Sioux gain major role at Canterbury in pact

  • Article by: MIKE KASZUBA , Star Tribune
  • Updated: June 27, 2012 - 12:10 AM

Agreement details unprecedented presence of Mystic Lake Casino owners in horse-racetrack operations.

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Canterbury Park in Shakopee, Minn.

Photo: Kyndell Harkness, Star Tribune

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The new agreement between the Mdewakanton Sioux and Canterbury Park goes beyond having the tribe increase race purses in exchange for the track dropping its push for racino -- it gives the Sioux a major presence at the state's premiere horse racing venue.

As details have emerged, the agreement gives the tribe consulting rights on the racing schedule, a limited ability to review Canterbury Park's books and -- unlike the track -- rights to terminate the agreement without cause subject to a "wind down" payment. The tribe's hotel at the nearby Mystic Lake Casino is named the track's exclusive casino hotel and the Sioux get naming rights to the winner's circle and, likely, the track's music stage.

The 24-page agreement, which was recently approved by the state racing commission, details how the tribe will have a heavy marketing influence at Canterbury Park.

As the tribe funnels $75 million into the track's purses over the next decade, the Sioux will be able to promote Mystic Lake at the track with a minimum of 25 electronic messages daily and "exclusive promotional opportunities" on at least five indoor plasma displays. The Sioux, which will handle all media buying as part of an $8.5 million marketing payment, will also produce a 10-second TV commercial on the new partnership that will be shown between every race.

In addition, the tribe will get stock appreciation rights to 165,000 shares of Canterbury Park stock, which a Sioux spokesman said was a "relatively small" part of the agreement and does not give the Sioux an ownership stake.

The agreement leaves unclear how the Sioux, a sovereign nation, will interact with the state racing commission, a public body that regulates horse racing.

"What influence do they have in the management of Canterbury? [I] would be very comfortable saying the answer to that is little to none," said Randy Sampson, the president and chief executive of Canterbury Park. But the new agreement "does have issues that will require approval by them, or require us to work with them."

While Sampson said the Sioux will have "naming rights to several large racing days" and will "have a right to ask questions or request we consider other alternatives" related to that, the tribe has "no ability to tell us what races to write [or] what types of horses we want to recruit."

Willie Hardacker, the tribe's legal counsel, likewise minimized its influence at the track.

"The tribe will have no input in the general operations of Canterbury Park," he said. "When you say the tribe can look at the books, we're talking specifically about purse supplements. We will not be looking at their books, generally. "Signage," he added, "does not translate to influence."

Though Sampson and the Sioux downplayed the agreement's impact, others said it had ramifications that may not yet be known.

"The marketing presence of the casino will be significant" at the track, said Mark Ethen, a racing commission member who voted against the agreement because he said he wanted more time to study its impact. The tribe "will become, I think, pretty engaged partners."

Ethen added that the state's racing commission will be "in a very awkward place" should Running Aces, the state's harness racing track in Anoka County that already offers some gambling, push a "perfectly legal" plan to expand gambling and the Sioux and Canterbury Park oppose it.

Under the agreement, Canterbury Park will not lobby for expanded gaming in Minnesota and -- should gaming be expanded by the Legislature -- will not feature any of the new gaming at Canterbury Park. Sampson said that while the agreement might require that "I would appear to testify" against expanded gambling, it would not force him to hire an "army of lobbyists to go fight it."

Even though the so-called racino proposal to allow slot machines at the state's horse racing tracks appeared to be going nowhere at the State Capitol, some industry observers said there may have been a reason the Sioux chose now to enter into the agreement. The reason: The recently passed legislation for a new Minnesota Vikings stadium.

The state's share of the Vikings stadium's cost will come from allowing electronic bingo and pulltabs in Minnesota's bars and restaurants, a funding source critics said may fall short of projections and lead legislators to look for another alternative. "There's no doubt" that may have motivated the Sioux, said Dick Day, a former Senate minority leader and now lobbyist for Running Aces, which opposed the agreement.

"People are going to say, 'Hey, you know, we need some money here to help finish this stadium deal,' " he said.

State racing commission chair Jesse Overton said it remained to be seen how much of a voice the tribe has with the agreement. "I don't have the answer to that today," he said, adding that only the Sioux and Canterbury Park knew for sure.

But Overton said the Sioux had an "extremely fine track record" on gambling, and then he went a step further, adding, "I would have no problem taking an application from them for a [horse racing] license tomorrow morning" as long as it was permitted by federal law.

The tribe's new input at the race track can be seen in the agreement's section on "signage messaging, production and placement."

Mystic Lake will "maintain dominant signage" at the grandstand entry and exit, will be the exclusive sponsor of a new race results board and will have a Sioux-Canterbury Park joint marketing message on the daily race program' back cover. Up to three exit signs from Canterbury Park on County Road 83 -- the road leading from the track to Mystic Lake -- will include advertising for Mystic Lake, according to the agreement.

Jim Lane, a business lawyer who also serves on the state racing commission member, said the agreement was not particularly unusual, especially since the tribe and racing track had been "intense competitors" over whether the state should expand gambling. "They probably didn't want to leave a lot unstated," said Lane, who voted for the agreement.

Dan Erhart, a state racing commission member who voted against the agreement, said the deal has a larger impact. "It continues the major influence that the Native Americans have on the decisionmaking process in Minnesota," said Erhart, who is also an Anoka County commissioner.

Mike Kaszuba • 651-222-1673

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    The agreement between Canterbury Park and the Mdewakanton Sioux, the owners of Mystic Lake Casino, has the tribe funnel $75 million to racing purses in exchange for the track abandoning...

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