Future of Horse Racing in Alberta
Dr. David Reid

When an industry has a clear sense of purpose, and knows the direction it wishes to travel, and when this vision is widely shared, then, individuals are able to identify and carry out their roles effectively and with confidence.

David Reid

Dr. David Reid is a Professor of Orthopedic Surgery at the University of Alberta and was unanimously chosen as the Chairman of the newly established Horse Racing Alberta in 2002. Since 2002, Dr. Reid has made a significant impact horse racing in Alberta through his leadership, vision, and passion for the industry. In 2005, Dr. Reid was named as one of the top 100 Physicians of the Century by the College of Physicians and Surgeons of Alberta.  He was the 2006 winner of the Cam Fella Award and the 2006 Alberta Horse Industry Distinguished Service Award recipient as well as being inducted into the University of Alberta’s Sports Wall of Fame.

In short, we needed unity and direction to succeed, and that is what Horse Racing Alberta has brought to the table.
It wasn’t always like this. Prior to 1990, horse racing was a major form of entertainment for many Albertans. Things significantly changed with the introduction of VLT’s. In many ways, the Government became our major competitor.

· To provide additional perspective, in 1991 horse racing made up 22% of the gaming market in Alberta.

· By 2003, horse racing accounted for barely 0.5%, while the lotteries/VLT’s and slots generated $16.9 billion.

· There was a 48% decline in wagering over a 10 year period.

The industry’s long-term viability was threatened.
· Race days dropped from 382 to 308. There were lower revenues - and the money available for purses and facilities declined.

· Lower purses translated into less owners and poorer yearling sale prices.

· Breeders started to get out of the industry and the future of both horse racing - and the agriculturally-based breeding sector, was in jeopardy.

· The number of thoroughbred foals declined from 550 per year to less than 400 in 2001 and similarly, the number of standardbred from well over 600 to about 500.

· The numbers were heading below the critical level required for successful racing into the future.

Breeders and owners were either leaving the industry or abandoning us for more profitable jurisdictions since it was obviously becoming economically unviable to breed and own race horses in this province.

Clearly by the end of 2000 our industry lacked direction and was in a crisis situation – both financially and from the perspective of a shrinking horse population.

· In order to save our industry, and create some stability, we needed to re-evaluate our business from the ground up, as well as our partnership with government. We needed to change direction. Fortunately, thanks to our Premier, our Minister, and our government, we were offered that opportunity. We needed to develop strategies that would allow the industry to move forward with common goals. A Working Committee was established to accomplish this task.
Under the guidance of Ministers McClellan & Stevens the Industry Working Committee tabled a plan in June of 2001.

· Legislation was enacted and the Alberta Racing Corporation became Horse Racing Alberta by June 2002.

· Government supplied us with the tools to revitalize our industry and we have moved forward since that time, with a renewed sense of purpose - and a common direction.

· We set up a different governance structure and obtained a significant share of the slot machine revenue set up at our race tracks , referred to as Racing Entertainment Centres (REC).

· It put all of the major players at the table under the umbrella of HRA which facilitated the foundation of working partnerships.

With the approval of the Racing Renewal Initiative we effectively had the tools to be self-sufficient.

· The Racing Renewal Initiative is an agreement that gives the industry an opportunity to generate revenue from our facilities and from our customers. Revenue that we share with the government.

· In fact, in 2005, the renewal initiative generated $73 million through slots at race tracks, for the Alberta Lottery Fund. In turn, Horse Racing Alberta received $41 million. The math is simple. Clearly - horse racing is a NET contributor to the fund.

Indeed we have generated approximately a 9-fold return on Government investment. By 2005 economic impact was estimated at $385 million. Our input is spread almost equally between urban and rural Alberta and distributed throughout the province. There are over $46 million in tax revenues with 80% going to the Federal Government, 15% going to the Province and 5% to the Municipalities.

All major industry revenues flow through HRA and are then redistributed to the industry in a manner that reflects managed, sustainable growth.

To do this, our Business Plan reflects eight major strategic areas.
1) Industry and Government Relations
2) Regulatory Functions
3) Racetrack Licensing and Infrastructure
4) Purses
5) Breed Improvement
6) Human Resources Development
7) Animal Welfare
8) Marketing

1. Successful Industry and Government relations continue to be the cornerstone of industry stability, confidence and growth.

Just as lean financial times fostered bickering, fragmentation and self interest, so success and financial prosperity can provide an environment where greed and a myopic view of their relative importance may jeopardize our future. This is something HRA must guard against.

Now more than ever, HRA must work hard to maintain the confidence of the industry and its vision. The ability of HRA to speak with one voice, on behalf of the entire industry is the single major key to maintaining Government support. The recent successful negotiation of a 10-year agreement with Government was unprecedented and is surely the basis of stability.

Fortunately at our recent Industry Strategic Planning Session, the need and ability of HRA to represent the industry was unquestioned.

Where are we going?
Communicating with the relevant Government Industries is obviously a priority following the selection of our new Premier.

We need to continue to advocate horse racing as a legitimate and integral component of the Provincial, Agricultural, Gaming, Entertainment and Tourism mix.
We will continue to improve inter group relationships both within our industry as well as with all other horse related organizations in the Province.

On a Federal level, we will continue to work towards an appropriate and fair tax structure and assist the Canadian Para-Mutuel Association in its endeavours to ensure the industry is not exploited by the misuse of new technology.
Success in this strategic area is measured by HRA’s Annual Survey of industry and public confidence and satisfaction with HRA.

