Gov’t Shutdown Could Cost Canterbury Millions

If a government shutdown occurs at the end of this month, Canterbury may be forced to suspend substantially all operations-a move that would cost it more than $1 million per week in lost sales.

The looming government shutdown facing the state could mean millions in lost revenue at Canterbury Park in Shakopee, which is preparing for the worst as it enters into its busy season.

The park's operations are regulated by the Minnesota Racing Commission (MRC), a state agency that recently received layoff notices from the government. It is possible but appears unlikely that the MRC would be deemed a “critical service” provider by the state and maintain minimal operations should a shutdown occur, and Canterbury can't keep its doors open unless the MRC is operational.

Provided that the MRC isn't named a “critical service provider,” a government shutdown would cost the park more than $1 million each week and force itto furlough its 1,000-plus employees, according to CEO Randy Sampson. Canterbury Park Holding Corporation, which owns the park, sent notices to employees on Tuesday, warning them about the possibility.

On Wednesday, Governor Mark Dayton released his recommendations about which state agencies should continue offering services with limited staff during a government shutdown and which should cease operations entirely. Dozens of agencies are on the suggested closure list, including the MRC.

Sampson added that the shutdown would be “particularity problematic” for the park over the Fourth of July weekend, which is typically the busiest weekend of the year.

Canterbury, which runs about 35 live horse races each week, would be forced to cancel all races under a shutdown. Sampson said that the horsemen currently stationed at Canterbury might stick around and wait it out for “a week or two” to see what happens, but they would likely go race somewhere else if the shutdown was longer and may not return this season.

There are currently about 1,400 horses at Canterbury that participate in live racing, and racers are not under contract with the park. Sampson said that if more than 600 leave to race elsewhere and don't return, the company would have to cancel the rest of the season, which ends in September. That would result in losses of about $500,000 per week until then. (Approximately half of the $1 million in weekly sales that Canterbury would lose in the event of a government shutdown would be from the park's gaming operations, which would resume after a state budget deal is reached and government operations return to normal.)

“[The shutdown] would be very significant for Canterbury and would be devastating to the horse industry,” Sampson said. “We could lose the entire remainder of the season.”

Dayton and the Republican-controlled Legislature have reached a deadlockover a projected $5 billion state budget deficit for the two-year period that begins July 1.The Legislature adjourned last month before a budget deal was reached.If Dayton and legislators can't agree on a budget by June 30, the lastday of the state's current two-year budgeting period, a shutdown wouldoccur.

Sampson said that the MRC is fully funded by horseman licensing fees and does not impact the state's general fund.

“It would be very unfair since the state general fund does not have to pay anything to support the racing commission,” Sampson said. “So it makes no sense that a government shutdown should affect us.”

Should the budget standoff continue well into July, Sampson said that the company will petition the court to classify the MRC as a “critical service provider” so that Canterbury can continue operating as usual.

Canterbury is among the state's 90-largest public companies based on revenue, which totaled $39.92 million in 2010.