Thirty-five standardbred horse breeders have filed a $65-million lawsuit against the Ontario Lottery and Gaming Corporation (OLG) in response to the 2012 cancelation of the slots revenue program at Ontario racetracks.
The claim, filed at the Superior Court of Justice in Guelph on March 10, seeks $60 million in damages for negligence and $5 million in punitive damages.
The claimants state in the lawsuit that the cancelation of the Slots at Racetracks Program (SRP), which generated about $345 million annually for the industry, “was arbitrary, capricious, irrational and demonstrates bad faith by the OLG and Ontario.”
Lawyer Ian Matthews, of Lax O’Sullivan Scott Lisus LLP in Toronto, said his firm is preparing a second claim against the Ontario government, to be filed early next month.
“Whenever you serve the province you have to give 60 days’ notice before you can start a lawsuit. The claim against Ontario is going to be very similar,” Matthews said, referring to the $65-million suit against the OLG.
The Ontario government launched the SRP in 1998 together with horse breeders, offering purse money derived from slots revenue. It was officially cancelled by the government on March 12, 2012.
Matthews said his clients did not want to file the lawsuit, but with a two-year window to take legal action, felt they should move ahead with it last week.
On March 17, OLG spokesman Tony Bitonti said the commission had not yet been served with the lawsuit.
“OLG will respond to the allegations after the claim has been served and we have the opportunity to review the allegations in detail,” Bitonti said in a brief statement emailed to the Advertiser.
He added, “It is important to note that the standardbred horse breeders are part of the horse racing industry, which received $3.4 billion over 10 years from the [SRP].”
Veterinarian Patrick Meyers and his wife Anna say their standardbred and quarter horse breeding operation was decimated by the provincial government’s cancellation of the program.
The couple is part of the lawsuit in a bid to recoup some of the losses at their 134-acre Emerald Ridge Farm breeding operation on Wellington Road 29 in Guelph-Eramosa Township.
They previously had 80 breeding mares on the property and seven standardbred stallions and three quarter horse stallions. They bred about 600 mares in the province and the U.S. at the peak of their business. Today there are no brood mares on the farm.
Meyers said the most recent indication of the collapse in the breeding business came at a yearling sale in the U.S. in 2012 where a top pedigree yearling he put in the auction sold for $15,000.
“That foal should have sold for $50,000 to $100,000 plus,” he said.
The couple was involved in the government agreement when the slots program was established in 1998. The program offered enough financial assurances to convince the couple to buy the farm and relocate from a 10-acre farm near Hillsburgh.
In 2001, Meyers estimates the couple spent about $500,000 to upgrade and build new barns on their property and to upgrade breeding equipment.
“Now it’s all gone,” Meyers added. “I used to have seven employees, now I have one. In the last two years we’ve lost $300,000.”
Matthews said the claim alleges that when the slots at racetracks program was launched there was an agreement with breeders that they would be given five years notice of any termination – to coincide with the five-year breeding program for race horses and their individual investment in the program.
“The way it was implemented there were obligations on the government and the breeders on how it should run,” Matthews said.
“It was always understood the slots at racetracks was to be long term. These people are making long-term investments, they need five years to realize a long-term investment.
“We don’t say the government is not entitled to cancel the program; it was the manner in which they did it. They (breeders) got the rug pulled out from under their feet.”
The lawsuit claims the 2012 cancelation of the program was made “without prior notice, consultation or any offer of compensation.”
The lawsuit also includes several statements from government officials the claimants say is proof the government and OLG breached their obligations to horse breeders.
“It’s a sad story for these people,” said Matthews. “They put their trust in the government based on what the government was showing them. These breeders did not want to have to sue.”
Meyers said the decision to cancel the slots program “was made without a great amount of thought. We’ve both suffered financially and mentally.”
As breeders, Meyers said, the couple knew about the financial difficulties related to the horse industry, but the fact the government pulled out of the funding agreement has cost breeders and those working in related industries an “astounding” amount in lost jobs and revenue.
The couple has managed to find part-time work outside of their struggling business and hope if the lawsuit is successful they will be able to recoup some of their losses.
“I don’t feel I’m entitled to a big windfall,” said Meyers. “What we can fight against is the government basically cutting the legs out behind us.”
