Ontario Sports Betting Hurting Horse Racing, But There’s Progress On Integration

Written By Dave Briggs on August 11, 2022 - Last Updated on September 28, 2023
Jim Lawson is optimistic horse racing will, eventually, be integrated with Ontario sports betting operators. In the meantime, the CEO of the Woodbine Entertainment Group sees worrying signs that it's losing some of its big punters to sports betting.

Woodbine Entertainment Group CEO Jim Lawson said he remains optimistic Canadian horse racing will end up being offered on all the major Ontario sports betting platforms in due course.

In the meantime, he sees some worrying signs. He believes the province’s open online wagering market is drawing some business away from horse racing’s biggest bettors.

“I continue to have the concern — and we’ve seen some evidence of it with our large wagerers — that there is some cannibalization of our product by the sports betting companies,” Lawson told PlayCanada. “And that’s only from talking to some of them. They’re definitely not only horse racing wagerers. They are also sports bettors. We’ve seen some of our larger customers come off (horse racing) now.”

Ontario has massive horse racing industry

Ontario horse racing is big business.

The province’s horse racing industry supports some 25,000 full-time equivalent jobs. Fifteen tracks conduct racing in the province.

MORE: Bet365 horse racing now live

Lawson is the head of Canada’s largest horse racing operator. Woodbine runs thoroughbred track Woodbine Racetrack in Toronto and standardbred track Woodbine Mohawk Park in Milton, ON.

He said he doesn’t know why there have been some declines in betting on horses from some of Woodbine’s largest players. It might be because it’s summer, they’re betting more on sports or something else.

“But there’s certainly an alert, a yellow flag from our standpoint, that this is happening,” he said. “We felt all along that there would be some cannibalization of pari-mutuel by sports betting. This is why it’s so important for us to find that whole new audience of sports bettors.”

When the Ontario online casinos and sportsbooks market opened on April 4, Lawson told PlayCanada horse racing just wanted to be involved in the action.

“We’re not looking for exclusivity, we not looking for protection. We just want to be part of it,” Lawson said at the time. “On the integration side, all we’re asking is to let (operators) host our product.”

Optimistic integration with Ontario sports betting apps will happen

Woodbine has successfully proven to the federal government that its pari-mutuel product can be integrated with sports betting platforms, said Lawson (below).

Jim Lawson CEO of Woodbine Entertainment

The company is now working with both the Alcohol and Gaming Commission of Ontario and iGaming Ontario to get the green light to place horse racing content with Ontario’s 23 legal sports betting operators.

“We’re optimistic that’s going to happen in the near term,” Lawson said. “Though, it’s not on a timeframe that any of us would like. But these things do take time and we’re in this for the very long term. This is a long-term benefit for the industry.”

He said integration won’t happen by the time Woodbine puts on its premier event, the Queen’s Plate, on Aug. 21.

But Lawson said the long-term benefit to Canadian horse racing is worth the wait. The increased exposure will make up for whatever betting losses the industry may be currently experiencing, Lawson estimates.

“This opens up horse racing to a whole new world of customers,” he said. “We see it as incremental revenue for the horse racing industry.”

How Canadian horse racing came to be excluded

There is a twist in all this. Lawson fought and won the right to exclude operators from offering pari-mutuel wagering in Canada. That led to operators being unable to add Canadian horse racing to their gambling mix.

“Horse racing remains pari-mutuel and with us being the only current pari-mutuel license holder in the province of Ontario, if they want our product, they have to come and get it from us,” Lawson said.

Pari-mutuel wagering is a system in which bets are pooled, the house take is deducted and the payoff odds are calculated by sharing the pool among all winning bets. The system is critical to supporting the costly exercise of owning and campaigning racehorses and putting on the horse racing product.

Woodbine was concerned that bringing in the fixed-odds wagering that sportsbooks offer would lead to razor-thin margins.

It’s a vicious cycle

Racehorses cost a lot of money to acquire, train, feed and keep. Race purses are, mostly, derived from the track’s take of pari-mutuel wagering. The danger is a lower take for the tracks leads to lower purses. Lower purses drives owners out of the game of racing horses.

