The Drummond Report has really got folks upset – especially the horsepeople of Ontario. They’ve had ten plus years of slot machine revenue and obviously they like that – and what’s not to like? So when someone talks about altering that equation, blood pressures rise, anxiety builds and efforts to stop the alterations are planned.
Some of the folks who have the high blood pressure asked me for my advice as I was actively involved in the establishment of Grand River Raceway and Slots in Elora, Ontario back in the early 2000’s. As a result of that experience, I can empathize with the horsepeople who have become addicted, oops – I mean accustomed to this revenue stream. Maybe there’s a change that could be implemented that would provide the Province with some ‘overlooked’ revenue – better known as taxes. Here’s a brief summary.
Currently there are 17 racetracks across Ontario who have profited from slot machine revenue. Six of these operations are classified as ‘not for profit’, including Woodbine, Mohawk, Grand River Raceway, Western Fair Raceway, Hanover Raceway and Clinton Raceway. As a result of these six operations business status, no provincial or federal income tax is paid on their ‘profits’. Doing a quick calculation on how much slot machine revenue was attributed to these six operations shows that there are over 4000 (yes, that’s four thousand!) slot machines at these six operations. Painting a general brush over all six of them and applying Grand River Raceway’s revenue numbers ($4 million/year for 200 machines – 10% of overall slot revenues for the facility) to them all, there would be a revenue stream of $80 million dollars from these six racetracks – quite a revenue stream, especially when it produces absolutely no tax dollars! There is also some confusion as to whether these six operations pay property taxes on their land. Seems the jury is still out on that area of taxation. So where can I sign up to start my own ‘not for profit’ and get a piece of this action? I could buy a horse – if I had to.
Surely the intent of a ‘not for profit’ status was not this. It didn’t take a great deal of thought to see this ‘hole’. There’s bound to be hundreds of others. The province should be looking at their tax codes/legislation and correcting these loopholes to ‘find’ some money for health care, education and social services. As I recall in our southern neighbour’s, State of the Union Address, Obama stated that one of the places they would be looking to find some cash was their outdated tax code. Maybe Dalton and Stephen should join that search party and see what they can find. How about the shareholder agreement differentiating between not-for-profit locations and for-profit locations? A different percentage of the take or an ‘in lieu of tax’ payment would at least level the playing field between the two business classifications.