedom of Information and Protection of Privacy Act.

Yo u r s t r u l y,

Brian R. Hayes
ends. 15275, 93A Avenue,
Surrey, BC. V3R 0E6
Te l : 6 0 4 - 5 8 8 - 3 7 9 3
Fax:604-588-9020
 .AJP E> EJSTDIX

1998/99 Legislative Session: 3rd Session, 36th Parliament

This is a DRAFT TRANSCRIPT ONLY of debate in one sitting of the Legislative Assembly of British
Columbia. This transcript is subject to corrections, and will be replaced by the final, official Hansard report
within 46 hours. Use of this transcript, othor than in the legislative- precinct, is not protected by
parliamentary privilege, and public attribution of any of the debate as transcribed here could entail legal
liability.

June 21st, 1999

ESTIMATES: MINISTRY OF EMPLOYMENT

AND INVESTMENT AND
MINISTRY RESPONSIBLE FOR HOUSING
(continued)

S. Hawldas: The ministry is supposed to have completed a review of horse racing

in the p ace around the industry. I'm wondering what the status of this
review is and when it is estimated that it might be released.

Hon. Mr Famworth: They're currently in the process of completing the review

and hope to deliver it to me shortly.

S. Hftwkins! I think th he minister knows that there's a lot of concerns around

the horse-rac ng indusLy and certain'y my colleagues have been contacted by
many people involved in the Iw icing industry who are concerned about the
future of the industry in the pK . . je. I wonder if the minister can first provide
some statistical information on the iecjinejELthe number of live racing d*ys rv*
_the pjist ssy^rjiyeajtx-and what is the explanation, if the government has w f -
this decline?

Hon M" ^arnworthi We don't have the exact numbers with us. We car. . - hat
fc: u :. member. But it is an issue that is not just unique to Vancoi <
" 'i> . me that is taking place on a Norlh America-wide trend and > :
nttmbar of factors, not the least of which is that there is a wider aj. '
.rtainment dollar these days. Also, there is a significant char. = c .;. :ne ot &,
activities at racing tracks ir ?hat there's now much rr.ore off-track beumr ^ you
know.. For example, inA'ancoavcr you can bei it. Hong Kong, and thai has had
animpact on the live handle betting at a racetrack.
S- Hawkins." Can the minister tel " " what the total amount is that governme:.;
q ' s ro the horse-racin p indusu*"
Hon. M, Famworth: There are no grants, but there's a tax rebate of about $3-5__
million.

S. Hawkins: Can the minister tell me if this is increasing or decreasing year over
year?

Hon. M. Earn worth : It's stable, but it decreases as me live_han_dle goes down. It's
one of the issues that I am concerned about. I mean, the member raises the issue
around racing, and she's been contacted by lots of people. I have as well. It's no
secret that I like the horse-racing industry. I'm a fan of the horse-racing industry,
and so T'm very interested in trvingJo ensure its long-term future^

S. Hawkins: Are the rebates..,? What are they contingent on? Can the minister
explain? If they're not grants, they're rebates. Can he explain how one gets them
back gets the tax rebate?

Hon. M, Famworth: There's a 7 percent tax that is collected on all wagering.

Depending on the type of racing, there's a different breakdown, and I'll give them.
For example, live racing at the track where the actual horse is running.... Let's say
a horse named Blushing Hector, for example, was running in a race.

Interjection,

Hon. M. Famworth: That's a good name for a horse, exactly. And let's say that
people bet on this horse named Blushing Hector. Let's say a minister bet oh, I
don't know, over the course of a season $700 on a horse named Blushing
Hector. I'd say that what would happen is that there would be a 7 percent tax paid
on that, Three percent would go to the provincial government, and 4 percent
would go to the British Columbia Racing Commission. That assumes that the
horse is running, and that the horse wins. But if the horse doesn't win, nobody
makes any money.

Now, if the same person took that money and wagered it on a horse in Hong Kong,
let's say, or the Kentucky Derby, and won you know, Charismatic..,. You b?t
yourself $100 on a horse named Charismatic, a long shot, but the government
would retain 2 percent of that 7 percent tax and 5 percent would go to the British
Columbia Racing Commission. Then if you bet the same money on a simulcast on
another locati-m.. then 1 percent would go to government and 6 percent would go
to the British Columbia Racing Commission.
J
S. Hawkins: I was trying to decide if the minister was talking about a minister of
the Crown or a minister of the cloth, but I'll leave that to everybody's imagination
here.

Can the minister tell me...? Does everybody in the horse racing industry, then,
that's involved in this receive the rebate? I guess I need that explained, because
unlike the minister, I know very little about this industry,

Hon. M. Famworth: It goes to the British Columbia Racing Commission as

opposed to the individual horse owners, and it's broken down into two funds: the
horse racing improvement fund and a research and facilities fund.

S. Hawkins: Who accesses these funds? Do people in the industry then apply for
grants through these funds?

Hon. M, Famworth: In terms of the research and facilities fund,.the associations^

to improve mejacilitisg.get to access those funds. On the HRIF, which is the horse
racing improvement fund.... Let's say that this horse that I talked about, called
Blushing Hector, won a race. Right?
R, Thorpe: Everyone would be pleased then, wouldn't they?

Hon. M. Famworth: I think, you know.,., Then it would be able to access this
fund. But jfglnshing Hector doesn't win a race, then he can't access this fund.,

S* Hawkins: So Blushing Hector can't improve unless he actually wins. I don't

know.... I guess that leads to my next question. How are the grant amounts
determined, then? Is that the only determination from the horse racing
improvement fund that if the horse wins, then the owner can access that fund?
And for the other fund: can the minister tell me how the grants from that fund are
determined?

Hon. M. Famworth: In both those cases, there are formulas. I would be happy to
brief the member on how those formulas work.

S. Hawkins: I would appreciate having a breakdown of their criteria and how that
! works. How does the government, through the Racing Commission, ensure that
' the grants are spent as they're supposed to be spent?

{ Hon. M. Famworth: They're audited by a private auditor.

S. Hawkins: Tm sure he can read my mind. Who's the auditor? How often is it
done, and at what cost?
Hon. M. Famworth: ^m^Ji^ndJLatdiffi^Qn a five-year proposal. They're done
through the comptroller general, and the audits take place annually.

S. Hawkins: Have there ever been compliance audits done to ensure that the
money is being spent...? Well, yes, there are compliance audits on it; that's what
you're doing. When you find a problem, how is that dealt with?

