What changed in this filing

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Item 1. Business

2025-03-11 compared with 2024-03-12 · 52 added, 56 removed, 236 unchanged (31% of the section changed)

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We also make available free of charge through our website (www.canterburypark.com) the reports and other documents that we file with the SEC, including the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC.

Canterbury Park Holding Corporation (the “Company,” “we,” “our,” or “us”) is the holding company for and parent company of two subsidiaries, Canterbury Park Entertainment LLC (“Canterbury Entertainment”) and Canterbury Development (“Canterbury Development”) and an indirect subsidiary Canterbury Park Concessions, Inc.

Canterbury Park Holding Corporation (the “Company,” “we,” “our,” or “us”) is the holding company for and parent company of two subsidiaries, Canterbury Park Entertainment LLC (“Canterbury Entertainment”) and Canterbury Development LLC (“Canterbury Development”) and an indirect subsidiary Canterbury Park Concessions, Inc.

which is wholly-owned by Canterbury Entertainment.

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Our pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack and year-round wagering on races held at out-of-state racetracks that are televised simultaneously at the Racetrack (“simulcasting”).

Unbanked card games, in which patrons compete against each other instead of the house, are hosted in the Casino at the Racetrack.

Unbanked card games, in which patrons compete against each other instead of the house, are also hosted in the Casino at the Racetrack.

The Casino has historically operated 24 hours a day, seven days a week and has offered both poker and table games at up to 80 tables as allowed by Minnesota statute.

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Canterbury Entertainment is the direct owner of all land, facilities, and substantially all other assets related to our pari-mutuel wagering, Casino, concessions, and other related businesses (“Racetrack Operations”), and is subject to direct regulation by the MRC.

Canterbury Development is the direct owner of all land used in the real estate development operations.

We own approximately 260 acres of land as of December 31, 2024 , in Shakopee, Minnesota where the Racetrack is located.

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and internationally and wagering on live thoroughbred and quarter horse races (“live meets”) held on a seasonal basis beginning in May and generally concluding in September each year.

At the Racetrack, various aspects of our operations are subject to approval by the MRC and the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack, which is the Minnesota Horsemen’s Benevolent and Protective Association (“MHBPA”).

All of the wagering on simulcast and live horse races at the Racetrack is pari-mutuel wagering.

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The balance of the takeout remaining after these deductions is commonly referred to as the “retainage.”

While the Minnesota Racing Act regulates that a minimum of 8.4% of the live racing handle be paid as purses to the owners of the horses, purse contributions are governed by an agreement that we negotiate annually with the MHBPA and the Minnesota Quarter Horse Racing Association ("MQHRA").

While the Minnesota Racing Act regulates that a minimum of 8.4% of the live racing handle be paid as purses to the owners of the horses, purse contributions are governed by an agreement that we negotiate annually with the MNHBPA and the Minnesota Quarter Horse Racing Association (“MQHRA”).

In addition, the MBF receives 1% of the handle.

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For the years ended December 31, 2024 and 2023 , the Racetrack hos ted 54 and 53 d ays of live racing, respectively, beginning in May and concluding in September.

In 2023, the Company had one day of live racing cancell ed and two othe r days shortened due to inclement weather.

In 2022, the Company had one day of live racing cancelled due to inclement weather.

From June 4, 2012 to December 31, 2022, we were a party to a Cooperative Marketing Agreement (“CMA”) with the Shakopee Mdewakanton Sioux Community ("SMSC"), a federally recognized Indian tribe.

The primary purpose of the CMA was to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s thoroughbred and quarter horse industry.

During the term of the CMA, the Company agreed not to promote or lobby the Minnesota legislature for expanded gambling authority and support the SMSC’s lobbying efforts against expanding gambling authority.

On June 1, 2020, we entered into a Fifth Amendment Agreement to the CMA, which became effective on June 8, 2020 upon MRC approval.

