The government confirmed its commitment to supporting economic development within the industry through two key commitments:
- Pari-Mutuel Tax Cut
- Introduction of Slot Machines at Racetracks
Pari-Mutuel Tax Cut
As part of an overall plan to revitalize the horse racing industry, the government reduced the pari-mutuel tax to 0.5% of total wagering in 1996. This new rate is competitive with the tax rate in other jurisdictions.
The tax savings (approximately $50 million per year) continue to be re-invested in the horse racing industry. The industry has directed these funds for items such as infrastructure improvements and more money is returned to the wagering public in the form of customer benefits. Racetracks have invested in upgrades to their public facilities and have provided customer incentives in an attempt to encourage growth and attract new customers.
As part of this arrangement, the industry also agreed to cover regulatory funding costs for the Commission. This was accomplished by eliminating the track fee and replacing it with a new levy based on wagering.
Introduction of Slot Machines at Racetracks
The introduction of slot machines at Ontario's racetracks created a partnership between the racing industry and the Ontario Government. The government is the owner and operator of the slot machines and directs 20% of the net proceeds to the horse racing industry to be split equally between the racetrack operator and horsepeople (through purses). The first racetrack slot operation was opened in December 1998, at Windsor Raceway. Between 1999 and 2003, sixteen more racetracks opened slot facilities.
Two other racetracks are proceeding with plans to implement slot machines at their facilities - Ajax Downs (which has been approved for up to 200 slot machines) and Quinte Raceway in Belleville.