Running Aces laying off 10% of workforce

Ten percent of the employees at Running Aces Harness Park in Anoka County will be laid off, said the track's local owners, who also acknowledged Thursday that they are being sued for more than $10 million by two Oklahoma tribes.

Executives from Southwest Casino Corp., the Bloomington-based co-owner of the $62 million harness track and card room, said about 60 Running Aces employees will lose jobs in this round of layoffs, which has already begun.

The owners opened the track in April with the promise of more than 500 new jobs for their sparkling facility in Columbus -- and had 380 full-time employees and 140 part-time workers before the layoffs.

But Thursday, the owners cited their own miscalculations, an economy crippled by rising gas prices, a state law that did not allow the card room to open until 50 days of live racing had been completed, and near perfect summer weather that kept people outdoors and away from the card room as reasons necessitating the layoffs.

"We anticipated we'd suffer," Tom Fox, president of Southwest Casino, said of the statute that would not allow the harness track and card room to open together. He then added, "Given the economy we're in, to create that many [500] jobs in this environment is a positive thing."

"These aren't massive layoffs," said Jim Druck, Southwest's CEO. "We made mistakes, based on our experiences opening nine or 10 other properties."

A relationship gone sour

The charges were released last month by a tribal Supreme Court-ordered 30-page report by Grant Thornton, one of the world's top auditing firms. Southwest Casino denied all allegations and filed a countersuit, a $30 million breach-of-contract claim, against the tribes. The suit and countersuit were filed last year.

In a year when Druck and Fox each received 2008 Career Achievement Awards from the Oklahoma Indian Gaming Association, tribal Gov. Darrell Flyingman told the Star Tribune on Thursday: "They've lied to our people, they lied to me, they lied to our tribal leaders. They've survived so long by influencing people and giving them money."

In their legal filings, the tribes checked a box saying they were seeking in excess of $10 million. But the actual amount the tribes want could be closer to $30 million, Flyingman said Thursday. The tribes had the option to renew a contract that would have paid Southwest $6 million a year over five years to run their casinos.

Druck said Thursday that Southwest's contract to manage the tribes' casinos was extended by the tribal council, then overturned last year by the tribal Supreme Court.

Southwest seeks $30 million in its countersuit. It nearly matches the $31 million that Southwest and its harness track partner, MTR Gaming, each paid to start Running Aces Harness Park. But West Virginia-based MTR Gaming has reportedly put its 50 percent interest in Running Aces for sale.

But Southwest has had plenty to say about the tribes' allegations.

"It's their attempt to discredit us," Fox said.