Hon. M. Famworth: There's an outside financial consultant who presents the

reports to the Racing Commission, and then they're dealt with,

S. Hawkins: What is the budget of the Racing Commission, and what percentage
ort^sjs^minis^tivecosls?
Hon. M. Famworth: It's a $1,000 vote.

S. Hawkins: Did the minister say a $1,000 vote?

Hon. M. Famworth: Yeah.

The Chair: Through the Chair.

S. Hawkins: I don't know what that means.

Hon. M. Famworth: It returns all the costs of running the cornmission back to
the minister, with the exception of $1,000.

S. Hawkins: Does the Racing Commission get complaints? How many do they
get say, over the pasi year? Do they keep track of how many complaints they
got? Can the minister, with his staff, just tell me what kinds of complaints they're
dealing with? And has Blushing Hector ever won?

Hon. M. Famworth: I can get the number of complaints for the hon. member.
But certainly I'm sure that there are people who, if they have not raised
complaints, might want to raise complaints around ahorse say, BI ashing
Hector. But far be it from me to be one of those.

S. Hawkins: Can the minister give me a flavour of the kinds of co Mb"

Racing Commission gets, and how they're investigated? Because * 'Vt i.1 ft '(">.
briefing, I'm looking for some information on the process.
A Voice: Did you get any briefmg on this ministry?
 S, Hawkins: I got no briefing on this one either. I just want to know how they deal
i :th complaints, what kind of complaints and how much of their time they spend
baling with this. What, if any, remedial notion has the Horse Racing Commission
u-ken as a result of these complaints7

Hon. M% Famworth: There are about half a dozen complaints a year. That's all.
They're dealt with in writing, and they can range from not being able to get to the
wicket in time to place a bet to: how come that damn Blushing Hector hasn't won a
race yet? There are investigators who will look into it, and they're dealt with in
writing. There are about half a dozen complaints a year.
S. Hawkins: Do the complaints have to be in writing before the commission will
deal with them?

Hon. M. Famworth: Yes.

S. Hawkins: Well, that answers my next question, because I was going to ask:
how come only six complaints? We seem to have had more than six complaints on
this side of the House about what's happening in the industry.

Hon. M- Famworth: Sigffare in a position to deal with most, as I would suspect

injnoAUmsinesses. You have staff able to deal with complaints in a way that they
don't have to get to a position where they need to be investigated thoroughly.

S. Hawkins: Are there policies around taking ir. lints ar ' * mvestigative
action that follows and how it's remediated? If U. m9 can the .unister et me
that?

Hon. M. Famworth: Yes, we do; and yes, we will.

S. Hawkins: Does the Horse Racing Commission have a policy position on slot
machines at the racetracks?

Hon, M. Famworth: No, they don't- In fact, the issue of slot machines at
racetracks would be something for the city of Vancouver, because the lease
prohibits slot machines at the racetrack.
S. Hawkins: I just have a couple of questions on the Pacific Racing Association,
which is the not-for-profit that runs Hastings Park, What's the total amount o_f
joyenmigt^grants? if mere jiaxeJa^aAY, to the Pacific Racing Association?
Hon. M. Famworth:J3iexreceive about $1.2 million a year from the research
\ and facilities fund. ~"~ """~~
 3. Hawkins: Does the government monitor how they spend that money? When
was the last audit done on the PRA?
k Hon. M. Famworth: An internal audit has just been completed, and it wasdone
by McKaj^jmjlEartners.

S. Hawkins: Whatwas the purpose of that audit? Whatjnstigated that audit?

Hon. Mt Farnworth: it's a regular audit done tqerjsjirjiiihat^ is

spentthe wayit'is supposed to be spent.
S. Hawkins: Is the Pacific Racing Association audited annually?

Hon. M. Famworth: Yes, they are audited annually, and their fiscal year runs
from January to December.

S< Hawkins: Will the results of the recent audit be made public?

Hon. M* Famworth: Yes.

S. Hawkins: When?

Interjection.
S, Hawkins: I'll expect a copy of thy dit from the ministry.

The Pacific Racing Association also received, I believe, a $6.5 mV^n loan from
the government. How much of this loan has been paid back to date. u any part of
thejoanjn^de' uit? ~'
Hon. M. Famworth: It is not in default, but we are looking at restructuring the
loan.

S. Hawkins: It's not in default, but you're looking at restructuring, Is it because

they have difficulty paying it back?
Hon. M. Famworth: They requestedajonger period to pay it back andjo
restructure it accordingly. We are looking^ at doing that.

S. Hawkins: Three questions: at what interest rate will thev be paying it back,
hc^^rjiuciij^^y^rjlue, and how much is left on the loan?

6
 lion. M, Famworth: We can get the exact figures for you.

S. Hawkins: I would appreciate that.

r Can the minister just refresh my memory? When exactly did they receive that $6.5
million loan?
r
Hon. M. Famworth: That would have been about 1993.

r D. Symons: I'm wondering if the minister might tell me whether the Pacific
Racing Commission vets or applications come to them for the opening of
new racetracks, I'm thinking particularly of one that's been proposed for
F Richmond. Do they come before the minister for consideration? Or how are these
handled when people come up with a grandiose idea of a racetrack or whatever?

Hon. M. Famworth; They have c<?me io_me. I said there's really no point in
a^maching
where it's at..the province without the support of the city of Richmw So ^

D. Symons: There are other locations around the lower mainland also where I
think there's been talk in the past, Colony Farm and other areas that have been
considered for moving of the racetrack from Exhibition Park. I'm wondering if the
minister might be able to give me an idea of how many applications he might have
seen m the last five years not applications, but these proposals for racetracks
Richmond is one, and I think Colony Farm was another a few years back.

Hon. M FarnworthU^jje^^ never

*$&&& single application. There is just a lot of rumour and specul s;' 17 s we
ail^~**^^ >^odv

-r ^a c^ e^t P
r a^c e
ki^^ t h ewr iel, l n be-

7
 SEP 29 1999 13=57 FR EC RACING COMMISSION 604 660 7414 TO 95889020 P.02/08

^British
Columbia
September 29,1999

VIA FAX (604) 588-9020

Mr. Brian Hayes

15275 93A Avenue
Surrey, B.C. V3R 0E6
Dear Mr. Hayes,

Re: Freedom of Information Request

Reference #Info 99/1

The Racing Commission has today received notification from the Pacific Racing
Association, the third party in this matter, advising that after further review it has
decided to consent to the release of the record which was previously provided to
you in severed form only.

