Backed by a bipartisan group of Minnesota legislators, officials of the Canterbury Park racetrack on Wednesday announced their latest proposal for a state-sponsored casino at the track in Shakopee.
The plan, a bigger, somewhat more lucrative version of legislation that has been introduced repeatedly over the past nine years, would pay the state an up-front licensing fee of $100 million, which is half of the fee proposed for a rival state-tribal casino plan backed by Gov. Tim Pawlenty.
The Canterbury plan also is projected to yield $103 million annually, or $40 million a year less, for the state than the much-larger casino proposed by Pawlenty and three northern Minnesota Indian tribes.
But if legislators this year approve a new Twin Cities casino, the so-called "racino" at the racetrack has a better chance of passage in the House of Representatives, and perhaps in the Senate. Publicly and privately, legislative leaders said Pawlenty's casino and the Canterbury plan may be merged into one bill, and perhaps into one operation that would be built at the racetrack.
Pawlenty on Wednesday repeated the statement he made Friday that he was open to merging the two casino plans and constructing the state-Indian gambling operation at the track.
Two of Canterbury's top stockholders — Curt and Randy Sampson — said Wednesday they have not discussed combining the plans with the tribes. However, they said they would try to make that merger work if legislators insist on it.
"Everybody's going to have to take a little bit smaller piece of the pie," Randy Sampson said of a merger of the proposals. He is Canterbury's president. His father, Curt, is chairman of the board of Canterbury Park Holding Corp., the publicly held company that owns the track.
A market study performed for Canterbury by GVA Marquette Advisors, a financial consultant, warned that the profits projected for Canterbury's owners and the taxes projected for the state would decline if another new casino also is approved.
The three northern tribes also assume that multiple casinos would dilute their earnings. They are seeking a guarantee from the state that their payments to the state would be decreased if the Legislature approves additional casinos.
The state-tribal partnership proposed by Pawlenty would have 4,000 slot machines, plus blackjack, roulette and craps games, at a Twin Cities site still to be chosen. There are no plans for the three tribes — the Leech Lake, Red Lake and White Earth bands of Ojibwe — to seek reservation status for the casino.
The Canterbury plan calls for 3,000 slot machines. The proposed legislation, sponsored by Rep. Mark Buesgens, R-Jordan, and Sen. Dick Day, R-Owatonna, does not include roulette and craps. But Randy Sampson said Canterbury will seek those games if other casinos obtain them.
The Canterbury proposal includes a 5 percent tax on the racetrack's currently untaxed poker games.
Like the state-tribal partnership, the Canterbury plan calls for the slot machines to be operated by the Minnesota Lottery. That's because some courts have classified slots and other games of chance as lotteries, and the State Constitution bars any lottery unless it is operated by the state.
On a percentage basis, this year's Canterbury casino legislation offers less to the state than previous bills. A Canterbury bill that passed the House in 2003 would have given the state and the Lottery 55 percent of gambling revenue. This year, to accommodate an up-front licensing fee that Pawlenty sought, that state share, which includes Lottery expenses, was cut to 45 percent. In future years, the reduction in the state's share amounts to more than $20 million a year.
The big reason for the differences between the Canterbury payout to the state and the significantly higher payout predicted for the state-tribal partnership is the 1,000 additional slot machines the tribal plan includes.
The tribal plan assumes daily revenue from each machine of $295; Sampson said the Canterbury plan estimates revenue of $212 to $246 a machine.
The Canterbury casino plan also assumes that gambling at the track will subsidize increased horse race purses at the track by about $20 million a year. State and federal income taxes are another factor in the smaller payout to the state from the Canterbury plan.
The tribes' financial adviser, Valerie Red-Horse, said last week that the tribes would not pay state or federal income taxes on casino profits. Canterbury officials estimate the track would pay about $19 million in such taxes each year.
Day who has been backing a casino for Canterbury since 1997, refused to predict whether the bill would pass. But he said, "I just have the feeling that more and more legislators are saying 'You know, racino is something that makes good common sense. "
In 2003, the Republican-controlled House approved a Canterbury casino on a 71-60 vote, but the proposal did not receive a floor vote in the Senate, where there is a Democratic-Farmer-Labor majority. In 1997, the Senate voted 33-31 against using Canterbury casino profits to pay for a baseball stadium.
This year, the Canterbury bill will have at least four DFL senators as co-sponsors: Senate President James Metzen of South St. Paul, Keith Langseth of Glyndon, Linda Scheid of Brooklyn Park and Dan Sparks of Austin.
Senate DFL leaders last year urged senators not to approve a new casino and to give Minnesota's Indian tribes another year to negotiate a deal under which they would share revenue from their reservation casinos with the state, according to Langseth.
"We were asked to wait until this year," Langseth said. "Well, this is this year."
In the past, Day and House Speaker Steve Sviggum, R-Kenyon, repeatedly have charged that Senate Democrats' opposition to gambling at Canterbury was related to big campaign contributions from tribes with lucrative reservation casinos.
Tribes contributed more than $500,000 to House and Senate DFL candidates and campaign committees last year, according to records at the state Campaign Finance and Public Disclosure Board. The same records show significant contributions to Republican campaign committees by Canterbury directors and employees.
Four top Canterbury officials — the two Sampsons, Dale Schenian and Carin Offerman — last year gave about $27,000 to House and Senate Republican campaign committees. Randy Sampson said he and his father also gave donations of $100, which is just below the amount that legislative candidates are required to itemize, to a number of lawmakers.
Curt Sampson said the donations helped track officials get access to legislators; he denied the money bought support for the casino plan.