The greedy getting greedier: Canterbury Park turns on Running Aces

[precisionk]

Here is an interesting read about two tracks close in my homestate:

http://kstp.com/news/stories/S2932754.shtml?cat=1


In Summary, The Minnesota Horseman's Benevolent and Protective Association which is based in Canterbury Park wants to revoke the racing license of Running Aces because according to them, the state granted Running Aces a gambling license few years ago with the stipulation Running Aces give 3 percent of its card table money to the thoroughbred owners and trainers at Canterbury Park Horse Track in Shakopee.

Take a read and see what you think.

Funniest thing I thought was they want to revoke the racing license of Running Aces which would essentially close Running Aces cause the card club relies on the racing to be legal. The same building that Running Aces is in that would be closed, is one of the Minnesota Racing Commission office.

For those that don't know, Canterbury Park last year made a deal with the Mystic Lake Casino Band of Ojibwe and will be getting $100 million to boost racing purses.

[foodog8]

You have this backwards. The private equity firm that owns RA are being total d-bags because they are jealous of the deal Canterbury made with the Shakopee Mdewakanton Sioux (SMSC). They are free to make a similar deal with a tribe nearer them, but they have no interest in purse supplements for standardbreds. They want to pocket the money.

Canterbury's $75 million (not $100) deal with the SMSC goes entirely to purses, and not to the Cby owners.

RA has inexplicably adopted a scorched earth policy in response. They are trying to renege on the card room deal with the MN HBPA, even though the agreement with the HBPA was a condition of their being granted a license to open in the first place. They also intend to end their simulcast agreement with Canterbury this week. So, no harness simulcasts at Cby, and no T-breds at RA.

Not sure why they want that, because 80% of wagering at RA is on T-breds, and the handle on harness simulcasts is higher at Cby than at RA. Makes no sense.

[foodog8]

Oh, and the MN Racing Commission has offices at both Canterbury and Running Aces.

Hopefully, RA will come to their senses and try to do something constructive for themselves and for harness racing in Minnesota. Their current strategy is idiotic and self destructive.

[Robert Goren]

With all that is going on in horse racing these day, as bettor I have tough time siding with the horsemen on anything. When horsemen groups start demanding an end to all the doping that exist today instead fighting even the smallest attempt to clean up the sport, I might be a bit more understanding.

[precisionk]

I am well aware both locations have offices, its just funny that one hand is trying to close the other down. I am well aware of the money goes towards the purses and not the owners.

I would imagine RA is feeling a bit left out as their supposed brother in arms took the cash and ran. I don't blame Canterbury, but I believe it will hurt them in the long run as when that money comes to an end, there is no reason for them to re-up. It was "hush money" to have them stop that multi-year long battle for getting racinos. So once that money ends, they will be back where they were plus 10 years removed from battle. Wouldn't you be mad if your partner sold you out for the money and left you with the bag?

There is no reason for them to make that deal with the tribe to the north because they already monopolize the card area for that region purely based on location.

Simulcast information I didn't hear about, but I can certainly get the info as I know the management at RA that run simulcast. I can't say I am terribly surprised though. RA wants to continue that racino fight where CBY's interests are mainly keeping their new suitors happy. Coming from a purely horseplayer perspective, CBY's deal with the SMSC has shunned quite a few of their longtime players purely on the fact that the tribe gets priority over seating and tables when it comes to racedays.

[foodog8]

Cby and RA were never really partners in racino lobbying. They were always at cross purposes. They were always arguing over how much of the racino proceeds would go to purses, and how much tracks would keep.

Also, Cby was spending about $500K per year lobbying for a racino, and RA about $20K. Not exactly equal partners.

There is zero chance that a racino would have happened within the next several years, and even then it would only have been after Cby spent additional millions in lobbying (assuming they and RA would have survived another 5 or 10 years).