The Racing Commission has been informed that this consent is provided under s.
21 (3)(a) of the Freedom of Information and Protection of Privacy Act and is given
without prejudice to any position the Pacific Racing Association might take in
respect of other access requests under the Act.

In view of the consent of the Pacific Racing Association, a copy of the disputed
record is now enclosed in unsevered form, and the Office of the Information and
Privacy Commissioner is being informed that there is no longer any reason for the
scheduled written inquiry under the Act to proceed.

Yours trul

L. Horton
Director of Racing
Attachment

Pacific Racing Association

Office of the Information and Privacy Commissioner

M i n i s t r y o f B r i t i s h C o l u m b i a M a i l i n g A d d r e s s : Te l e p h o n e ; ( 6 0 4 ) 6 6 0 - 7 4 0 0
Labour Racing Commission Suite 2003 Metrotower II Facsimile: (604)660-7414
4720 Kingsway
Burnaby BC V5H 4N2

9
10/05/99 TUE 13:45 FAX 604 251 0411 PACIFIC RACING ASSN. 0001

R A C E C O U R S E

EBESS RELEASE COVER LETTER

DATE:
TO: Timothy Renshaw

FAX: (604)985-3227

COMPANY: North Shore News

FROM: Brian Pound, Director of Media Relations

RE:

TOTAL NUMBER OF PAGES (including cover letter):

Please call if you did not receive all indicated pages at: (604)254-1631

SIGNATURE:

H a s t i n g s P a r k R a c e c o u r s e Va n c o u v e r B C V 5 K 3 N 8
Te l e p h o n e ( 6 0 4 ) 2 5 4 - 1 6 3 1 F a x ( 6 0 4 ) 2 5 1 - 0 4 1 1
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10/05/99 TUE 13:45 FAX 604 251 0 4 11 PA C I F I C RACING ASSN. 0002

Horse Racing Alliance of

British Columbia

PKWS TCBIG85G
For Immediate Release
Octobers. 1999

Alliance Calls for Urgent Action to Save B.C.'s

Horse Racing Indushy

"Government must act quickly on key recommendations in its horse raping report if
the racing Industry Is to survive and prosper In the next century0, said Colin
Gabelmann of the Home Racing Alliance.

There are 7,000 full-time Jobs, hundreds of farms and millions of dollars in economic
spin-off at stake", he said.
The Provincial Government released the long awaited report September 24th. Its key
recommendations call for the industry to be on the same footing as other gaming
sectors in the province, elimination of the pari-mutuel tax on wagering and
implementation of slot machines at tracks to pay for facility improvements.
Minister responsible for gaming Joan Smallwood said she wants feedback on the
report from industry stakeholders and the public but has already ruled out slot
machines.

'The Minister's position on slot machines reverses a commitment made by the

previous gaming minister and now Premier Dan Miller0, Gabelmann said, the
thousands of men and women whose jobs depend on horse racing are angry the
government has broken a major promise to the industry.
Chuck Keeling of the Alliance said although the Minister said no to slots he is
cautiously optimistic ether measures will be taken to address industry concerns.
10/05/99 TUE 13:45 FAX 604 251 0 4 11 PA C I F I C RACING ASSN. 0003

'The money that would have come from slots was significant', Keeling said, "we are
anxious to discuss with her these other means by which the industry can effectively
compete."
Gabelmann noted B.C. is now alone among major tracks in Canada without slots.
Other provinces like Alberta and Ontario use those monies to Improve f aciities and
boost purses (the amount paid to winning horses). A number of B.C. owners have
already left the province, drawn by higher purses elsewhere. Gabelmann said that
trend will continue unless government gives the industry the tools to compete. He
also said that B.C. remains the only province in Canada where government taxes
racing wagers.
The industry in B.C. will be destroyed unless the provincial and municipal
governments allow us to compete with other provinces", Gabelmann said
The Horse Racing Alliance of B.C. Is an umbrella group which represents all key
stakeholders in the racing industry. Besides employing 7,000 people full-time, the
industry sustains about 50,000 acres of agricultural land supporting over 15,000
horses. Direct expenditures exceed $50 million and the induced benefits of the
Industry are almost $550 million.
There Is no doubt the governmentss gaming expansion program has hurt our
industry", Keeling said," that is why I believe the previous Minister Dan Miller
promised slots to offset the damage. The government has already moved to protect
bingo and charities. Horse racing remains the only sector not addressed by the
government's gaming policy". The economic benefits gained from racing are greater
than any other form of gaming Keeling said.

-30-

Contact: Michael McEvoy

Horse Racing Alliance of B.C. (250) 382-9396

10/05/99 TUE 13:46 FAX 604 251 0411 PACIFIC RACING ASSN, 111004

Horse Racing .Alliance of

British Columbia

The Horse Racing Alliance of B.C. was founded in 1996 to advance the Interests of
the horse racing industry with government and the public. If s members are; the
Canadian Thoroughbred Horse Society, B.C. Division, B.C. Standardbred
Association, Orangeville Raceway Ltd., the Horsemen's Benevolent Protective
Association, the Pacific Racing Association, the B.C. Standardbred Breeders'
Society.

In 1997 the Alliance, with the technical assistance of the Ministry of Agriculture
determined the economic impact of the horse racing industry to be as follows;

Direct and indirect full-time equivalent jobs 6,948

Induced Jobs 5.613

Total of direct, indirect and induced Jobs 12,561

Direct taxes paid to government (excluding municipalities) $15.3 million

Direct expenditures and payments to suppliers $52.7 million

Total economic Impact Including direct, indirect and

induced expenditures $549.14 million

Horses supported by racing 15,600

Horse farms related to Industry 1.100
Acres of agricultural land dedicated to horse racing 50.060

Examples of racetracks in Canada with slot machines or VLTs Include, Northlands

Park (Edmonton), Asslnfboia Downs (Winnipeg) and Woodbine (Toronto).
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 PRESS RELEASE
OSOYOOS, B.C.
MONDAY, DECEMBER 21 ST. 1998

"DESERT PARK ON TRACK 2000"

Osoyoos Town Council and a group headed by businessman Brian Hayes have
recently reached an "approval in principle" regarding the operation,
management and development of the Desert Park Racetrack facility in
Osoyoos, B.C.

The agreement calls for the parties to enter a Partnering Agreement and a
long term lease to enable the development of Desert Park as an agri-tourist
entertainment centre, where the core activity of annual festival days of
horse racing will be protected and augmented by a year round programme of
events in an upgraded facility.