Since field size is critical to driving handle, having fewer horses leads to smaller fields and that leads to a further decline in handle. That in turn lowers purses even more and drives more horse owners out of the game.

Pari-mutuel wagering was excluded when single-event wagering was legalized in Canada in August of 2021. That happened thanks, in part, to Woodbine’s lobbying.

Lawson wants horse racing to be featured on sportsbook apps. The trick is the bets would only be pari-mutuel, for now. Bets would also need to be looped through Woodbine’s tote system.

Lawson believes sportsbook companies are interested in horse racing

But are sportsbook operators interested in offering horse racing, especially under horse racing’s terms?

Lawson said, “Absolutely they are.” He points to the fact that many of them — bet365, PointsBet, FanDuel, etc. — have deep roots in horse racing.

That said, there’s probably more in it for the horse racing industry than the operators. For horse racing, the exposure alone would help the struggling industry find a new audience.

“What we see it doing is opening up horse racing content to these mega operators and big, big marketers. It’s a big win for the horse racing industry and for government. And would be exposing horse racing to a whole new demographic, which is what we’ve always wanted,” Lawson said.

What about fixed-odds wagering for horse racing?

Lawson said all this is just the first step. The next is figuring out how to offer fixed-odds wagering on horse racing.

“We’re going to have to work with the provincial and federal governments on how we offer fixed odds wagering, of course,” he said.

He said he knows fixed-odds is the future for horse racing and he wants to embrace it. But it would be essential for the tracks to be able to participate in offering fixed-odds wagering.

“If they allow fixed odds you must have the pari-mutuel license holders participate,” he said in April. “You can’t just say, ‘Okay, sports betting operators, you can now offer fixed odds in horse racing’ because that would surpass pari-mutuel (wagering) and we’d be left out in the cold. It would put us out of business. So, they have to come up with a framework and a financial structure that allows fixed odds, but they can’t destroy the horse racing industry.”

Woodbine also working on offering physical sportsbooks

Meanwhile, Lawson said Woodbine is also working on maximizing its racetrack and teletheatre locations. The hope is to offer sports betting in prime real estate. The company is currently discussing the matter with the Ontario Lottery and Gaming Corp. which is key in deciding the future of physical sportsbooks.

“We’re very hopeful that some of our Champions Network and our horse racing locations, including our racetracks, will also be natural and great physical sports betting locations where we can combine horse racing and sports betting. Again, for all the reasons we’ve talked about, we have great locations and we’re regulated and we know how to do it.”

However, as others have noted recently, there is currently no timetable for physical sportsbooks to come to Ontario.

In the interim, Woodbine continues to try to draw people to its racetracks. A few weeks ago, it opened the spectacular Stella Artois Terrace overlooking the finish line from the third level of Woodbine Racetrack.

Apart from the Queen’s Plate on Aug. 21 and other major thoroughbred events, Woodbine Mohawk Park is about to enter its busiest time of year for major harness racing stakes events.

Big events at Woodbine Mohawk Park include:

  • Aug. 27 — The $610,000 William Wellwood Memorial (2-year-old trotters) and $400,000 Peaceful Way (2-year-old trotting fillies).
  • Sept. 3 — The $525,000 Canadian Pacing Derby (3-year-old and up pacers) and $600,000 Maple Leaf Trot (3-year-old and up trotters).
  • Sept. 24 — The $1 million Mohawk Million (2-year-old trotters), $850,000 Metro Pace (2-year-old pacers), $550,000 Shes A Great Lady (2-year-old pacing fillies), $600,000 Canadian Trotting Classic (3-year-old trotters) and $400,000 Elegantimage (3-year-old trotting fillies).
  • Oct. 28-29 — The $6.7 million Breeders Crown (12 rich finals spread over two nights of racing).
Photo by Michael Burns / Woodbine
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Dave Briggs

Dave Briggs is a managing editor and writer for Catena Media. His expertise is covering the gambling industry in Canada with emphasis on the casino, sports betting and horse racing sectors. He is currently reporting on the gaming industries in Canada and Michigan.

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