Will Hastings Racecourses 120th year also be its last?
Great Canadian Gaming CEO Rod Baker said Thursday that his company has rejected renewal of its existing lease with City of Vancouver. Talks continue and the Nov. 9 expiry of the five-year term looms while the track readies for its April 14 to October 14 live racing season.
We've invested a great deal amount of capital in the Hastings opportunity and we're working as diligently as possible to salvage whatever value we can, Baker said on a conference call with stock analysts after releasing the companys annual financial report.
The company told shareholders in 2011 that it balked at a 15-year renewal clause, which required it to pay for a parkade and renovate backstretch buildings. It also disclosed a $46.8 million write-off of its Hastings assets. The 2011 annual report discloses a further $4.4 million write-off.
I'm disappointed to tell you we've written off the assets in their entirety from our balance sheet. We still have a small amount for the value of our gaming licence, Baker said. It's a very difficult situation but we're working on creating a future for the racing industry in the province.
Baker called live horse racing a sunsetting business, virtually everywhere in North America with 10 to 15 percent annual declines. The marriage of casinos with racetracks was intended to subsidize the sport of kings, but Baker stopped short of calling the strategy a failure.
In Ontario, where Great Canadian runs two standardbred tracks, the government is mulling whether to slash the $345 million annual industry subsidy. A February report warns the Ontario provincial deficit could reach $30 billion in five years.
Hastings got the go-ahead for 600 slot machines in 2004 when then-mayor Larry Campbell (who later became a Great Canadian director) cast the tiebreaking vote. The permanent slots facility opened in 2008 after a $1.2 million power upgrade shared by VANOC, which held the 2010 Winter Olympics short-track speedskating and figure skating next door at the Pacific Coliseum.
Hastings has produced a fraction of the $6.5 million in annual royalties that city staff were forecasting in 2003. Hastings delivered only $1.288 million to city coffers for the fiscal year ending March 31, 2011. For the nine months ending Dec. 31, 2011, the city received $942,251.09.
A guy that comes to the racetrack historically is somebody that studies things, that looks at a racing program, that uses their brain to think about things, is engaged, is there for a very social event with others, Baker said.
"We found at our two tracks here in B.C., as well as watching and observing the two in Ontario, those folks that come for the slots aren't necessarily the same people that come for racing.
Baker was pessimistic when asked by an analyst whether the company could move the Hastings licence to another, more viable facility.
I wouldn't want to give you any sense of comfort whatsoever that there was any opportunity in that respect, Baker said.
A request to interview city manager Penny Ballem was not fulfilled.