Under the Fifth Amendment, the SMSC paid an annual purse enhancement of $7,280,000 for 2022.

Additionally, the SMSC paid an annual marketing payment under the CMA of $1,620,000 for 2022.

The CMA expired by its terms on December 31, 2022.

Accordingly, for 2023, there were no purse enhancement payments or marketing payments under the CMA.

In 2024, the Company had one day of live racing shortened due to inclement weather.

In 2023, the Company had one day of live racing cancelled and two other days shortened due to inclement weather.

Simulcasting is the process by which live horse races held at one facility (the “host track”) are transmitted simultaneously to other locations to allow patrons at each receiving location (the “guest track”) to place wagers on races transmitted from the host track.

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All of the amounts wagered at guest tracks are combined into the appropriate pools at the host track with the final odds and payouts based upon all the monies in the respective pools.

The Company is able to offer simulcast racing seven days a week, 364 days a year from racetracks around the world, in cluding Churchill Downs, Santa Anita, Gulfstream Park, Belmont Park, Saratoga Racecourse, and Dubai.

The Company is able to offer simulcast racing seven days a week, 364 days a year from racetracks around the world, including Churchill Downs, Santa Anita, Gulfstream Park, Belmont Park, Saratoga Racecourse, and Dubai.

In addition, races of national interest, such as the Kentucky Derby, the Preakness Stakes, the Belmont Stakes, and the Breeders’ Cup supplement the regular simulcast program.

The Company regularly evaluates its agreements with other racetracks to offer the most popular simulcast signals of live horse racing that are reasonably available.

Under federal and state law, in order to conduct simulcast operations either as a host or guest track, the Company must obtain the consent of the MRC and the MHBPA as the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack.

As these consents are obtained annually, no assurance can be given that the MRC and the MHBPA will allow the Company to conduct simulcast operations either as a host or guest track in future years.

If either the MRC or the MHBPA do not consent, the Company’s operations could be adversely affected by a decrease in pari-mutuel revenue, lower attendance, and lower overall handle.

Under federal and state law, in order to conduct simulcast operations either as a host or guest track, the Company must obtain the consent of the MRC and the MNHBPA as the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack.

As these consents are obtained annually, no assurance can be given that the MRC and the MNHBPA will allow the Company to conduct simulcast operations either as a host or guest track in future years.

If either the MRC or the MNHBPA do not consent, the Company’s operations could be adversely affected by a decrease in pari-mutuel revenue, lower attendance, and lower overall handle.

Casino Operations

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In order to fund the poker progressive jackpot pools, the dealer withholds up to $2 from each pot in excess of $15.

Table games, including Blackjack, Mississippi Stud, Fortune Pai Gow, Three Card Poker, Four Card Poker, Ultimate Texas Hold ‘Em, EZ Baccarat, Criss Cross Poker, Free Bet Blackjack, DJ Wild, and I Luv Suits, with betting limits ranging between $1 and $300, are currently offered in our Casino.

Table games, including Blackjack, Mississippi Stud, Fortune Pai Gow, Three Card Poker, Four Card Poker, Ultimate Texas Hold ‘Em, EZ Baccarat, Criss Cross Poker, Free Bet Blackjack, DJ Wild, Double Down Madness Blackjack, and I Luv Suits, with betting limits ranging between $1 and $300, are currently offered in our Casino.

The Company has the option to offer banked games under the Minnesota law governing Casino operations but currently only offers “unbanked” games.

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Our event space has been used for craft shows, trade shows, pool and poker tournaments, automobile and other utility vehicle shows, major art shows, and fundraisers.

Our outdoor spaces have been used for concerts, snowmobile races, and other competitions.

Our outdoor spaces have been used for concerts, snowmobile races, a rodeo, and other competitions.

The infield of the Racetrack has also been used as a concert and event area.

In addition to event space, we have offered space in our horse stable area for rent for boat storage during the winter months.

