A 10-year agreement reached in early June between Canterbury Park and the Shakopee Mdewakanton Sioux Community is neatly billed as a “cooperative marketing agreement.” To be fair, the agreement involves marketing as the racetrack operation and the Mystic Lake Casino owners will work hand in hand to promote each other.
But the agreement does far more than target marketing. In essence, the $75 million from the casino and a separate $8.5 million for joint marketing efforts have bought Canterbury’s silence when it comes to racino.
Racino is the long-running proposal at the state legislature that would introduce slot machines at the two state regulated horse tracks — Canterbury and Running Aces Harness Park in Columbus, just outside Forest Lake. The tracks have lobbied for years to allow a racino, but with little progress as anti-gambling forces and the Indian gaming lobby have pushed back hard.
The deal reached on June 4 with little or no advance public knowledge also swept through the Minnesota Racing Commission two weeks later. Behind a 5-3 vote by the commission, the agreement was approved.
Was more scrutiny on the state’s part warranted in light of a multi-million dollar contract? Did the Shakopee Mdewakanton Sioux Community deal involve the same vetting that would be needed in any other merger of a state-regulated entity? A merger involving any public utility would take months of vetting and hearings, far more than the two weeks that the racing commission took.
John Derus, who serves on the Running Aces board, has asked a pertinent question: “Is Canterbury still Canterbury or a quasi Indian gaming casino?”
The agreement has made the racino hill even steeper to climb. Under the pact, Canterbury Park will no longer push for a racino and will lobby against any legislative proposals for a racino.
The relationship between the two racetracks has been weak at best and the deal with the Shakopee Mdewakanton Sioux Community shattered what was left of track partnership.
Imagine Running Aces and Canterbury Park as a tag-team in wrestling taking on the powerful Indian gaming tag team. Racino is the championship belt. As the wrestling match reaches a key point, Running Aces takes a sucker punch from its partner and crumbles as Canterbury swings the match to the champs. The victors and Canterbury Park walk off slapping each other on the back as Running Aces sits stunned in the ring wondering what just happened.
Call it a smart business move or a sucker punch, but the result remains — Running Aces was dealt a bad hand.
There is no question Canterbury will benefit. Purses have gone up, the horse industry benefits and there will be more people headed to the track. The Shakopee Mdewakanton Sioux Community can rest assured that its strongest opponent in the racino debate is now silent.
Running Aces will be left to soldier on alone with the slim hope that the racino question won’t be pulled from life-support at the capitol. Derus pledges that Running Aces will continue to seek slot machines, a move that would double the size of the facility and increase the track’s 500-employee workforce.
If Running Aces has one hope it lies with the fact the state still has a budget hole to fill and no means to fill it beyond taxes. Even with Canterbury gone from the racino picture, Derus says Running Aces could generate $50 million a year in state tax revenue and boost property taxes from its expanded facility. It’s not chump change and is a revenue pool the state may need.
There is also the possibility that Running Aces could form a partnership of its own with one of the northern tribal gaming concerns. But with the track having its best year to date, there is no signal that will be attempted.
It is the opinion here that the Canterbury-Mystic Lake agreement came to be without the detailed study and review necessary for any merger involving a state-regulated industry. What we are left with is a state-regulated racetrack that is now tied at the hip with a non-taxpaying monopoly that has neither an obligation nor reason to show its books to the state.
It is an agreement that is rife with potential for conflict of interest.
An ECM Editorial Board editorial. The Stillwater Gazette is part of ECM Publishers, Inc.