There is absolutely no reason for RA not to pursue a similar deal - if they actually are doing it in order to boost harness racing purses. Obviously, they have zero interest in doing that. Actually, before the Cby-SMSC deal there was another tribe that reached out to both tracks, and were firmly rejected by RA.

As for the simulcasts, I don't see how their interests in getting a racino are served by blowing up that agreement. I'd be interested in hearing what the RA folks you know have to say on that. Litigate themselves out of business, blame Canterbury, then beg the legislature to bail them out? Obviously, blowing up the simulcast agreement is a big "f-you" to the horseplayers at both tracks.

RA is free to continue the racino fight on their own dime. Good luck with that. Cby had no moral obligation to destroy themselves by bleeding money forever for the benefit of RA. They did not "sell out" RA.

As for Cby horseplayers being angry because they are being pushed aside by SMSC VIPs, that is absurd.

[precisionk]

I agree that the racino wouldn't have had for likely years to come. They have fought it for so long and dumped a bunch of money into it. I'd like to know why the SMSC gave in, paying off Canterbury if they were so staunch in their defense so long. Too weary? Canterbury finally getting close? Who knows.

CBY has been in the fight far longer, but that is also because they have been around for decades while RA is still in its infancy. While increased purses are a great idea, does it truly bring more people to the track? Alot of examples out there where increased purses/casino money in general does NOT mean increased handle. My guess is RA doesn't want to have another chef in the kitchen. It's a business after all.

CBY didn't do any favors for the whole racino cause by taking that money. They are definitely playing short term in my opinion. What happens when that agreement is done? Back to square one. Maybe Canterbury needed that cash bad to keep them going? Once again, who knows.

I am all in favor of the racino in MN, not because what it can do for the tracks, but for the jobs it will create for people.

As for the Canterbury players concerning VIP's, it is 100% not absurd. Multiple occasions I had long time players come up to me, speaking their mind on the matter.

[precisionk]

And the sage continues...info update based on the simulcast agreement. RA holding its ground and Canterbury not willing to negotiate.

http://xwebapp.ustrotting.com/absolu...2376&zoneid=63

[traynor]

And what exactly does Mystic Lake get in return for its investment? Priority seating? That is some very pricey seating.

On the other hand, simulcast to Mystic Lake makes a LOT of sense. Oh, gee. No one has mentioned that yet? How strange.

[precisionk]

Originally Posted by traynor

And what exactly does Mystic Lake get in return for its investment? Priority seating? That is some very pricey seating.

On the other hand, simulcast to Mystic Lake makes a LOT of sense. Oh, gee. No one has mentioned that yet? How strange.

Basically, Mystic Lake paid off hush money to have Canterbury Park stop pursuing the racino. It's a strong belief that it still would have taken years for Canterbury to get close. Maybe the casino knew CBY was closer then they realized.

Simulcast does make sense there, it was part of the agreement. I haven't heard one way or the other on the status of them putting it in.

[traynor]

Originally Posted by precisionk

Basically, Mystic Lake paid off hush money to have Canterbury Park stop pursuing the racino. It's a strong belief that it still would have taken years for Canterbury to get close. Maybe the casino knew CBY was closer then they realized.

Simulcast does make sense there, it was part of the agreement. I haven't heard one way or the other on the status of them putting it in.

If they did, it would be a huge moneymaker. I am quite sure that I am not the only one who realizes that. I don't buy the "hush money" theory at all. This is fairly simple business--simulcast would be major step up for Mystic Lake. A bit of publicity beforehand can only benefit everyone involved.

[precisionk]

Originally Posted by traynor

If they did, it would be a huge moneymaker. I am quite sure that I am not the only one who realizes that. I don't buy the "hush money" theory at all. This is fairly simple business--simulcast would be major step up for Mystic Lake. A bit of publicity beforehand can only benefit everyone involved.

