Aces, Canterbury embroiled over payments
Minnesota Racing Commission to meet Thursday in Columbus regarding request to revoke harness park’s license
The Minnesota Racing Commission (MRC) will meet Thursday, March 7, regarding one of two current disputes between the metro’s two horse racing tracks.
Specifically, the commission will hold a work session at Columbus City Hall in order to hear the North Metro Harness Initiative’s (NMHI) response to a request by the Minnesota Horsemen’s Benevolent & Protective Association (MNHBPA) to revoke Running Aces Harness Park’s operating license.
The matter began in November, when NMHI, which runs the harness park in Columbus, filed suit against Shakopee’s Canterbury Park and MNHBPA, the representative body of Canterbury’s horsemen.
In the suit, which is under advisement by Judge Ronald L. Abrams of Hennepin County District Court following a Feb. 4 hearing, NMHI alleges that MNHBPA breached conditions of a 2005 joint agreement. Thus, NMHI board member John Derus said this week, Running Aces should no longer be subject to part of that same agreement which requires it to give 3 percent of its card room retention to MNHBPA for the purpose of bolstering purses at Canterbury.
Assurance of that donation, which equates to about $600,000 per year, was central to the MRC’s 2005 approval of NMHI’s license. The commission originally rejected the new park’s application, citing among other concerns the projected negative impact on business at Canterbury.
Attorney Cort Holten, who represents MNHBPA, said Running Aces stopped sending payments in August. At the Feb. 4 lawsuit hearing, Holten motioned for the case to be dismissed or sent to arbitration.
In the eyes of NMHI, Derus said, the agreement became null and void last year when Canterbury secured $75 million for its purses in a deal with the Shakopee Mdewakanton Sioux. The Sioux operate Mystic Lake Casino and sought to end the race track’s efforts to lobby for racino legislation.
“Part of the agreement was we’d both lobby and play for the racino project,” Derus said. “When they accepted the money, they then nullified the agreement.”
Derus said the fact that the payment deal was necessary for Running Aces to gain a license is an example of how Canterbury has too much sway with the MRC.
“They’ve always been opposed to us, and made it difficult to be in business,” Derus said.
Holten, meanwhile, feels that NMHI’s decision to stop making the payments is a violation of state law. He cites a state statute that provides for revocation of a license for “failure to perform material covenants or representations made in a license application.”
“Running Aces clearly and repeatedly made a ‘representation’ to commissioners and to the MRC by promising to supplement Canterbury purses as part of a ‘deal’ to get their application approved,” Holten wrote in his revocation request to the MRC. “This representation was not just material; it was critical to the MRC decision, as evidenced in the record.”
Holten referenced a MRC meeting in December of 2004, the minutes of which show that NMHI’s Jim Druck said the sides had discussed a three-year proposal but that NMHI was willing to make the contribution a perpetual agreement “to insure that the money would always be there.”
Holten presented his case to the MRC at a Feb. 7 work session.
“[NMHI] is fully able to keep the promise it made back in 2004 and is willfully refusing to do so,” Holten said at the meeting. “For the racing commission not to take action in the face of that would cause the public to question why you are here. I mean, they are rubbing their thumb in your face and in our face.”
Today’s meeting in Columbus will provide NMHI a chance to respond to the license revocation request. The MRC is not allowed to take action at work sessions, so the format will be discussion-only. The meeting starts at 4 p.m., and city hall is located at 16319 Kettle River Blvd.
Running Aces and Canterbury are simultaneously embroiled in debate following the expiration of their simulcasting agreement. As of Feb. 19, each park now simulcasts only events involving the breed that races at its own facility: thoroughbreds at Canterbury and standardbreds at Running Aces.
The agreement has been renewed without incident for five years, but Running Aces now desires to remove a provision requiring it to pay Canterbury approximately $150,000 a year. This is separate from the fees each simulcastor pays to the race tracks from which the signals originate.
“This $150,000 net amount is not in any way connected to supporting horse purses,” said Running Aces General Manager Bob Farinella in a statement. “Canterbury Park provides no services or products to Running Aces for such payment. It is simply a subsidy extracted by Canterbury Park to benefit its bottom line.”
Derus said this payment to Canterbury is another case of something NMHI originally agreed to only because it had no choice.
“They’ve been picking our pockets since we’ve opened the door,” he said. “It’s got to stop now, and that’s what we’re trying to do.”
The MRC last month heard reports from each side on the impasse’s economic impact on the industry, but Chair Jesse Overton expressed a desire for the board to otherwise stay out of the ongoing dispute.