Gov’t Shutdown Hurt Canterbury Q3 Revenue, Income
Just as Canterbury Park Holding Corporation CEO Randy Sampson warned, the state government shutdown in July hurt the company's net revenues and net income for the third quarter.
Net revenues declined 9.1 percent to $10.92 million for the period spanning from July through September, the Shakopee-based company-which operates Canterbury Park-said Friday.
The company also recorded a pre-tax loss of $298,357 during the third quarter, substantially larger than the $139,575 loss reported in the third quarter of 2010-but a tax benefit mitigated the loss and resulted in net income of $230,132 for this year's third quarter.
Canterbury Park offers live horse racing at its racetrack between May and September; year-round simulcasting of horse races; and a card club. The park's operations are regulated by the Minnesota Racing Commission (MRC)-a state agency that was forced to cease operations during the 20-day state government shutdown in July. The park also had to close during that period because the MRC must be operational in order for Canterbury to keep its doors open.
“Because the shutdown occurred during the heart of our live racing season, we estimate that Canterbury Park lost as much as $1 million in revenue each week,” Sampson said in a statement. “While it's impossible to determine the full effect of the shutdown, we do know that the financial impact was significant as the pre-tax loss of nearly $300,000 was the worst third quarter for Canterbury since our card room opened in 2000.”
Revenues from the park's card casino dropped 7.7 percent in the third quarter, and pari-mutuel revenues decreased 16.9 percent compared to the same period in 2010. Pari-mutuel refers to a betting pool in which those who bet on competitors finishing in the first three places share the total amount bet-minus a percentage that goes to those managing the race; it's the type of pool that Canterbury uses for its horse racing.
For the first nine months of 2011, Canterbury's net revenue was down 1.2 percent to $30.9 million, and its net income totaled $92,631-an improvement from a $1.2 million loss for the same period last year. Pari-mutuel revenues were down 9.5 percent and offset somewhat by a 2.3 percent bump in card club revenues, the company said.
After the state government resumed operations on July 21, a Canterbury spokesman Twin Cities Business that the park's leaders were seeking ways to recoup lost funds-and they did schedule some additional races, move traditional Fourth of July events to Labor Day, and extend the season past the traditional Labor Day ending. But Sampson said in mid-August that he didn't expect those efforts would have a significant impact on the company's bottom line.
In addition to discussing the impact that the government shutdown had on Canterbury, Sampson said Friday that the company will continue to advocate for racino legislation. A racino is a combined racetrack and casino, and such legislation would allow slot machines at Canterbury Park's racetrack.
“Studies have shown that a racino would generate much-needed revenues for the State of Minnesota, while creating a significant number of jobs in the racing, hospitality, and equine industries,” Sampson said in a statement. “A racino would also enable Minnesota's horse racing industry, which already employs several thousand individuals, to remain competitive and viable.”
Sampson added that Canterbury incurred “substantial expense” in lobbying for a racino during the 2011 state legislative session, and although that legislation was not passed, he believes those efforts have increased support for a racino among both the public and the state's lawmakers.