Canterbury racing against the times

C anterbury Park officials have been crossing their fingers this week, hoping the grim weather forecast for Saturday's opening day might give way to brighter skies.¶ They've been eyeing the storm clouds gathering over their sport for much longer. Horse racing facilities all over the country have reported declines in wagering this spring. The Shakopee track is among them. A troubled economy, increased betting over the Internet, a slowdown in the poker boom and a statewide smoking ban contributed to a 10 percent drop in Canterbury's revenues for the first quarter of 2008. That comes on the heels of a 16 percent decline in net income in 2007.

This year, the track also will face competition in the racing and card room business from the new harness track in Anoka County. Nothing, though, rekindles optimism in a horseman like a new racing season. Track president Randy Sampson said that a larger horse population, the return of the Claiming Crown and some strong new stables should make for a successful 67-day meet, and he plans to continue seeking ways to keep Canterbury viable in the long term.

"Everything is lining up for us to have a good live racing season," said Sampson, who enters his 14th season running the track. "The card room and simulcasting business will take some time to recover."

Continued Sampson: "The good thing about being down because of the economy is that the economy does recover. But I can't say there aren't still long-term fundamental issues we need to address. We do plan to be in this for the long run, and we will do everything to make racing as successful as we can. But it is getting tougher and tougher."

Many tracks are reporting downturns during their spring seasons, reflecting racing's nationwide struggles. Turfway Park in Kentucky saw its live on-track handle dropped 10 percent. Total wagering at Maryland's Laurel Park tumbled 17 percent. Several track owners lost money last year, including the New York Racing Association.

Nationwide, handle declined 0.4 percent in 2007 and has fallen in three of the past four years after a decade of growth. The poker business, Sampson said, is stagnant nationally.

The economy and the rise of at-home Internet wagering have affected all tracks. Canterbury also was hit hard by Minnesota's smoking ban, as card players who smoke migrated to Mystic Lake Casino, where smoking is allowed. The track's casino games revenue fell 25.8 percent in the fourth quarter of 2007.

Track officials also anticipate better racing. As of Thursday, 826 horses had arrived at Canterbury, more than the track had for last year's opening day. The number is expected to grow, and some fine new stables -- including that of Keith Bennett, the top trainer at Arizona's Turf Paradise -- will improve the quality.

"We've put a significant amount of attention into the product," said Eric Halstrom, the track's vice president of racing. "Our average number of starters per race will go up, and the Claiming Crown has brought some new horsemen. If we hadn't had such a good recruiting year, I'd be worried."

Halstrom said he doesn't expect Running Aces Harness Park, the new harness track in Columbus, to significantly affect Canterbury's attendance. It is a much smaller facility, and its live racing season ends July 6.

Running Aces is likely to cut into Canterbury's card room business when its 50 tables open this summer. It also will take a piece of the thoroughbred simulcasting pie; the harness track recently received legislative approval to simulcast thoroughbred races. Both Canterbury and Running Aces will simulcast today's Kentucky Oaks and Saturday's Kentucky Derby.

But Canterbury and its purse fund will receive a percentage of handle from Running Aces' thoroughbred simulcasts, as well as a share of Running Aces' card club revenue. Canterbury is scheduled to pay $10.3 million in purses this summer, approximately the same as last year. Sampson said money generated by Running Aces, as well as a slight reduction in the number of races at Canterbury, should keep the fund stable despite the revenue declines.

That will help in the short term. Sampson also is thinking of the track's long-term prospects and continues to seek solutions. He anticipates a renewed lobbying effort for a racino, off-track betting or other additional gaming over the next few years.

"I don't think we're going to see dramatic growth in poker or horse racing," he said. "To thrive long-term, we have to figure out a way to get additional gaming that will allow us to be competitive with other tracks.

"The industry is dramatically separating between the haves and the have-nots. The tracks we compete with -- The Woodlands (in Kansas City, Kan.), Remington Park (Oklahoma) and Prairie Meadows (Iowa) all have slot machines or are getting them. We don't, and it's going to get harder and harder to compete for horses."

Sampson also continues to work with real-estate developers in creating a plan for a retail, hotel and movie-theater complex on Canterbury's large plot of land. The sluggish economy has slowed the timetable for that development, he said, but it has not dimmed enthusiasm for the plan as a way for Canterbury to diversify.

The company's bottom line remains strong. Sampson said Canterbury has no debt, and its cash, assets and stockholders' equity all increased in 2007.

"Things are kind of scary in the industry right now," Halstrom said. "But we believe we're going to have a good meet. We're excited."