In addition to event space, we have offered space in our horse stable area for rent for boat storage during the winter months and recreational vehicle storage during the summer months.

Development Operations

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Canterbury Development continues to pursue various mixed use development opportunities, such as residential development, office, restaurants, hotel, entertainment, and retail operations.

As of December 31, 2023, Canterbury Development has contributed approximately 36 acres of l and to three, separate joint ventures described below.

As of December 31, 2024 , Canterbury Development has contributed approximately 40 acres of land to four, separate joint ventures described below.

In addition, we have sold several parcels of land, totaling approximately 50 acres, to third parties that have and will develop the property as described below.

Al though we will have no continuing ownership in these land sales, we believe the future developments of this property will contribute to the overall vitality of Canterbury Commons and drive visitation and spend to Canterbury Park.

Although we will have no continuing ownership in these land sales, we believe the future developments of these properties will contribute to the overall vitality of Canterbury Commons and drive visitation and spend to Canterbury Park.

The following is a summary of our real estate development projects within Canterbury Commons as of December 31, 2024 :

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○ As a result of these joint ventures, Canterbury Development holds a 27.4% equity interest in Doran Canterbury I, LLC governed by an operating agreement effective as of March 1, 2018 with Doran Shakopee LLC, and Canterbury Development also holds a 27.4% equity interest in Doran Canterbury II, LLC governed by an operating agreement effective as of July 30, 2020 with Doran Shakopee LLC and amended October 1, 2021.

June 16, 2020, Canterbury Development, entered into an operating agreement with an affiliate of Greystone Construction ("Greystone"), as the two members of a Minnesota limited liability company named Canterbury DBSV Development, LLC ("Canterbury DBSV").

● On June 16, 2020, Canterbury Development, entered into an operating agreement with an affiliate of Greystone Construction ( “ Greystone ” ), as the two members of a Minnesota limited liability company named Canterbury DBSV Development, LLC ( “ Canterbury DBSV ” ).

Canterbury DBSV was formed as part of a joint venture between Greystone and Canterbury Development for a multi-use development on the 13-acre land parcel located on the southwest portion of the Company’s Racetrack.

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In connection with its contribution, Canterbury Development became a 61.87% equity member in Canterbury DBSV.

○ During the fourth quarter of 2020, Canterbury DBSV transferred approximately 1.5 a cres of land as an equity contribution into another joint venture, called GS Moving Up, LLC, a Minnesota limited liability company.

In connection with it's contribution, Canterbury DBSV became a 45.87% equity member in GS Moving Up, LLC.

○ During the fourth quarter of 2020, Canterbury DBSV transferred approximately 1.5 acres of land as an equity contribution into another joint venture, called GS Moving Up, LLC, a Minnesota limited liability company.

In connection with its contribution, Canterbury DBSV became a 45.87% equity member in GS Moving Up, LLC.

The land was used for the development of a new 28,000 square foot office building, with Greystone occupying the second floor as its corporate headquarters.

The project was completed in the 2021 third quarter, and a lease was executed for the majority of the space resulting in 90% building occupancy.

○ During the fourth quarter of 2022, Canterbury DBSV transferred 1.5 acres of land as an equity contribution into another joint venture, called SW Gateway, LLC, a Minnesota limited liability company.

The project was completed in the 2021 third quarter.

○ During the first quarter of 2022, Canterbury DBSV transferred approximately 3.5 acres of land as an equity contribution into another joint venture, called Omry Canterbury, LLC, a Minnesota limited liability company.

In connection with its contribution, Canterbury DBSV became a 16.2% equity member in Omry Canterbury, LLC.

The land was used for the development of a 147-unit senior living community with initial occupancy beginning during the fourth quarter of 2023.

○ During the fourth quarter of 2022, Canterbury DBSV transferred approximtely1.5 acres of land as an equity contribution into another joint venture, called SW Gateway, LLC, a Minnesota limited liability company.