Horse racing in the B.C. interior has suffered serious decline in recent
years due, in part, to increased competition for the leisure dollar, poor
economy and expanded gaming options. The determining factor of the new
Desert Park proposal is the approval by the B.C Gaming Secretariat for the
installation of up to 300 slot machines at the racetrack.

Osoyoos Town Council, in supporting the Hayes' group proposal, is answering

the call of B.C. Minister Mike Farnworth for municipalities/townships to
approve the installation of slot machines at B.C. racetracks in an effort
t o s a v e a n a i l i n g i n d u s t r y, p r o t e c t t h o u s a n d s o f j o b s t h r o u g h o u t t h e
province and ensure the sport remains an attraction on the B.C. $9 billion
a year tourist calendar.

"Racetracks for centuries have been accepted and recognised by the public
as most suitable locations for gaming. I believe Minister Famworth1 s
racetrack policy represents a morally acceptable level of gaming and the
support and encouragement of Mayor John Cooper and Town Council for our
proposal is a terrific example of how local government is able to work
effectively with the private sector to the benefit of the community", said
Epsom born Englishman Hayes whose family has a long association with the
r a c i n g i n d u s t r y.

"Compliance with the numerous approvals called for by Council in the Desert
Park Partnering Agreement will take 4-6 months. Our Christmas "approval in
principle" wish for slots at the track, the first and most vital step in
this process, will be forwarded to the B.C. Gaming Secretariat tomorrow.
Slots installation at Desert Park Racetrack would make it the closest B.C.
gaming site to the U.S. border - and much needed U.S. tourist dollars,"
continued Hayes who will be in Osoyoos on Monday, January 18th. to present
to the local media the promotional logo DESERT PARK - ON TRACK 2000. "A
WORLD OF DIFFERENCE", together with additional proposal details. Venue and
time of meeting to be advised.

Contact: Brian R. Hayes

Tel: 604-588-3793
Fax: 604-588-9020
 DESERT PARK RACETRACK
Development Proposal
ON TRACK 2000 - "A WORLD OF DIFFERENCE"

BACKGROUND

Desert Park Racetrack is part of a B.C. interior network which has

struggled to survive in recent years. In 1998 the 4-track network
delivered a total of less than 20 days of live racing. Revenues were down,
attendances poor and race programmes offered becoming less attractive to
both horsemen and fans. The invaluable support given the interior by the
B.C. Racing Commission has been an industry lifesaver.

This situation is neither unique to Desert Park nor B.C.. Across North
America the thoroughbred racing industry has been unable to withstand the
increased activity of state/province run lottery corporations and
expansion of gaming options.

Racing has survived primarily due to tax relief offered by Governments. In

1998, the B.C. Government will return to the sport over $7 million dollars
through the Horse Race Improvement Fund. The Desert Park operation
received some $21,000+ from this fund towards the cost of its 1998
live/teletheatre racing programme. The Government already returns to the
industry over 4% of the 7% collected from pari-mutuel wagering. The well
for further tax relief is running dry.

The demise of many track operations has been their failure or inability to
address in a timely manner programme content, new product development and
added value activities for the public which have sustainable potential.
Coupled with unstructured marketing strategies and the complexity of
customer loyalty in a modern retailing environment, this has led to a
fading recognition of the sport in today's public entertainment arena, and
created the wasteland of racing.

Osoyoos Town Council is cognisant of the need for change at the Desert
P a r k f a c i l i t y. To b u i l d d o l l a r v o l u m e w h i l s t r e s p e c t i n g s o c i a l a n d
environmental priorities will require site development and re-packaging of
the existing racing and equestrian product. Changes designed to capitalize
on gaming options open to the racing industry, embracing the latest
communications technology and establishing strategic alliances enabling
the Desert Park product to compete effectively in the Okanagan
entertainment/tourism markets.

The challenge facing the operator of Desert Park will be the systematic
implementation of a specific plan which is consistent with locally adopted
plans and policies. A plan which will stimulate the local economy whilst
maintaining a community focus.

In an industry which is a dictatorship of numbers, the Desert Park racing

wheel of fortune in the Okanagan can only be turned by getting its fans
and the public back ON TRACK 2000.
 -2-

GENERAL CONCEPT

It is proposed that, subject to certain approvals, the Desert Park

facility will undergo a phased development programme to create a unique
adult entertainment centre for the enjoyment of local residents while
providing a major, year round agri-tourist attraction for the Okanagan.

Whilst the core activity will remain equine based, the intent of the
proposal is to make Desert Park a financially viable operation and to help
stimulate the local business and tourist economies.

The first step towards achieving this goal required that Council support
and endorse an application by the proposer to the B.C. Gaming Secretariat
for an APPROVAL IN PRINCIPLE to install 300 slot machines at an improved
D e s e r t P a r k f a c i l i t y.

The application to be in accordance with Government gaming policy which

provides racetrack operators with an opportunity to install a limited
number of slot machines at track locations. This done in an effort to
combat the negative impact which expanded gaming continues to exert on the
B.C. racing industry.

A new, improved site, apart from being the desert home for what should be
"hot slots", will incorporate the introduction of year round teletheatre
racing and construction of an English style hostelry for track visitors.
An indoor games ranch, capable of hosting provincial/international
sponsored competitions and promoted under the banner of "High Five
Osoyoos", will be aimed at producing an influx of competitor groups to the
Osoyoos environs. Such events to include darts, pool, arm wrestling, golf,
etc.. Subject to appropriate licensing approvals, electronic bingo and
Sega electronic horse racing games would form part of the entertainment
programme.

An integral part of the site development plan will be improvement/

extension of the existing track and barn areas to include the introduction
of an apprentice jockey riding academy to be offered to Horsemens"
Associations in Canada and the U.S.A.

Increased on site activity will strengthen the base live horse racing
programme and, with the ability to offer year round training facilities,
it will be targetted over a 5 year period to increase the number of live
Festival Racing days up to 20 each year. Desert Park will have the
opportunity to become the premier interior racetrack in B.C.

Discussions will be instituted with the Horse Council of B.C. to review

the potential of the site to stage jointly sponsored national/regional
equestrian competitions in addition to the principal horse events
c u r r e n t l y o ff e r e d .
 -3-

In consultation with Osoyoos Town Council, all efforts will be made to

incorporate arrangements to satisfy existing site user groups. Providing
such activities would not limit the implementation of the core development
plan.

A policy is to be established of promoting a limited number of high

p r o fi l e c o n c e r t s / f e s t i v a l s o n s p e c i fi c d a t e s e a c h y e a r. A f o r m a t w i t h
sustainable potential, and able to be integrated into an annual Desert
Park Calendar of Events.

