A Deal Approved, a Future to Write and Some Sour Grapes

The Minnesota Racing Commission approved, by a 5-3 vote, the marketing arrangement between the Shakopee Mdewakanton Sioux Community and Canterbury Park yesterday in a specially called session. 

The afternoon started with Canterbury President and CEO Randy Sampson outlining the deal and providing some history for the panel.  Most importantly, Sampson related that for 15 years Canterbury has struggled for racino in the state legislature.  This past year there was a budget shortfall that was filled by borrowing from our children, a Vikings stadium that needed to be funded, a governor that was in favor of expanded gaming, a new party controlling the legislature and overwhelming public support for a racino and, at the end of the day, the legislation could not even be brought up for a vote.  Sampson was told flat out by several influential lawmakers, “It does not have the votes.”

House Speaker Kurt Zellers and Governor Mark Dayton told Sampson that the best way to get anything favorable done was to go to their neighbors and fiercest opponents in the racino struggle, the SMSC operators of Mystic Lake and Little Six Casinos in neighboring Prior Lake, and try and work something out.  Initial negotiations produced the Horse Racing Purse Enhancement Act.  Further discussions centered on the Native Americans running the racinos at the tracks, which Running Aces rejected.  Ultimately what came out of these discussions was the marketing arrangement that provided $75 million directly to the purse account at Canterbury.

What needs to be understood which I don’t think is by many casual fans, is that there have always been two very different views on how any expanded gaming money was to be utilized by the racetracks.

Canterbury Park was reopened after a three year hiatus by a public company, Canterbury Park Holding Company (CPHC).  The main shareholders of that company, the Schenian and Sampson families, are owners and breeders of racehorses.  Running Aces Harness Park was opened in 2008 by Southwest Casinos, a now bankrupt casino operator.  From the very beginning it was apparent that they were betting on the come that racino legislation would be enabled.  Just the way that the construction was done and the card club floor was laid out it was apparent that this property was built to be more than just a racetrack.

As the past four years have shown, there was a decided difference between the intentions of the ownership groups at the two racetracks for any alternative gaming revenues.  Canterbury Park was intent on working with the horsemen’s groups to provide as much of that money for purses as was possible.  Running Aces intention, after the bankruptcy of Southwest Casinos and the takeover by a private equity firm, was to retain as much of the money for management as possible while providing comparatively little for horsemen.  This fundamental difference simmered under the surface of any racino discussions and always remained a bone of contention.  Ultimately this was proven out by the rejection by Running Aces of having the Tribes operate the racinos with money being funneled into purse accounts.

Once the decision was made that having Tribal operators run the racinos was a non-starter for Running Aces, the politicians advised Canterbury to talk to the SMSC and see what could be worked out.  Whether or not they gave the same advice to the harness track is unknown.

Following Sampson, Running Aces spokesman John Derus stepped to the microphone to outline his objections to the deal.  He said that the money was outrageously high since it cost only $77 million to build Canterbury in 1984; that now Canterbury was an adversary in their pursuit of a racino; that it just wasn’t fair.

Fairness was a theme that ran through the testimony of politicians that supported Running Aces and the employees that testified at the hearing.  Oh, and the single harness horseman that spoke against the agreement – I couldn’t tell you if there were any others there.

“They got theirs so where is ours?” could have been the testimony.  It wasn’t fair that the Commission side with Canterbury.  It wasn’t fair that they were getting all this money and we aren’t.  It’s just not fair.

The fact is that Running Aces would never approve an agreement like the one Canterbury did because there is nothing in it for track management. ALL of the $75 million of the SMSC/Canterbury agreement goes to purses.  An additional $8 million goes to joint marketing efforts.  ZERO goes to track management.  CPHC will have to make money the old fashioned way: they will earn it by making a go of the racing product now that they will have a quality product to sell.

Jeff Hilger, President of the Equine Development Coalition of Minnesota, testified that he would work on a similar deal for Running Aces with everything he had in him.  The reality is: they don’t want that deal.  They want the money.  They want racino and they want the majority of the money that doesn’t go to the state in their pocket, not their horsemen.

State Senator Pat Garofolo tweeted during the meeting: “Racino is dead.  Anyone says otherwise is trying 2 sell you something. I chief authored it last session and even I won’t vote 4 it now.”

