04/01/2009 11:00PM

Diversification key to Woodbine's stability


ETOBICOKE, Ontario - At a time when many racetracks are struggling - with some cutting dates, purses, and stakes, and others fighting for their very existence - business has remained stable at the Woodbine Entertainment Group.

"We have a good business model," said Nick Eaves, president and chief operating officer of the Woodbine Entertainment Group. "We're diversified; we have a balance between a racing and gaming mix."

That stability allows Woodbine to offer a projected total of $84 million in purses over the course of the 167-day Thoroughbred meeting that begins Saturday, for a daily average of more than $500,000. Those figures include bonuses for eligible Ontario-bred horses who finish fifth or better in open races. The bonuses have risen to 15 percent of a race's purse from 10 percent last year.

Despite the international economic crunch, Woodbine has been holding its own on both the racing and slots fronts through the opening three months of 2009.

WEG, a not-for-profit corporation, hosts Thoroughbred and Standardbred racing at Woodbine, Standardbred racing at Mohawk, and slots emporiums at both locations.

The company also owns the Greenwood teletheatre on the former racetrack property in east-end Toronto, plus two teletheatre/restaurants - the Turf Lounge in downtown Toronto and the WEGZ Stadium Bar in Vaughan, on the northwest of the city. There are 24 other independently owned teletheatres operated by WEG's Champions network.

Eaves notes that the total handle, which had weakened in the final stages of 2008 and finished up at roughly the same level as the previous year, was up by about 6 percent in January and February and about 3 percent through the first two weeks in March. Those statistics cover both breeds, live and simulcast.

Slots handle, which had been up by about 10 percent at Woodbine through the first three-quarters of 2008 before beginning to decline, was up by 7 percent for January and February compared to the corresponding months in 2008 but slipped last month.

"The most encouraging element is our total track handle through our horseplayer rewards program is now about 47 percent of our total wagering," Eaves said.

"And, through that horseplayer rewards business we've seen a number of customers who left us some years ago come back from unregulated offshore operators who have been running into trouble, shutting down, or locking customer accounts."

WEG collects 10 percent of the net slots revenue, with another 10 percent being divided between the Thoroughbred and Standardbred horsemen for purses. WEG and the horsemen split $158 million last year.

WEG's share is used for operating and capital costs, including the funding of improvements and new projects for its properties.

This winter, four more barns on the Woodbine backstretch were retrofitted at a cost of approximately $1 million apiece. A new starting gate, with a price tag of $250,000, is slated to make its racing debut on opening day.

But WEG's biggest project, Woodbine Live, remains in a holding pattern due to financial and regulatory issues.

Located on the Woodbine Racetrack property, Woodbine Live is a long-term venture that is being undertaken in concert with Baltimore-based Cordish Cos. A hotel, bars, and restaurants, live entertainment facilities, retail, and office space, and residential units all are components of the mammoth plan.

"Naturally, these are terribly difficult times to be moving a $1 billion development project ahead," Eaves said.

"We are still moving through the process with the city of Toronto on all of the planning approvals.

"The near final piece is site-plan approval. That gives final sign-off on building design, road networks, curb cuts, everything. Given a project the size of this one, it's a huge amount of detail.

"We're as committed to it today as we ever have been, and certainly we're still aiming to get started before the end of the year, but there are so many factors that can affect that."