2. The Regulatory Committee is charged with enhancing and fostering integrity and ethical conduct as a foundation for all aspects of the horse racing industry including Breeding.
Alberta is unique in North America, and maybe the world, in that its Governing body serves as both the regulatory body as well as the organization that promotes and markets all other aspects of the Industry.

Has the amalgamation of these apparently discrepant responsibilities been successful? We truly think so. While keeping these areas insulated from each other, the ability of our regulators to sit at our Board table and respond to the changing industry environment as it occurs, has been a definite plus.

One of the most outstanding and recent achievements has been a complete updating and revision of the “Rules of Racing” upon which the ethical standard of practise is based. Not only the rules, but the penalties for transgression have been strengthened, and appropriate, include opportunities for education and rehabilitation. This is an ongoing process.
Race horses in Alberta are among the most exhaustively screened and tested of all competing athletes, human and equine.

We are proud of our effort in this area since both perceived and real integrity is the basis for confidence for our investors, fans, owners and breeders alike.
This Committee protects and enhances our public image and that this is the performance indicator that is measured and reported on each year.

Where are we going?
We wish to continue to work on enhancing our ability to detect inappropriate drug or medication use.

3. This strategic area involves racetrack infrastructure. Stability and growth for many is based on a clear picture of racing opportunities in updated, safe, modern and first class facilities.

In this regard, HRA, in partnership with our track operators, have set standards for existing and new facilities. Ability to comply with these standards has led to a 10-year license for most of our tracks, allowing confidence in the future.

At the recent Strategic Planning Session, the industry prioritized its needs in this regards and this included:

· Ensuring the new Calgary Area Racetrack opens in early 2008.

· Upgrading existing facilities including a 7-furlong track at Northlands Park.

· Creating more opportunities on our “B” Circuit by upgrading existing facilities and building new ones.

· Maximizing the potential for Off-Track wagering throughout the province, an initiative that is embodied in our “Hot” or Horse-Off-Track venture.

Where are we going?
Assisting the development and completion of a new “A” track in the Calgary Market Area that will provide a world class facility on which to race our best horses and entertain our fans.

4. There is no question that purse structure forms the basis for growth of all aspects of participation and investment in horse racing. HRA’s strategy is that of managed sustainable growth. A policy that encourages confidence. Indeed purses have doubled since 2000. Particularly Alberta foaled or bred horses run for a significantly enhanced purse structure.
To some degree purses depend on handle and in 2006 our total handle increased about 7% or $10 million, while most jurisdictions were reporting a declining handle.

Where are we going?
Continue to increase overnight purses to encourage owners to breed and race better quality horses. We will also ensure that our stakes purses remain at a level that ensures “black type” ratings for our broodmares. We will work towards making the export of our racing signal more attractive.

5. The long term success of our Breed Improvement Program will dictate the eventual quality and competitiveness of our racing product.

Since 2001 our Breed Improvement budget has nearly doubled.

The most important indicators of success in this area will be more individuals buying than selling farms, as well as buying Alberta bred horses.

Clearly the challenge is different with the various racing breeds, depending on whether there is only live breeding versus artificial insemination and semen transport.

Where are we going?
Our goals are:
· To increase the quality of Alberta Breds running races
· Increase the yearling sale prices and;
· Ensure that breeders are able to stay in business.

6. Human Resource Development is an area of significant concern. Going into the future, trained and able manpower will be our scarcest resource. Our goal is to ensure adequate opportunities for these individuals to train. We also hope that by improving the quality of life for our backstretch workers, we can maintain them in the industry.
So far, we have initiated day care programs, counselling programs, and Exercise Rider and Groom courses in partnership with Olds College. In addition, along with our horsemen’s groups, HRA has sponsored computer courses, and educational upgrading programs.

We have also managed to bring about changes in Immigration Policy to help address the current strategies.

Where are we going?
Going into the future, the initiative at the new Calgary Facility of a Canadian Centre for Equine Excellence, based at a Satellite Campus for Olds College, will create new opportunities for individuals to enter our industry.

7. Animal welfare will always be an issue that is capable of stirring extreme emotions. In reality, our equine athletes are treated extremely well. However, the public perception is often the contrary.

Our initiatives include a “Vet-On-Call program, the development of an Equine Emergency Facility at Northlands Park and a mandating of a Fire Safety Certificate. All our racing animals undergo a race day Vet inspection to attempt to ensure soundness and safety.

Where are we going?
Continue to organize seminars for horsemen related to animal health, upkeep, injury recognition and care.
8. As far as Marketing Strategies, in 2002 it was apparent that horse racing needed a make over. Marketing and promotion of horse racing was critical.

Racing has lost its prominence as an entertainment and sports option. All our Marketing efforts are designed to re-position the racetrack as a fun, multifaceted entertainment package, including restaurant, sports bars and live racing.
Our Marketing campaigns have created a “buzz”. We have concentrated on Brand Marketing and repositioning ourselves on T.V. as a major sport. We believe we have been very successful in raising public awareness. We have won many National and International Awards.

Where are we going?
We hope to increase the value and recognition of our brand and return the fans to the racing venue.

In summary, the blue print delivered by the Working Committee in 2001, and endorsed by the Industry Strategic Planning Committee in 2006, is still sound. It continues to point the industry in the right direction.

It is manifest that the Governance model for the industry, and the dedication of HRA’s Staff and Board have led to some spectacular achievements and progress, in what was initially a daunting task. The Government of Alberta have supplied the tools and the industry has used them wisely.
The key to continued success, however, is the ability of the industry to stay focused on the big picture and communicate with a unified voice and with a common sense of direction. Despite our successes, and recognition across North America, we are still a fragile industry that needs to be constantly reminded that Alberta is a great place to breed and race horses.

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