In the face of these realities, Canterbury Park cut a marketing deal that literally saves thoroughbred racing in Minnesota.  Running Aces racing secretary said that patience is still needed for racino, that it took 25-years where he came from in Ohio.  Thoroughbred racing in Minnesota had a maximum shelf life of two years without this agreement. Dick Day, lobbyist for Racino Now, said that they were “this” close to passing, maybe it’d take another five years, but it would happen.  I guess to a paid lobbyist what’s another five years?  To those that make their living out at Canterbury that would have been four years too late.

HBPA President Tom Metzen put it best when he said, “This agreement isn’t any different than the University of Minnesota accepting money from the Tribes to build a plaza outside of the football stadium.  If Coke-Cola wanted to give us $77 million to sponsor racing for the next 10-years we wouldn’t even be talking about this, but applauding it.”

Running Aces is free to pursue racino legislation unencumbered by the restrictions on their potential profit by Canterbury Park.  They are certainly free to cut a deal with another Native American Band similar to Canterbury’s with the SMSC.  They can do what they want to do now and best of luck to them, I guess.  I wish the best for their horsemen, who seemed to be in short supply yesterday which speaks more than any testimony that could have been given.

As I tweeted yesterday (@tlgrevelis), now it’s time for the heavy lifting to begin at Canterbury.  The story has really only just begun.  The playing field is level. The marketing dollars are there.  Now it’s up to the track and horsemen to write the success story.

Tribe & Track Join Forces to Propel Minnesota Racing

Minnesota Thoroughbred racing just got a bit more interesting.  On Monday,  Canterbury Park signed an agreement with the Shakopee Mdewakanton Sioux Community (SMSC) that provides security for the Community by way of Canterbury forgoing any lobbying for a racino (and agreeing to assist the SMSC in fighting other off-reservation gaming) in exchange for purse enhancement funds totaling $75 million dollars over 10-years plus another $8.5 million in marketing dollars to support join marketing efforts.

There are several wins here.

-        Horsemen.  The money provided goes direct to purses.  2012 will see an increase of about 35% in total purse money while 2013 may see another 25 – 30% increase or more.  The funds are staggered so the first year's payment (2012) is the lowest with the payments topping out at $8 million for each of the last 4 years.  State bred maidens will run for $25,600 now while the Lady Canterbury will go back to $100,000 for the first time in years.  Could a graded stake be too many years away?

-        Racing.  Purses won’t go insane here.  You won’t see $5,000 claimers running for $25,000, but you may see open allowances worth $35,000.  You’ll see the entire stakes calendar be black type races. The track has been able to do well drawing trainers and owners because of the fabulous relationship between backside and front.  Add competitive purses to the mix and it is going to be tough to find stall space.

-        Breeding.  It’s going to matter to have a MN bred again.  The small foal crop and increased purses makes for a perfect storm for the few folks that will have good quality MN breds hitting the track the next couple of years.  The money will be there for the taking.  Higher quality broodmares should start entering the state and when mated properly and the right amount of luck, should start producing higher quality horses that will be able to win anywhere.  Exactly where we want our breeding industry to end up.  I want to see a MN bred in the gate at the Breeders’ Cup by the end of this marketing arrangement!

-        SMSC.  The Community no longer has to spend millions for lobbyists to fend off the racino folks. With Canterbury out of the picture that train should really lose steam.  With a protected flank, the Community can now focus on other matters.

-        Shakopee/Prior Lake.  Your gambling destination resort in the Twin Cities.  Spend a day at the races and a night at the casino.  The track could conceivably now send its best bettors (and there are quite a few of them) to Mystic for a night to sample what the resort has to offer.  Additionally, the casinos can send folks over to the track for a reserved table and day of racing.  The possibilities are limitless and the local communities will benefit.

It’s not all peaches and cream for everyone, though.  There are some that find themselves on the outside looking in.

 

-        State of Minnesota.  The state actually will benefit a bit by this.  Keeping  the racing industry vibrant and growing, rather than declining, will attract more jobs, but their big money would be have been made by a racino so the state loses out on the possibility of $100 million plus a year.  Frankly, the agreement is a much better solution for racing and personally I love the cooperation between the Community and the track, but the state coffers might not think so.  Thank your rep if you’re upset about this one.  After 10+ years, it was time to take no for an answer.