In connection with its contribution, Canterbury DBSV became a 45.9% equity member in SW Gateway, LLC.

The land was used for the development of a new 11,000 square foot building that is occupied by a local restaurant and brewery, both of which began operations in July 2023.

○ Additionally , during the first quarter of 2022, Canterbury DBSV transferred approximately 3.5 acres of land as an equity contribution into another joint venture, called Omry Canterbury, LLC, a Minnesota limited liability company.

In conn ection with its contribution, Canterbury DBSV be came a 16.2% equity m ember in Omry Canterbury, LLC.

The land was used for the development of a 147-unit senior living community with initial occupancy beginning during the fourth quarter of 2023.

○ Finally, during the fourth quarter of 2022, C anterbury DBSV sold approximately 1.7 acres of land to A&M Kerber Holdings, LLC for total consideration of approximately $925,000 for the construction of a Next Steps Learning Center and child care facility, which began operations during the fourth quarter of 2023.

○ During the fourth quarter of 2022, Canterbury DBSV sold approximately 1.7 acres of land to A&M Kerber Holdings, LLC for total consideration of approximately $925,000 for the construction of a Next Steps Learning Center and child care facility, which began operations during the fourth quarter of 2023.

○ During the first quarter of 2024, Canterbury DBSV transferred approximately 1.6 acres of land as an equity contribution into another joint venture, called Starting Gate, LLC, a Minnesota limited liability company.

In connection with its contribution, Canterbury DBSV became a 47.77% equity member in Starting Gate, LLC.

The land was used for the development of a new, 10,000 square foot commercial building that is occupied by a local pizza restaurant, BBQ restaurant, and fitness center, all of which are in operation as of February 2025.

○ During the third quarter of 2024, Canterbury DBSV transferred approximately1.5 acres of land as an equity contribution into another joint venture, called High Stakes, LLC, a Minnesota limited liability company.

In connection with its contribution, Canterbury DBSV became a 31.22% equity member in High Stakes, LLC.

The land is being used for the development of a new, 28,000 square foot office building, which is expected to begin operations in July 2025.

● On September 20, 2023, Canterbury Development, entered into an Operating Agreement with Trackside Hospitality, LLC as the two members of a Minnesota limited liability company named Trackside Investments, LLC ("Trackside Investments").

Trackside Investments was formed as a joint venture for the development of an approximately 16,000 square foot restaurant and entertainment venue.

Canterbury Development's equity contribution to Trackside Investments was approximately 3.5 acres of land, which were contributed to Trackside Investments on August 20, 2024.

In connection with its contribution, Canterbury Development became a 50% equity member in Trackside Investments.

In addition, Canterbury Development is guaranteed an annual 6% preferred return on the balance of Canterbury Development's undistributed base capital.

● In April 2020, Canterbury Development entered into two agreements to sell approximately 14 acres of land on the west side of the Racetrack to Pulte Homes of Minnesota (“Pulte”) and Lifestyle Communities for total consideration of approximately $3,500,000.

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The closing of phase two of the Pulte transaction and the sale of the remaining 4.2 acres occurred in June 2022.

○ Development approvals by Pulte on 109 new for sale row homes and townhome residences at Canterbury C ommons was completed in late 2020.

○ Development approvals by Pulte on 109 new for sale row homes and townhome residences at Canterbury Commons was completed in late 2020.

The project received its approvals from the City of Shakopee in a joint planned urban development application with Lifestyle Communities, which is located adjacent to the townhome project.

Ground improvements and utility work commenced in early 2021 for both projects.

Pulte has initiated ground up construction of a number of townhome buildings and its first model units were completed in the first quarter of 2022 with approximately 50 townhomes occupied as of December 31, 2023.

Pulte has initiated ground up construction of a number of townhome buildings and its first model units were completed in the first quarter of 2022 with approximately 84 townhomes occupied as of

December 31, 2024

Lifestyle Communities will be a 44-unit age restricted active senior cooperative community.

