Canterbury agreement deserved stronger vetting

A 10-year agreement between Canterbury Park and the Shakopee Mdewakanton Sioux Community (SMSC) reached in early June is billed as a “cooperative marketing agreement.” To be fair, the agreement involves marketing; the race track 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 on a 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 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 advance public knowledge also was OKed by the Minnesota Racing Commission two weeks later.

Was more scrutiny on the state’s part warranted in light of a multi-million dollar contract? Did the SMSC 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 hearings, far more than the two weeks that the Racing Commission took.

John Derus, who serves on the Running Aces board, has asked: “Is Canterbury still Canterbury or a quasi Indian gaming casino?”

The relationship between the two tracks has been weak at best and the deal with the SMSC shattered what was left of the 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.

There is no question Canterbury will benefit. Purses have gone up, the horse industry will benefit and more people will be headed to the track. The SMSC can rest assured that its strongest opponent in the racino debate is now silent.

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 employees.

If Running Aces has one hope, it lies in the fact the state still has a budget hole to fill. 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. That’s not chump change.

The possibility also exists 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, nothing suggests that path will be followed.

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 race track that is now tied at the hip with a non-tax paying monopoly that has no obligation nor reason to show its books to the state.

It is an agreement that is rife with the potential for conflict of interest.

This editorial is from the ECM Editorial Board. The Morrison County Record is part of ECM Publishers Inc.