-        Running Aces.  The harness track is left out of this picture.  It makes sense in a way – why would the SMSC care what happens in Columbus?  The fact is that even when Canterbury wanted racino, the views of how it would be implemented varied greatly between the two race tracks.  Canterbury wanted the majority of the money to be committed to purses while Running Aces wanted the majority of money to go the track operators.  You can’t blame them, they were built by a casino company and owned by private equity, but they were built on a bet on racino being legalized and lost.  Canterbury has been a vibrant piece of the business community in Minnesota for over 25 years – in fact was the first legal betting destination in the state.  I would suggest that Running Aces talk to the Mille Lacs Band of Ojibwe, the owners of Grand Casino Hinckley, and try to reach a similar accord.  I would be surprised if agreement can be reached, however, if the operators of the track insist on a chunk of the money for themselves.

Ultimately though, this is a win/win.  Racino was never going to pass.  There may have been glimmers of hope to further other agendas from time to time, but ultimately it was not going to happen.  This type of cooperative arrangement is perfect.  Racing gets a legitimate shot to succeed which is all it can really ask for. 

Of course this agreement is only the beginning.  More trainers need to be recruited and, perhaps more importantly, simulcasting outlets need to be lined up.  I’m not talking about in state (though why say no to that?), but places like TVG and various OTB outlets around North America.  What will be happening at Canterbury is going to be significant and the product will be very sellable – it needs to get sold.  The more locations that the signal is shown the more the racing product is bet.  The product is going to be betable, let’s get it out there.

Breeding can now be done with a level of confidence that did not exist for the 2012 breeding season. You can bet that Minnesotans will be out to the various sales this summer and fall to start rebuilding broodmare bands.  Those of us with older racing mares will have to take a hard look at pedigree and racing record and determine if the shed might be in their future.

We’re on the verge of very exciting times for racing in the North Star State.  It won’t be overnight but the future is bright thanks to Canterbury Park management and the leadership of the Shakopee Mdewakanton Sioux Community.  Now it’s time to step up and seize the moment.

Racino Bill in Play in Minnesota

As those of you that follow this blog know, I had recused myself from any mentions of the Racino legislation here in Minnesota because of my position at IGT and a possible conflict with the Tribes I serviced here. Interestingly enough, right about the time I was laid off a former customer complained about me just owning a racehorse is a conflict of interest. If he had bothered reading more than the one post highlighted by Racino Now in on their website (in which I did not mention the racino at all, by the way) they would have seen that I was adamant in the past about making sure I stayed very clear of the issue. Even now, I am planning on being as fair and unbiased as I can be but it’s become apparent that without the conflict of interest in my way I cannot write a blog covering our horses and Minnesota racing and not mention the racino bill.


On March 21, Sen. Dave Senjem (R-Rochester) introduced the latest incarnation of the racino bill. If by that you infer that this isn’t the first time around the block for this type of legislation, you inferred correctly. This would be try number six, if I’m not mistaken. The difference this year? Primarily that the beneficiary of the funds would not be a Vikings’ stadium, education or the general fund but earmarked for the Minnesota Future Fund to be run by the Department of Employment and Economic Development. Don’t know it? It’s because it doesn’t exist yet. DEED will be charged with investing that money in Minnesota businesses to create jobs. According to bill cosponsor Sen. Claire Robling (R-Jordan), “General fund money is short right now, but the best way to get that fund back is jobs, and that's what we need.”

The value to the racing industry is obvious. Higher purses which would lead to more horses coming north to race and being bred in the state thereby stimulating the supporting agricultural based industries like feed and hay suppliers. The industry itself would draw more stables north for the summer with the attraction of higher purses. More horses mean more trainers, grooms, blacksmiths, veterinarians all paying taxes, renting rooms, buying food and generally supporting the regional economy around the Twin Cities. As owners, we too would benefit if we are able to finish in the money enough. The possibility of actually breaking even or making money now becomes more realistic for all involved.