The foregoing outline of proposed activities calls for build out,

renovation and possible removal of some existing facilities, subject to
Council approval.

The programme for development will incorporate:

PHASE I Build out up to 20,000 square feet

Estimated completion date early Spring 2000

To include: Slots Saloon

Hostelry
Teletheatre
Residence for Director of Operations
Staff Quarters
Parking Upgrades

PHASE II Build out up to 20,000 square feet

To include: "High Five" Games Ranch

Apprentice Jockey Training Academy
Barns Improvement/Additions

Contact: Brian R. Hayes

Tel: 604-588-3793
Fax: 604-588-9020
 (Millions of Dollars)
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^n f-^ f^ ir^-1 ir^ r ^ C~' E '

Types of Pari-Mutuel Handle

1997
USA

Jai Alai
Horse Racing Greyhound Racing
$2,291,174,034 $251,084,606
$15,220,402,479
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Live Races :: Inter-Track /^ Off-Track/Phone I
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Sources of 1997 Handle on Horse Racing

USA Wagering on Simulcast Races
Total Handle Wagering on Live Races On In-State Races On Out-of-State Races
Handle % of Total Handle % of Total
on Horse Racing Handle % of Total

1 - ,' ' ' ii ... ;.<'*. 4;;?..:" i.

Alabama v , ... . $32,653,338 /
$29,597,942 23% $29,551,070 23% 68.517,907 54%
Arizona 127,666,919
. 67,454,297_, , ' . , , 4 4 % ' , a < ^'v/;84;362,219'' 'fn\'-5%J'',
Arkansas 151.81,6.516^ ,s
673,136,883 29% 1,493.016.296 63% 194,575,631 8%
California 2,360.728,810
Colorado \'55.417;7B8~ 2i77p,889",, P : 5% {{ '!; ' "" ~~ 199,526,008 100%
Connecticut 199,526,008
' " 149,599,168^;*\ .- i - * 3 6 ; 5 1 1 , 2 0 0 ;
Delaware ";"'24%%r.:":'
Florida 733,818,611 282,486,886 38% 301,434,200 41% 149,897,525 20% ^
v* 28,509,502 -. ^ ..... "" 5;435,0d0 ;:;**' ^19^ ->;r- r
yz' 201,208,829"
:ldaho
Illinois 1,180,033,714 17% ~ 352.500,499 30% 626,324,386 53%
{Indiana . '',', 146,956,729 . .;; L .10.912,711 .".' '^n.i%:\ti
19% 37,249,023 81%
Iowa 45,785,177 8,536,154 ' ^ -* r. - T-'it-=vi * "v" *^>* ^t1""! * ""^=r-
* 5% .';: - ^3^3j|;iaS:;ii95%'^^
Kansas 37,346,642 r 2,007,228
609,569,380 199.275,488 33% " 1 2 1 . 11 4 , 3 1 9 2 0 % 289,179,573 47%
Kentucky >*v oic^QT'iRd^fSrr'; tains: u^S'*^
Louisiana 359,866,500 '," ' '; 61,990;774 '.' ; 17%" "?',
72,349,191 9,649.867 13% 2,776,921 4% 59,922,403 83%
Maine
, ,103,323.391 ! ' 19%.-1 V f 7' 38; ,859446^ ,9831' 7
B ^ 4^ %
I3%^v^^
Maryland - 547,688,020 -
Massachusetts 209,729,434 43.130.634 21% ' 158,051,983 75%
*, ^;^"^30p;587^55^^^5>/^,;]
Michigan , ... 474,608,578- 115,065,452 ,.., .,24%,,;,,,
11,343,409 17% '54,675,274 ' 83%
Minnesota 66,018,683
Montana 10,044.878 3,768,877 ' , 3 8% -',
9,433,185 11%"*" 7,228,560 71,603,933 81%
Nebraska 88.265.678
Nevada 502,172,473 . ; - 295.363, T ^ v . ' i
19,353,260 13% Breakdown not available
New Hampshire 154,328.385
' " ' ' 3 3 2 ; 2 Q 9 , 9 2 1 " ..' '"28%" v''.'; 15B;314^25 Jv^f.^*'!^ rr"^r^^^,ftWft33^,iti^i'^tJ
New Jersey 1,207,431,579:' - '
22,181.004' 22% 9,780,114 10% 66.823,856 68%
New Mexico 98.784.974
New York -.-. 2,668,132;211 . . ' : 525,449,031' {. .20H^^j.: -i,264;og?;92j:^ 4 7 % ^ rff t
j n r
^ ^ j . ^ , ^ ^ s ; ^ ; 2 t i ^ l33%^^
North Dakota 6,107,461 68,214 \% 6,039,247 99%
phio, . 600J96,8t6 - ,..' .'.; . 200,939,370,,t -.-,!.. 33%-;v;;
41,742,992 18% 23,742,900 10% 164,431,508 72%
Oklahoma 229,917,400
.Oregon '-' "I'.- '59,907;087 ,~, ,'., - ^ ,7,938,021 .: .' :13%Ji -". ;'-V':?i754,6i5j^ ^5C^i^^^II^^1^:^2^^
141,779,295 \z% " 267,906,106 25% 663,442,106 62% **1
Pennsylvania ~1,073,127,507
.59,857,162 >
Rhode Island , '"-, '","**X,f"f}\ >~jip W?S-#? *: '^5;857;i62^^ ;jbq%;^^' O
253,395 4% 6,703,425' * 96%
South Dakota ""6,956,820
'"' :.-'.r-104,744,934 ,' v i ' - 2 4 % W 1 i?y'^^i!34^9;8q2^4:b^8%kf':
(Texas - \ . A'**^ :- 438,668.039 * v
361,612 83% 73,529 17% Ro
Vermont "435,141
.Virginia; -. .', r-,. * ..,-5/9R094,1Bti- .. ~ : . ^ , A B \ , 3 0 Z > , ,;"",,,,-'. 6J35u^,;,(.,: *i
Washington 172,254,176 62,474,168 36% 41,606,468 24% 68,173,540 40% H
'*h"1Fb':^ ' " * "t l *'.' *i":''*'-iy1""'.^^^:vL."':5:,'Vil,i,':56;jB3;9l9,i^v:60%;^,^I
s
; West Virginia
Wisconsin
931496,630 ,- ."./'. ;' 37,^12,711
54,796,437
'1""-""" ' ***" "" "* " ^ 54,796,437 100%

