Assiniboia Downs deal reached between province, jockey club

A legal battle between the Manitoba Jockey Club and the provincial government is over, as a deal has been reached on the future of Assiniboia Downs.
A new agreement between the Manitoba Jockey Club, which runs the Assiniboia Downs horse-racing track in Winnipeg, and the provincial government means the jockey club can move ahead with plans to build a multimillion-dollar casino and hotel with the Peguis First Nation. (CBC)

A legal battle between the Manitoba Jockey Club and the provincial government is over, as a deal has been reached on the future of Assiniboia Downs.

A 12-year deal announced on Wednesday allows the jockey club, which operates the Winnipeg horse-racing track, to keep 140 video lottery terminals (VLTs) on site.

In exchange, the jockey club will drop its legal action against the province.

Last year, it took the province to court over a proposal to have the Red River Exhibition acquire the facility.

The club claimed it was not given ample notice of the province's intentions, and it expressed concern the track may go bankrupt under the oversight of the Ex.

The jockey club also filed a complaint against Stan Struthers, who at the time was Manitoba's finance minister, accusing him and others of breach of trust and fraud.

Wednesday's agreement means the jockey club "will immediately discontinue all of its outstanding litigation against the government, its ministers and all government-related entities and individuals," the club and the province stated in a joint news release.

"Well, certainly I'm pleased. I mean, when all is said and done, you know, I would suggest both sides are relieved," Darren Dunn, the chief executive officer of Assiniboia Downs, told CBC News.

"It's something where there were definitely no winners in this situation."

Dunn said the Downs will get less revenue from the province in the long term, but more than 500 jobs are being saved.

VLT revenues going down

The province previously had a special agreement with the jockey club in which Assiniboia Downs took 80 per cent of revenues generated by its VLTs while the government got 20 per cent.

But under the new deal, the Downs will be subject to the province's standard VLT siteholder agreement, meaning it will receive 20 per cent of revenues and the government receives 80 per cent.

This conceptual drawing shows a new development planned at the Assiniboia Downs by the Manitoba Jockey Club and the Peguis First Nation. (Nelly Gonzalez/CBC)
​That means Assiniboia Downs is estimated to receive $950,000 in VLT revenues in the 2014-15 fiscal year, which is well below $6.36 million in 2013-14, according to the province.

The government has agreed to provide grants over the next 10 years to compensate for the decrease in VLT revenue going to the Downs.

The grant will be $5.4 million in 2014-15 and the following three years, but that amount will be reduced until the 11th year of the agreement, when there will be no grant and the Downs will receive only the VLT revenue.

"It is an agreement that has some tapering of revenues, so the industry will have to make some adjustments. But in saying that, I'm pleased and relieved for the families involved and the 500-plus jobs," Dunn said.

Dunn said the agreement means the jockey club can move ahead with plans to team up with the Peguis First Nation to build a multimillion-dollar casino and hotel at the Downs.