There is, of course, opposition to the bill. For more than a decade, Native American Tribes have owned a monopoly on gaming in the state, operating 18 casinos around Minnesota and they are actively opposed to the expansion of gaming. John McCarthy, Executive Director of the Minnesota Indian Gaming Association, told the St. Paul Pioneer Press that there should not be an expansion of gaming in a mature market. Ultimately what it is would be a threat to their monopoly, mostly in the south (Mystic Lake, Little Six, Treasure Island) as well as to the Milles Lacs Band of Ojibwe’s facility, Grand Casino Hinckley, whose access to Twin Cities’ traffic going north would be interrupted by Running Aces Harness Park.

A lot is going to need to be worked out to get a bill passed and signed. What percentage of the revenue goes to purses, the state, the track owners? Who will buy the machines? How will the licenses be granted? What about the economic impact to the Tribes (you can say it doesn’t matter, but when they start laying people off…it’ll matter)? I don’t see Fortune Bay or Grand Portage Casinos being affected one iota by this plan, but you can bet that the casinos I mentioned above would be affected in some way shape or form. Is there any way to mitigate that or should there be at all? Should it be all about competition and capitalism?

I can see both sides of the issue and, in a future post, I may elaborate on a win/win for both parties that a friend of mine and I talk about quite a bit over coffee, but that’s for another time. The groups of folks that I cannot identify with are the wailers about how expanded gaming is the death knell for society. Casino gambling exists in Minnesota already in a big way. Additionally, the gaming expansion being proposed is for facilities that already allow gambling – horses AND card based gambling. No one is reinventing the wheel here, so please put away the holier than thou sanctimonious arguments about the end of the world as you know it. It’s not. If you don’t want to participate in it, don’t go, but don’t claim that it’s ruinous to have gambling where there is already gambling.

I plan to attend as many of the hearings on this bill (and any others should they pop up) as I can and I’ll let you know what I see and hear as well as my impressions on the issue as things develop.

Opening Day 2009 - Canterbury Park

Last season's opener was Derby Day and it was bright and sunny and packed to the rafters. This year was a Friday night under the threat of rain... When I got to the track about 30 minutes before first post, the parking lot looked like a typical Saturday. Decent for a Friday night, but not great for a season opener. More of the same once I got inside - a nice crowd, but nothing special. There was a glimmer of hope from the south as there was a line of clearing that looked like it wanted to come our way. Maybe if we could get some of that it could help save the night a bit?

Entering the track I went right to the paddock, located just inside the main gate to the right, for the first race. There was certainly an air of exuberance. Friends were greeting friends they haven't seen since last season and after an extended off season, everyone was happy to be back racing.

The first race went off as scheduled and as the final horses moved into the starting gate, the crowd started applauding and went the latch sprung and track announcer Paul Allen began the call there was whooping and hollering from the growing crowd - we were back in action!

Dean Butler piloted the first winner of the meet, the Mac Robertson trained 3-5 favorite Mister Merz. Merz is stablemate of Rebel Stakes (G2) winner Win Willy and carries the colors of the Jer-Mar Stables. There was a sad note to the open festivities as Golden Prancer broke down in the turn for home. Jockey Adolpho Morales was unseated but thankfully unhurt as was the jockey of Erinn and Aaron, B.L. Hollingsworth. Golden Prancer was vanned off the track. The celebration of the first race of the season was a subdued one.

Fortunately the second race featured a great comeback by a big favorite in a stretch run that took up every stride to the wire. Five to one Crossing Guard tried to take the field wire to wire and built up a 10+ length lead entering the stretch. Even money favorite, Ma Barker made her move under Juan Rivera and started to chop into that big lead with every stride. As the wire got closer, so did Ma Barker. The crowd was really worked up by mid-stretch and as Crossing Guard's stride shortened, I'm sure the wire seemed like it would never come for Dylan Williams. When they finally crossed it looked like she had hung on...until the instant replay. Maybe Ma Barker DID get there? After what I'm sure was an agonizingly long wait for the photo (been there!), Ma Barker indeed got the win and the place went nuts saluting a very game filly winning her first race since her maiden at Turf Paradise. The first Daily Double of the season: $6!

The chalk parade continued in the third as Tahitian Queen romped keying a $15 pick 3! Wow... The upside for me in this race? Tahitian Queen was ridden by Jose Ferrer who is picking up the mount on Fizzy Pop in Sunday. More on that in the next post later today.