.Wyoming"-:.,
"' -vv ^10,138,756'" \ ^R^v^po?;^,;,^L"ffli<

Note (1): A small amount of handle is simulcast between in-state tracks, but most simulcast handle is from out-of-state signals. H
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 g-^-T-, r^ r

USA
Pari-Mutuel Handle Live Races ($) 1997 Pari-Mutuel Handle - Inter-Track Wagering ($)
Thoroughbred Quarter Horse Harness Total Thoroughbred Quarter Horse Harness Mixed Iolal
"Alabama -T _ :.*i..t r*32;653,338!
*i:^;ir;32.653;338
Arizona 29.597.942 29,597,942 Included in Off-track Wagering
^Arkansas ^-"-^V^ ", 67,454.297 ;^67j454.297 :K:?V^4.;362,2l9 "84.362.219!
California 570.582,983 41.208.046 20,434,321 40.911.533 ' 673.136.883 Included in Off-Track Wagering
Colorado ~? ;"r"," 2,770,889 fVT; ;vr2,770.889; '- M":Tri,'"'".;r"' ''"'".'X'J: ^TrTIncluded inOrf-Yra^Wagering'';';^ "',">:'' V'.^^r^ri'/':^: ;T''
Connecticut Included in Off-Track Wagering
Delaware .%'" uv ,. T 30,379.849 . . . * ' ^ ' . v r r : i r ^ ' 6 , i 3 r. 3 5 i r - i ' ' Z ^ - ^ z J & ^ & x j s x r & x i ' r;';;;j ^5:7. ':xn'^.iJi^r^i-v- rt.^ v:j ~:^;3i5^i^r^l^3^7.988,:,:-'?'cri13;087l868
Florida 250,714.652 31,772,234 282,486,886 386.909.453 ' "' 64.422.272 " 451.331.725
.Idaho }--'~l //-. - r ^ Tr H i ^ l T ^ v V h Vu ^ , : ^ ' / 5 . H 3 5 i O p o ; ~ r ? ^ X * 5 l 4 3 5 . 0 0 0 *tU~V.- " ' -, r^::r^. . tZi\yi*^j:*\j;^jJ; V., 23.074;502 V;?rH23.074,5p2;
Illinois ^36.155.793 "65.053,636 * '*" ~" 201.208.829 306.772.625' '" ~ 99,852,875 400.625.566
Jndiana"t' r" V;"! . .7-^5.264.793. 3iH?H?nrlt:5.647.918''^ ; ; H "' V^>"r:-5^.l6:9i2;711- i -jj*\*^. -; -^ r .v;-:-. v- _ .^included in Off-Track Wagering r;.Jkl*?r.v;"rrt^r: ti.V:-r*t^^:?.
Iowa 8 , 5 3 6 . 1H^2^l2.007.228.
54 8,536.154 37.249,023 37.249.023
iKansas -VV** ,-* ' -~V?i .*, V. -:.:-r i b^t^^^M^-"'"t',:>*'. -"-\2.007.228
r*"?"--r/,"- '"'^ ^^*^t:?:-J:,ryKr~i:~*c ,^^.^'^-~t,^.33ft4l4'r;,si?^35l339.414J
Kentucky 196,761.930 2.513.558 199.275.488 367.815.483 " 8.212,734 376.028.217
,w 1,57^454,246-^-r^-S^lPH}'1^*-- T-'"-' * '.'4.536;528>~?r;:a,*6I;990.774- . - - . - j 1 2 1 , 8 4 2 , 4 7 2 ^ - ^ - " i f t j r g S f t : i S" ? T
.Louisiana" " * ?- X^lV^.,tl^'^A"'^:2.17t,8767 ^-^124.014,348!
9 6 . 9 4 1 ' " * " 2 6 . 0 1 0 . 6 11 " " 2 6 . 1 0 7 , 5 5 2
Maine 9,649,867 9.649.867
Maryland^ " ' "', -; "84,697,147 .;'; ^18,626,244-,"-'/ ', * if;X'l' f-,^vIJ03.3?3,39f ^/.^ - 314,274,778 ^ *- r^ttr's ^ lT".si51.^S.fi96-.'-j<.v.:^v.j;r.r^,r-",:v^?66,p74,674.
Massachusetts 39.704.839 3.425,795 43,130,634 144.178.858 15.181.754 7,238.188 166.598,800
Michigan,^. * ' " ::'".,39,735.043 -. ,: r:75,043.071? ' '. .* , ^287{338lH;i; ,115.C85,452i r*7v-*:201.401.74Bi? rrb'V-^slirTl 158;1t11.378'"fII':./'' 'C^.a4\, -xrfcSC'359.543.126'
Minnesota 2 5 3 , 2 4 1 11 , 0 9 0 , 1 6 8 11 , 3 4 3 . 4 0 9 51.629,948 299.255 2,306.391 439.680' 54,675.274
.Montana', ~*r^JT\ :. !.'*VJ;,: . v' J.,:'"-f|r 3,768,877 \J .^uV-" 3.768.B77!
Nebraska 9.433,185 9,433,185 78,832,493 >8.832.493
^evada,--^^^-"-1 'vT^lr/^ ' -Mr'::.'295.363i;,33295,363;;
~* " ** 19.353.260
New Hampshire 18,662.839 690.421 .13,937,710 21,637.415*' ' * 134,975.125
;.-yv ;]?127.852,913
] New'Jersey} >..-, \ r?.* 204.357,008 V'v! "; ii;;U3:^HiS332,209,921- ;532,237,673: C " r ~ ' % r. i 5 7 . ^
New Mexico 22.181.004 22.181.004 76.603.970 76.603.970
New York 'i;1*? v ' I:^433,940.732r;*.rr ~ .^jf^v^ 911499,299;,?' -228.932,077.;., n:";rJ\ ?-;: \ U: .^78,705.222:7^. ::*-:,/'"':"~ ^^'4^07.637^99!
North Dakota 68.214 68.214
;^102,291,841- r/-147,549" '9B;4W^;^-*r-.^W^^^^^.200\939^70 ' 19.197,808
V C ^ ' i r

"" r^

-'-"'""- -
yT^rUT-ifcUCUr::1-

106.781.191 ^;,-^1:^J-.^399.857,446

125.979.0jW jM^X^3B9^I57?I38]

