By Christine Duhaime, B.A., J.D., Gaming Attorney & Certified Anti-Money Laundering Specialist
Horseracing industry in U.K. in jeopardy if FOBTs cut
The U.K. government is suggesting the elimination or restriction of Fixed Odds Betting Terminals ('FOBT"), the so-called "crack cocaine of gambling", in order to manage a perceived increase in problem gambling. FOBTs, introduced in 2002, allow bets of £100 per spin and have grown in popularity and number in betting shops. Over 8 million people in the U.K. gamble on FOBTs annually.
Funds from FOBT wagers are used to preserve the horseracing industry in the U.K., and an elimination of them would necessarily negatively impact the industry. Betting shop owners and gaming operators say that restricting or cancelling FOBTs will "kill the horses" and, as happened in Ontario, essentially kill the entire horse industry with it.
Slots & racinos in Ontario
The same issue arose in Ontario, where slot machine were introduced in casinos and at race tracks (racinos) for the express purpose of preserving the horseracing industry in early 1999. Money from slot revenues was earmarked for horseracing and $4 billion was provided to the industry over 15 years.
Two years ago, the Ontario government pulled the plug on the slot machine revenue-sharing deal and the horseracing industry tanked. It was one of Ontario's major agricultural industries.
Ontario agricultural horse industry lost 9,000 jobs
Almost two years later, the government reversed its position and announced a new deal for horseracing, committing $400 million over five years to reverse the decline, less than 25% of what horseracing used to receive. But it was too late - by August, 2013, over 9,000 jobs in Ontario's horseracing industry had been permanently lost and most of the top thoroughbred horses had been sold in U.S. sales to American breeders.
It's unfortunate because horseracing is a sport that spans three diverse and important sectors in Ontario - sport, gambling and the rural agriculture. Worldwide, more than 200 million people attend horseracing events and over $100 billion is gambled on races each year. One of the issues in Ontario seems to be the lack of a strong lobby group for the industry and the lack of awareness of the benefits, economically-speaking, of a strong horseracing industry which should have commissioned an economic impact statement of Canadian racing years ago.
In the U.K., the gambling industry has stepped up lobbying efforts to preserve horseracing and will likely be more successful given the greater importance to horseracing historically there than in Ontario. The U.K. racing industry is one of the largest and most sophisticated in the world, and among U.K. sports, is second only to football in terms of attendances, jobs supported, tax contribution and capital investment.
Photo: Christine Duhaime, Woodbine Racetrack, Toronto.