Finally, in the 4th, it was bombs away as Engaging Lover blew up the tote board at 25-1 for Harvey Berg and jockey Luis Medina. Bernell Rhone's comebacker Belicheck - off over a year until his start at Tampa a few weeks ago - combined for an exacta payout of over $300. Amazingly enough, a husband was telling his wife behind me - "I told you! I told you!" The feeling of KNOWING regarding a 25-1 shot. Rarely happens, but when it does...

Finally my stomach started to remind the rest of my body that it was dinner time. At Canterbury Park, choices abound. On the main level there are two main bars - one near the top of the stretch, the other just past the finish line. These bars bookend a snack bar, pizza and pasta and a Mexican stand as well as a small restaurant inside the card club. The fabled Canterbury Nut Lady also operates her stand as you head up to the Mezzanine.

As you head up the escalator, there is a Famous Dave's BBQ stand, another snack bar and a shout out to the "Great Minnesota Get Together" (below) - many of you would probably call it our State Fair - where you can get fries, foot longs and, of course, Pronto Pups (corn dogs to the rest of the world)!

Finally, upstairs in the Clubhouse (below) is another snack bar, the Clubhouse Buffet and the Park Restaurant. Choices for literally every taste and budget. I went for a slice of pizza which was better than any "venue" pizza you've ever had - and plenty of pizzeria's as well!

Dinner leads me in to the 'specials' that are run at Canterbury. Each racing day, from Thursday to Sunday has a theme attached to it. Friday nights are Minnesota's Finest Happy Hour with live music on the apron, 1/2 price pizza, drink specials and contests. Saturdays are Classic Saturdays with Classic Cars on display, a giveaway, other food and drink specials and a $10,000 Pick Six pool guarantee. Sundays are Pepsi Family Day which features pony rides, face painting, a petting zoo and a kids "Race the Track" after the final race. When Thursday racing returns in a few weeks it'll bring the return of buck night which is just as it implies: $1 admission, $1 hot dogs, $1 Pepsi, $1 nachos, beer specials and a "Who do you like today contest?" with the prize of a $20 win, place, show wager. Solid daily promotions, good, affordable food and exciting racing action - a definite winning recipe.

There is also something else about the crowd at the Shakopee oval - it's young. There were plenty of twentysomethings and thirtysomethings around as well as families. These days this is an anomaly when you head out to the racetrack. Maybe it's because we're a summer meet? Maybe because we run in the evenings during the week? I went ahead and asked a group of younger folks sitting behind me what their reasons were for picking the racetrack. The number one answer was fun! This was followed by the excitement of wagering and, interestingly enough, the puzzle of trying to figure out a race and the feeling you get when you nail one. They all agreed as well that it was an inexpensive night out. Five dollars in, inexpensive food (if you stick with the specials) and you control your wagering budget. They can all hang out together and make a lot of noise and pit their skills against each other. It was a mighty encouraging conversation. I don't know if we're unique in Minnesota, but it would be nice to see this trend spread throughout the country.

I was fortunate enough to run into old partner Brian (of Somerset Sam and Somerset Wish fame). It was great catching up with him and a special congratulations on his engagement to longtime girlfriend Andrea! It was also fortunate as my choice for the 6th race, Henry the K, ran off the board. We got so caught up in talking, I never placed the bet. So thank you, Brian!

In the finale of the evening, a Minnesota bred Maiden Special Weight contest, partner Janet Weber (breeder of Miss Belle Express) had a homebred running, Tahkodha Bill. Bill had a bought with seconditis last year and was trying to break that streak on his return. While it didn't happen (he was placed 3rd after being interfered with in the stretch), it was great to catch up with Janet and her entourage: Linda, John and Vickie. John and Vickie also are partners with Janet in the filly Standing Rock who races Sunday in the 3rd, just before Fizzy's race so we'll be there to root them on!

The final attendance figure was 7,482 which was significantly less than the 10,000 plus in attendance last year, but a chilly, overcast, very windy Friday night with the chance of rain and thundershowers I'm sure kept plenty of folks away. Also, last year was Derby Day, sunny and warm after a long cold winter and most of the Spring. It's very difficult to make any kind of fair comparison. It'll be interesting to see how today's attendance compares with a sunny forecast and a very interesting Preakness Stakes to wager on. I don't know if we'll see 10,000, but I think we'll see more than in the opener.

For more on Canterbury's opener, see Jim Wells official Canterbury blog.