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The closing of the land sale took place in April 2023 for approximately $8,800,000 in total consideration.

In late 2023, Swervo broke ground and construction is underway on the amphitheater which is expected to open in 2025.

In connection with the land sale and amphitheater development, Canterbury received approval for the first phase of its barn relocation and redevelopment plan which is expected to be completed in 2025.

In late 2023, Swervo broke ground and construction is underway on the amphitheater.

In connection with the land sale and amphitheater development, Canterbury received approval for a three-phase barn relocation and redevelopment plan which is expected to be completed in 2025.

We believe this $15 million barn area redevelopment project will continue the Company’s ongoing commitment to provide quality horse racing in the State of Minnesota as well as allow for future development of Canterbury’s underutilized land.

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and other jurisdictions.

The Company competes with a number of tribal casinos in the State of Minnesota that offer video slot machines, table games, and both banked and unbanked card games, including Minnesota’s largest casino, Mystic Lake, which is located approximately four miles from the Racetrack and which is owned by the SMSC.

The Company faces direct competition from Running Aces Harness Park (“Running Aces”) in Columbus Township, Anoka County, Minnesota, a racetrack and card room that is located approximately 40 miles from Canterbury Park.

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The MRC, among other things, grants operating licenses to racetracks after an application process and public hearings, licenses all racetrack employees, jockeys, trainers, veterinarians, and other participants, regulates the transfer of ownership interests in licenses, allocates live race days and simulcast-only race days, approves race programs, regulates the conduct of races, sets specifications for the racing ovals, animal facilities, employee quarters and public areas of racetracks, regulates the types of wagers on horse races, and approves significant contractual arrangements with racetracks, including management agreements, simulcast arrangements, and totalizator contracts.

A federal statute, the Interstate Horse Racing Act of 1978, also requires that a racetrack must obtain the consent of the group representing the horsepersons (owners and trainers) racing the breed of horses that race a majority of the time at the racetrack (which is the MHBPA), and the consent of the state agency regulating the racetrack (in Minnesota, the MRC), in order to transmit simulcast signals of its live races or to receive and use simulcast signals from other racetracks.

A federal statute, the Interstate Horse Racing Act of 1978, also requires that a racetrack must obtain the consent of the group representing the horsepersons (owners and trainers) racing the breed of horses that race a majority of the time at the racetrack (which is the MNHBPA), and the consent of the state agency regulating the racetrack (in Minnesota, the MRC), in order to transmit simulcast signals of its live races or to receive and use simulcast signals from other racetracks.

Issuance of Class A and Class B Licenses to the Company

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In addition, the law requires that the Company reimburse the MRC for actual costs, including stewards, state veterinarians and drug testing, related to the regulating of live racing.

For fiscal years ended December 31, 2023 and 2022 , the Com pany paid $497,000 and $152,000, respectively, to the MRC as reimbur sement for costs of regulating live racing operations.

For fiscal years ended December 31, 2024 and 2023 , the Company paid $555,000 and $497,000, respectively, to the MRC as reimbursement for costs of regulating live racing operations.

The MRC is also authorized by the Racing Act to regulate Casino operations.

The law requires that the Company reimburse the MRC for its actual costs, including personnel costs, of regulating the Casino.

For fiscal years ended December 31, 2023 and 2022 , the Compa ny paid $297,000 and $248,000, respec tively, to the MRC as reimbursement for costs of regulating Casino operations.

For fiscal years ended December 31, 2024 and 2023 , the Company paid $356,000 and $297,000, respectively, to the MRC as reimbursement for costs of regulating Casino operations.

On January 19, 2000, the MRC issued an additional Class B License to the Company that authorized the Company to host unbanked card games.

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The Minnesota legislature is continuing to consider bills to legalize sports betting in Minnesota at tribal casinos and online through mobile applications operated by the tribes.

