10/25/2013 10:49AM

Woodbine Entertainment Group changes to for-profit corporation


ETOBICOKE, Ontario – The Woodbine Entertainment Group changed its status from a not-for-profit to for-profit corporation this spring following the Ontario Lottery and Gaming Corporation’s termination of the slots-at-racetracks program.

The change was not announced by WEG and was first reported by the Toronto Star on Thursday.

Nick Eaves, president and chief executive officer of WEG, said the switch was made for tax purposes so that the company can make “business” deductions against revenue received from the province as part of a new transitional funding plan that kicked in on April 1.

WEG received $38 million in transitional funding for the 2013-14 fiscal year. A new deal, in which the province’s racetracks share $400 million over five years, takes effect April 1, 2014.

“Pursuant to the Income Tax Act, revenue derived from the use of property is fully taxable, whether an entity is a for-profit or not-for-profit,” Eaves told the Toronto Star in a written statement. “If Woodbine [Entertainment Group] had remained a not-for-profit, it would have been required to pay taxes on the full amount of any rents received from the OLG without the benefit of taking any of the normal deductions available to active businesses.”

Under the slots-at-racetracks program, racetrack operators in Ontario received 10 percent of the net profits and horsemen received 10 percent for purses.

As of April 1, the Ontario Lottery and Gaming Corporation has been renting the slots facilities for an undisclosed rate. There are some 3,000 slots machines at Woodbine and 850 at Woodbine Entertainment Group’s Mohawk Raceway.