Oklahoma 19.913.222 21329770" "*"*""* "41.742,992

'Oregon T - yv,*"*.
.&-**.*h^>it***i*1M*$ a;* ..i.'r-.i. <_. ,,lj. 7,938.021
^^?.?38;q2i; ^..TTv. v: "r' v ^r^'ii^; ^?TncTucJed In'Qff-Jraclc'V^geBngl*';:; -;.' 'r ;^^3^SHS *
Pennsylvania H69.961.239 31,818.056 141.779.295 Included in Off-Track Wagering _ ,,
'Rhode Islands r i-,> K L* ^ ?.' i 'J* f c xi"i."T "^?^?^Tjc*; ^^v-.,.,.. -,. .^ , -j.^.;'?...* .-*.,. ,, ..-.v .>.,,^,.^->.^ -,~i 59 857162~vit^4S'i59l857n622
South Dakota 253.395 *' 253.395
Te x a s - ^ ^ f ^ ^179.593,935 V ^1?^^tJ8B^SSr^S3/ir; r.,r,;4''^,612,Q30^^rti04f744;934" ' -<< 1 *-a 1 - ij ,- =* v , ' . " i * - - ^ i * * ? \*. 1 ^--s -"* ,'*'*** ff -vt*>* *vn q?3 105*^s. 1%333.923.1051

A "~ " ' " " " 73.529 "" *""" 73.529
Vermont """""'36^612 * " ~ 361,612
i V i r g f n i a - V- r r i - - /, :'.;5,4?1.303^ - , _ ^:;^^v^; &szxtx*%?.,.t\ ir - ^^rir^^^rvLr-t-548i,3p3. ^ \ ^ Z ^ 2 . 0 M 5 M ' * > ^ ^ ^ ^ '-' ' *'-^^2|64,5545
Washington 61.264.578 1.209.590 62,474.168 75.404.226 7M04;226,
.West Virginia -Jrr ;/-r37;312,7li;,:v',ir:-;,v.*^s;^.^^""Jh.iHnb::,.,,:::ir^ ..^-v^i^37;312.711 V.'i". .\!.,.\6M8319i9-;:r,,?.jir;^~?"-^ ^1*- Jfr.'>;',; ^ r',: .v.,'::..^',',I'S. :>"r-'7".5%183-91f
Wisconsin 54.796.437 .54>79SX
;Wyoming c " * 'STi'i' i*',!^-, H - i>-iinffllS u, ..'4 cno (\j1A1
t--=*! -. .*...!^'-,-1,-7 < .'^.r ,r-t~", * ' 1 0U,Ull4- ^t1,602,044 VV
f.

Totals 2,484,623,070 59,894,564 665,777,012 170,931,088 3,112,658,489 299^55 657,358.196 1,323,625^43 5,093,941,183
3,381.225,734

Note: Live "mixed" racing is primarily a mix of Thoroughbred, Quarter Horse, and other flat racing. ITW handle in Rhode Island includes Greyhound racing.
Classification of reported data in some states has changed from previous years. Please see notes on Individual states under "Explanatory Notes."
 [p IF r p r

USA
Live Meeting Attendance 1997 Average Attendance for Live Meetings
Thorouohbred Quarter Horse Harness Total
Thoroughbred Quarter Horse Harness Mixed Total

Alabama '
Arizona 549.527 549.527 1,935 1,935
'Arkansas- ; 704.050, 7 ^T,- '^rrtii*
California 8 . 5 4 6 , 8 11 ' 7 5 5 . 2 6 6 666.818 1 . 0 1 5 , 0 1 6 1 0 , 9 8 3 , 9 11 \ 18.069 5.319 4.903 9.667 12.832
.Colorado , ',' "*' '. N/A* !-. 1~-;.-" .M/Ai^"
^ 1 ii 1 j inr\ *is <.i 1* 5~>, . * . * *><?-> *ii>.rv - >,

Connecticut ' > N/A

Delaware J ' *aJ1p* <
,M 4>-N/A*
" 382.667* ' " " ~ " 1.945.986" f i ^ ^ v. : ' - : r e f t : ^ li*iSirl^ "^3384*
Florida 1,563,089 4 081 1.994 .,
Jdaho , fi'^bBjua.;-; f rBE^i45,4B21
Illinois 1.518.073 842.459 2.360,532 3,795 1,388 ^ 2,344,
Indiana . 73.900 r W >'--V'i 95.809 ,' V r,'.,/.,^/l:-.;T~V.^:;?f:169,7p9 " N/A N/A
Iowa N/A N/A
Kansas . v "'-,>^32,689^^T^^32,689}f
" *"*" ~ 1.733.106
Kentucky 1.694,853 38.253
.Louisiana r' ; 1,098.395,, ^^d>rS9.522^3^>jil57,917J
Maine '"^N/A~ N/A N/A jyA
Maryland ' 2,073.407 - i-;362.834 -;."; r- .My^:r':'rlT;*'iirlt2,436.24.f ;^v^;^irfg\694ir#^l^ri^^^
Massachusetts 940.494 50,164 990.658 5,598 557 ^ 3,840
- r ::.;: 31,454-^1 - J.sr2.099;295
Michigan 644.983 '" ' 1,422,858
" 9,653 ~" '~ .-. - --- .j^ 5885 5544
Minnesota 3 11 , 8 7 9 " ~ 3 2 1 , 5 3 2 * , -My-' l - - *; '^-*!^?v;ri1.'.':^^.^:5 t^ja;."icta5^^WA1wi^W
Montana - .:; v.! j.. n/a - -V7-- ^ T^'Wft'd *; I.L.C i Lit . .it; .xr^i, X r* ciiiixSi. v^* > J J! ii* ^ * -*- ^ - < --Wko juwJi**--
Nebraska 203.857 203,857 1.742 ., J:, ..
Nevada > ', ,-rr^A""?;.su"^-V*:ji*-%:7J '^^^^i.t^*-*^..-^yt/^"S*RHa,on*-*-^*r2JS
New Hampshire 260.702 N/A 260,702 2,607 N/A 2.607
New Jersey , ' 1,438,204 1,441.097 '.,-' .' .." ,?-4X'^**"^i^'2,879,301 CA J /"r ? r r"* 1 ^* - 6 . "2"2 6 ^ "- - * r i^ S j [' t i ? r"-' : ^ ^- ^" T
-^-3' : 4 4"8^ ^ ^ 2
^ ^, ^1 ^0^8s S t ^24, 31 .078J
New Mexico 451.173' ~*~ 451,173*
' :^26.649 . ~ ,S .v V"-l--7"^t-;3,423;265i
New York 2,596.616 + . *_-..^^u *k-. - WA N/A

