Running Aces Harness Park

[james197826]

Check out this article from the Minneapolis, MN newspaper. Hope they
will be able to make it.

Southwest Casino Corp. of Bloomington, a half-owner of the $62
million racing and card game facility in Anoka County, blamed start-
up costs at Running Aces and the loss of a casino management contract
for the lame financial results.

By NEAL ST. ANTHONY, Star Tribune

The Running Aces Harness Park is off to a stumbling financial start.

Southwest Casino Corp. of Bloomington, a half-owner of the $62
million racing and card game facility in Anoka County, blamed start-
up costs at Running Aces and the loss of a casino management contract
for the lame financial results.

Running Aces, which opened in April, is jointly owned by Southwest
and a West Virginia-based partner -- MTR Gaming.

Together they formed North Metro Harness Initiative, which built the
track and owns Running Aces. North Metro is in default on a $41.7
million loan for construction and initial operations at Running Aces,
according to a Southwest Casino filing this month with the Securities
and Exchange Commission. North Metro is in negotiations to
restructure terms and avoid foreclosure, the filing said.

Southwest Casino cautioned investors that it would take awhile to
grow revenue from the harness racing track and card club, which is in
Columbus in Anoka County. But regulatory filings and what looks like
a financial crunch indicate serious issues.

Moreover, MTR Gaming has put its 50 percent interest up for sale
along with other properties in a bid to pay down debt and focus on
core casino and racing operations in the East. Southwest invested $8
million and MTR Gaming invested $12 million in North Metro/Running
Aces.

"Under state law we had to run 50 days of live racing before we
opened the card room [on June 30]," Southwest President Tom Fox said
Monday.

"We had losses that were not unanticipated from harness racing
without the card room. We had better-than-expected attendance, but it
was an educational process for people to learn about betting. The
take from the racing was less than expected. Minnesotans are
conservative.

"Now we are operating the card room, It's been well received. We're
still working on marketing to expand awareness. We're just getting
off the ground. Next year it will be great to have harness racing and
the card room at the same time."

Racing first, then cards

The Legislature required live racing first, at the behest of critics
who charged that Southwest was really interested in operating an off-
reservation casino. Under the law, Running Aces basically can do what
Canterbury Downs does with live racing and card games.

Canterbury Park Holdings, the parent of Canterbury Downs racetrack in
Shakopee, recently reported its first quarterly loss in eight years --
a sign of the economic times in horse racing. Canterbury, a public
company whose major shareholders are the Sampson family, has
generally improved operations at the once-foundering race track and
card club.

Southwest this month reported a loss of $4.5 million on revenue of
$7.6 million during the first six months of 2008 compared with a loss
of $63,547 on revenue of $10.6 million during the first six months of
2007.

The bigger loss and revenue decline were blamed on Southwest's $2.4
million share of the loss at North Metro/Running Aces and a $3
million drop in revenue after Southwest lost a contract to manage
Oklahoma Indian casino.

Southwest's stock, which has traded as high as $1.12 per share over
the last year, closed Monday at 45 cents on the over-the-counter,
or "pink sheet," market for securities that do not trade on listed
exchanges.

To be sure, Running Aces' 25 poker tables and 25 casino games only
opened on June 30. Southwest Casino CEO Jim Druck, 66, a onetime Twin
Cities attorney and horseman who lives in Colorado, said in a
prepared statement that Running Aces opened "on time and on budget"
and that its casino operations in Colorado and a new management
agreement in the Dominican Republic were preparing the company for a
better future.

"We anticipated the losses at Running Aces, which were primarily due
to pre-opening expenses, including hiring and training more than 500
employees, and the cost of completing the first live race meet before
we were permitted to open the card room," he said in the second-
quarter statement.

The filing also said that the North Metro/Running Aces venture likely
will require additional equity investments to come into compliance
with its lenders. Failing that, the organization faces default and a
possible takeover by lenders.

Fox said the debt negotiations with Black Diamond "are ongoing."

[gallobluechip]

The FIRST thing they should do is card REAL Classifications in their races.

C-1
C-2
C-3

What is that????, Regular bettors are probably confused as hell,lol

Let's try

4 Claimers
8 Claimers
NWl6000 condition
OPENS

Enough with those ridiculous classes........

Later
Gallo

[don61111]

Something sure stinks here. It's not like there could have been a huge discrepancy in expected income. For a loan to go into default (Not just a little behind) that soon takes some work. Possibilities:
A) Financial end of the venture are the biggest morons ever assembled.
B) It was set up to fail by any number of groups. ie Government, investment group etc.
C) Someone is blowing smoke to get more of the good Minesotans to ante up.

B and C, maybe both, look like the answer.

[tz.]

Yup, classified racing is passé. It's damn near impossible trying to determine the class differences between a C-2 pacer at Running Aces and a $4,000 claimer at Scioto.