It is not certain whether any of these bills will be adopt ed into law.

It is not certain whether any of these bills will be adopted into law.

If sports betting were legalized in Minnesota for tribal casinos and through mobile applications operated by the tribes, we would experience increased competition from the tribal casinos which could divert customers from our Casino and Racetrack and thus adversely affect our financial condition, results of operations, and cash flows.

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There can be no assurance these approvals will be obtained for any future development the Company proposes.

Minimum Wage Legislation

Minnesota has adopted a minimum wage law that sets the minimum hourly wage that must be paid to most Company employees.

Beginning January 1, 2018, the minimum wage increases at the beginning of each year by the rate of inflation with a maximum increase of up to 2.5% per year .

The minimum wage for 2023 was $10.59 per hour and is $10.85 per hour for 2024.

T his legislation has had an adverse financial impact on the Company by increasing expenses and we expect will continue to have an adverse impact on the Company.

See the "Management's Discussion and Analysis of Financial Condition and Results of Operations." From time to time, we have implemented measures to partially mitigate the impact of increases in the minimum wage by raising our prices and reducing our employee count.

These measures could themselves have an adverse effect because higher prices and diminished service levels may discourage customers from visiting the Racetrack.

The Company’s primary market is the seven-county Minneapolis-Saint Paul metropolitan area (Hennepin, Ramsey, Anoka, Washington, Dakota, Scott, and Carver) plus the two counties to the south of the Racetrack and Casino (Le Sueur and Rice).

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Talent Management

At December 31, 2023, the Company had 227 full-time team members and 538 part-time team members.

The Company adds approximately 350 team members on a seasonal basis for live racing operations from early May until early September.

The impact of the COVID-19 pandemic on the entertainment industry, and actions that we and others in the industry took in response to COVID-19 (i ncluding implementing furloughs, reduced work week schedules, temporarily pay reductions, and eliminating a number of job positions) have adversely affected our ability to attract and retain team members.

At December 31, 2024 , the Compa ny had 226 full-time team members and 525 part-time team members.

T he Company adds approximately 350 team members on a seasonal basis for live racing operations from early May until early September.

We have seen and continue to see industry-wide labor shortages causing challenges in hiring or re-hiring for certain positions.

In response, we have enhanced our recruitment and retention efforts and increased compensation where needed to maintain competitiveness in this extremely difficult market.

In response, we have enhanced our recruitment and retention efforts and increased compensation where needed to maintain competitiveness in this difficult market.

We also offer benefits to eligible employees, including participation in our KSOP Plan (the “KSOP”) that includes the Employee Stock Ownership Plan (the “ESOP”) and the 401(k) Plan.

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The most recent survey was conducted in 2024 and reflected an engagement level among our team members that exceeded the average engagement levels of benchmarked companies.

The Company intends to complete a similar survey in late 2024.

Health and Safety

During 2022 and 202 3, we continued to focus significant attention to enhancing health and safety protocols.

During 2024, we continued to focus significant attention to enhancing health and safety protocols.

In addition, our employee guidelines and policies are founded on our cornerstones of safety, service, courtesy, cleanliness, and integrity.

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He has been active in horse industry associations, currently serving as Director of the Thoroughbred Racetracks of America and is a past Vice President of the Thoroughbred Racetracks of America and past President of the Minnesota Thoroughbred Association.

Sampson also currently serves as a director of Pineapple Energy Inc.

(Nasdaq:PEGY), a growing domestic operator and consolidator of residential solar, battery storage, and grid service solutions based in Minnetonka, Minnesota.

Sampson also served as a director of Pineapple Energy Inc.

(Nasdaq:PEGY), a growing domestic operator and consolidator of residential solar, battery storage, and grid service solutions based in Minnetonka, Minnesota, until 2024.

Dehmer was hired as Vice President of Finance and Chief Financial Officer in May 2019, and promoted to Senior Vice President of Finance in September 2021.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business