North Dakota N/A* ~ " N/A

840.740
Ohio; i ,*.;"v >N/A->^.i Ci .733.978
Oklahoma 317,830 314,530 632,360 2 970 1,565 ^.uoo
' :.:., V' N/A7:r-'-tV^^%* N/A^),'
.Oregon
Pennsylvania 2,276.774 978,910 3.255.684 5 382 ' 2,667 41*1
Rhode Island , , . ... , . ... -V- ;
V. r J ' . ? ; a t r . ^ - ' ^ - a ? i M : ' * i . V. - - t a r - J .-^d . - -^ ^(,,^,3^ N/A

South Dakota " N / A ' " ' ~ * " * ' * " WA "
.Texas - v ' , 1,158.190,', :''5:;r^?3*607?'^ "^ N/A i i ?/'..' nv S T4 ,,-.-. i ."4 "qin^'- ":*Se-!-5JS ^T.,'3' '578'^3". flSJi-. *r2 $*&?} ^/^^w:2M62wqgK36aSM!
Vermont N/A N/A
.Virginia ~ v. , .108.591 . **-" ,."^'t,^*,, \ ,". *T."*
Washington 714.363 31.385 745,748 3.199 1,121 _^La <
West Virginia,.. ,:-n/a:t
Wisconsin
Wyoming J ^ -< -.,.- N/A -** +*.***.*r^nlA: *- >k*A X*.-?ftat--S*wit-^**. a-:

Totals 1,849 1,935 3.499

28,773,922 1,148,873 8,852,379 3,071,003 41,846,177 5,402 4.488

Note: In some states (indicated by 'N/A"), attendance Is not collected by the Commission or reported by the race tracks (tracks may offer free admission).
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33Hnoi $ SJ.0V5
 HJI JUL of B.C. OFFICIAL STATEMENT OF DIRECTION FOR THE FUTURE OF HORSERACING
Di BRITISH COLUMBIA
., Au r a b l e D A n gS
uesptember 20. 1988
The Hono Ree r
Solicitor General For The Province of British Columbia
Parliament Buildings
Victoria. B.C.
V8V 2L9
Dear Sir,
Re: Horse Racing Industry Task Force
The Horsemen's Benevolent And Protective Association Of British Columbia ("The H.B.P.A. of B.C.") is incorporated under Society Act of
British Columbia and has amongst its purposes, as set out in paragraph 2 or its Constitution, the following:
"(b) to represent all members in dealing with Racing Associations with respect to purecontracts. the negotiation of purse contracts, the
improvement of facilities, and all other matters of interest and benefit to members;"
Our organization is comprised of approximately 2,000 individuals who are owners and/ or trainers of thoroughbred horses in British Columbia.
It is governed by a board of directors which is elected every three years.
w. During 1988 our members were provided with three opportunities at special general membership meetings to make enquiries and to offer
comments related to the captioned matter. Mohan Jawl. chairman of the task force, participated in the dialogue at each of the sa.d meetings
which were held on the undcrnoted critical dates:
March 24 - prior to the May 1 deadline "for submissions regarding new or upgraded racing facilities;
May 19 - by which date the various submissions had been received by the task force (each of the proponents of new racing facilities had
their representatives address our members at this meeting;
September 8 by which date the Horse Racing Industry Task Force report to the Solicitor-General had been made available to our members
and others.
ImiLsl The board of directors of The H.B.P.A. of B.C. interprets the thrust of the task force report as being capable of summation under two
principal headings:
a) that horse racing in the province be conducted under the direction of a non-profit society, and.
b) that commencing immediately, the provincial government set aside in an Industry Facilities Improvement Fund up to 1W*> of its (net) 3%
D l i t fl
pari-mutuel betting tax for capital expenditures to be directed within the racing industry.
Within the parameters of the aforementioned interpretation of the task force report, the board of directors of The H.B.P.A. of B.C. offers to
y o u i t s r e c o m m e n d a t i o n s a s s e t o u t h e r e u n d e r. _ _ _ _ _ _ _ _ _ _ _ _ ^ ^ ~

J^J^aT'of It least one mile in circumference together with appropriate amenities must be made available to accommodate thoroughbred
iorse racing within four years of April 1, 1989. _ . '

I TheTrlTcmre and mandate of the non-profit society concept as envisioned in the task force report should have incorporated therein the following
amendments wr^h w hdieve will further enhance the overall proposal of the task force.
(a) The interests of the thoroughbred and standardbred sectors of the industry should not be blended within one organization; each should be
represented and governed by its own non-profit society and each should be responsible for the direction of the capital funds which will be
generated from within their respective sectors.
ijd (b) While we agree with the concept proposed by the task force of a it member governing body directing the affairs ol the thoroughbred sector
we believe that the governing body would function better if it were structured in the following manner.
i) permanent positions
5 appointed from the directorate of The H.B.P.A. of B.C.
3 appointed from the directorate of C.T.H.S. (B.C. Division)
;tnt1
4 appointed by the provincial government
_l_appointed by B.C. Horse Council
13 in total
;imfl ii) elected positions to be filled from regions of the province (1/3 of whom are to be elected each year)
6 from the lower mainland
3 from Vancouver Island
3 from the interior of the province
12 in total
(bTaddition, the governing body should include a Deputy Minister of the provincial government as a non-voting member).
(c) We believe it would be appropriate to facilitate the conducting of the business of the non-profit society to have nine members of the
governing body as recommended above designated as a management committee, the composition of which should be
3 of the appointees of The H.B.P.A. of B.C.
1 of the appointees of C.T. H.S. (B.C. Division)
2 of the government appointees
3 of the elected members

9_in total
(d) The responsibility for implementing or not implementing the recommendations of the task force as set out on pages 37 thru 43 of its report
to you dated July. 1988 should rest with the governing bodies of the non-profit societies.
As a board of directors which regards itself as having been elected by 2,000 members to give direction on matters which affect thoroughbred
racing in the province, we urge you in the strongest possible terms to act favourably upon the recommendtionsasset out herein.
SUBMITTED ON BEHALF OF THE BOARD OF DIRECTORS OF THE H.B.P.A. of B.C.

ROBERT H. STIRSKEY
President
 |;t*4

DISCUSSION PAPER

1999 BC HORSE RACING REVIEW

hs)

DESERT PARK ON TRACK 2000

^ November 3, 1999
f
it,.. Contact:
Brian R. Hayes
15275 93A Avenue
Surrey BC V3W 0E6
Tel (604) 588-3793
Fax (604) 588-9020