Here is the interesting thing with Minnesota casinos. There is no craps or roulette. When they created the law/bill/legal mumjumbo back in the day, those types of games were left out. This said law also gives zero money to the state. Casinos have always wanted to get those games, but fear legislation would try to tax those potential dollars, thus why any Minnesotan who loves the dice, needs to go across the border.

I would imagine Mystic Lake would take advantage of the simulcast, but I would have assumed they would have had that built and ready for this season. This they have not done. Maybe they don't want to dedicate the space.

[traynor]

Originally Posted by precisionk

Here is the interesting thing with Minnesota casinos. There is no craps or roulette. When they created the law/bill/legal mumjumbo back in the day, those types of games were left out. This said law also gives zero money to the state. Casinos have always wanted to get those games, but fear legislation would try to tax those potential dollars, thus why any Minnesotan who loves the dice, needs to go across the border.

I would imagine Mystic Lake would take advantage of the simulcast, but I would have assumed they would have had that built and ready for this season. This they have not done. Maybe they don't want to dedicate the space.

I think they can get a lot done in a very short period of time. What they would need more than anything is publicity, and attracting public interest. The nuts-and-bolts of setting it up take very little actual time.

While the laws of Minnesota are interesting, one of the things often overlooked is that tribal property is tribal property--not necessarily a part of the state or of the US. Basically, being a "sovereign nation" they are able to do a number of things that are otherwise illegal. That is, there are no non-tribal casinos in Minnesota (or a number of other places). The casinos exist on tribal property. Mystic Lake would make a great venue.

With all due respect to the slow and ponderous, in the real world the entire race book--tote machines, video, the whole thing--could be up and running in a week or two. All it takes is money and good management.

[foodog8]

RA notified Cby that they wanted out of the simulcast agreement last month, 3 days AFTER the agreement automatically renewed. What changed in those 3 days? Nothing. RA is "negotiating" in bad faith.

In their testimony before the MN racing Commission, Cby said they are willing to re-negotiate the agreement, but RA is not willing, nor are they willing to submit to arbitration. Apparently, RA considers the failure by Cby to accept a take it or leave it ultimatum as an unwillingness to negotiate.

The following paragraph in the RA press release is laughable:

"Running Aces has established a very strong and stable core business over the past four years. Unfortunately, the negative trend in simulcasting at Canterbury Park, which started well before Running Aces existed, continued at Canterbury Park, even though Running Aces business has been stable for the past four years. One could presume that the offering of all-breed simulcasting at Running Aces has contributed to Minnesota live racing purses to a much greater extent than would have been possible at Canterbury Park alone. In fact, Minnesota live racing purses will suffer without Running Aces ability to offer all breed simulcasting. "

It's true the simulcast trend at RA is stable, because it is horrible. From 2008-2011, the daily avg simulcast handle at RA is 19K, 24K, 24K and 24K. That 24K per day has mostly been cannibalized from what would have been the handle at Cby. When RA opened in 2008, the daily simulcast handle at Cby dropped from 147K in 2007 to 126K in 2008. Since then it has been 105K, 94K and 93K.

I love the "one could presume" language in the statement. They know it's BS, but use a term like that to fool people who have no knowledge of the numbers involved.

[foodog8]

RA exisits only because of its card room and the original investor's gamble that a racino would eventually be approved. Their original request for a license was rejected in part due to fears of the damage it would do to Canterbury (in effect, to turn one barely surviving racetracks into two failed ones).

It was obvious a second track in the metro area would take a chunk out of Cby's card room and simulcast businesses, and it has. The rake at the Cby is down about $4M, and the simulcast handle is down about $20K per day.

RA had to compensate Cby for the projected losses in order to be licensed. That is why the simulcast and card room deals ar ethe way they are. RA now wants to break those deals because of the SMSC deal for purse supplements at Cby. In other words, they don't think Cby needs the money any more, so they shouldn't have to pay.

This is the same as arguing that you no longer have to pay rent because your landlord hit the lottery.