Woodbine CEO Says Sports Betting Bill Could Devastate Canadian Racing Industry

A bill that would legalize single-event sports wagering in Canada and is now being debated by members of Parliament in the Canadian House of Commons would have a disastrous impact on racing, warns Woodbine CEO Jim Lawson. The bill does not allow for the racetracks to be part of the sports betting universe and, perhaps even more worrisome, it would allow non-racing betting sites to take fixed-odds bets on racing without having to share any of the revenue with the industry.

“This is a real threat to the industry and certainly the Canadian government cannot ignore horse racing in terms of this legislation or they risk, ultimately, putting the horse racing industry under,” Lawson said.

Lawson said that under normal circumstances he wouldn't expect that the bill, as it is currently written, would go very far. But he fears that the Canadian government is so desperate for money to deal with the numerous expenses that have come about with the pandemic that lawmakers might jump at the opportunity to legalize sports betting and the quick fix it represents.

“This bill has gained momentum,” he said. “The economic realities that COVID has created in terms of health and education costs means it will take years to catch up. Other than increasing people's taxes, and we are taxed enough in Canada, they have to look for alternative sources of revenue and this is an obvious one.”

According to the website casino.org, the bill has backing from members of the four largest parties in the House of Commons–Liberal, Conservative, Bloc Québécois, and New Democratic–and a member from each spoke in support.

With more and more U.S. states legalizing sports betting in the U.S. and with governments everywhere needing revenue, it is no surprise that efforts have begun to legalize sports betting in Canada. But what sets this bill apart from ones in the U.S. that have made sports betting legal is that it lumps fixed-odds bets on racing in with sports betting. The same firms that are given the green light to take sports bets can also offer fixed-odds sports bets and would not be required to turn over any of the money to the sport.

“We are the producers of the content and we are paying the operating costs of running the races and paying the purses,” Lawson said. “We should be the beneficiaries of fixed-odds betting on horse racing. That's just common sense. You can't allow someone else to encroach upon our only revenue source. You can't take away that revenue source by allowing fixed-odds wagering on a product we are producing and pay to produce.”

While allowing outside firms to profit off of Canadian races is bad enough, Lawson said that it would be particularly troublesome for Woodbine to be left out when it comes to fixed-odds betting, which he believes will be successful.

“Look at Australia, where fixed-odds wagering now accounts for 60% of the wagering on horse racing,” he said. “What if that phenomenon were to repeat itself here and we lost 60% of our wagering? It would put us out of business if we didn't either control or participate in fixed-odds wagering on horse racing.

“Young bettors, for the most part, don't like pari-mutuel wagering. They find it complicated. They are used to fixed-odds betting on football. They're tough to convert to pari-mutuel wagering. Your new audience, new gamblers, it's likely that they are a fixed-odds person.”

Even if the language in the bill is changed to allow the tracks to operate and profit from fixed-odds wagering, Lawson would not see that as a victory. He wants Woodbine to be among the companies that get a cut of the sports betting pie, which, he reasons, will be so large that it will cannibalize betting on racing. He also sees sports betting as a way to end the need for the subsidies the government is now paying to support racing. In Ontario, the government hands out about $100 million a year to support the sport.

“The Ontario government is subsidizing horse racing through a funding agreement,” he said. “If you want to do the smart thing and totally eliminate any subsidy that we get, let us make up for the money through sports betting. We are not looking for a monopoly. We know there are casinos and others that will be able to take sports bets, we just want to be cut in. We deserve it because of our skill set and our technology. You'd be partnering with a company that is well positioned to conduct sports wagering.”

Lawson said that the solution is for the government to go back to the drawing board and come up with a bill that will include racing's needs.

“We've got a pretty valid argument as to why this legislation needs to just pause and then do it in such a way that it protects the horse racing industry and in so doing allows a company like Woodbine to be a participant,” he said. “Not only would that support horse racing, it would support all the jobs across the country.”

Lawson does not think the bill will be voted on until some time early in 2021. That gives Woodbine and other industry leaders a chance to plead their case and get the language in the legislation changed. But there's no guarantee that will work, and that is what has Lawson frightened about Woodbine's future.

“The minute we heard about this bill we put up our hands and said, 'Wait a second, the horse racing industry and the racetracks have to play a role in this,'” he said. “If not, we could have some very serious problems.”