Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023.

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____.

Commission File Number: 001-37858

CANTERBURY PARK HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

	Minnesota		47-5349765
	(State or Other Jurisdiction of Incorporation or		(I.R.S. Employer
	Organization)		Identification No.)

	1100 Canterbury Road
	Shakopee, MN 55379

(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (952) 445-7223

Securities registered pursuant Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of each exchange on which registered
Common Stock Common stock, $.01 par value	CPHC	Nasdaq

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer	☐		Accelerated filer	☐
	Non-accelerated filer	☒		Smaller reporting company	☒	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

Yes

☐

☒

The Company had 4,944,642 shares of common stock, $.01 par value, outstanding as of November 10, 2023.

Canterbury Park Holding Corporation

INDEX

			Page

PART I.	FINANCIAL INFORMATION

	Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	2

		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022	3

		Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022	4

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022	5

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	26

	Item 4.	Controls and Procedures	26

PART II.	OTHER INFORMATION

	Item 1.	Legal Proceedings	27

	Item 1A.	Risk Factors	27

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

	Item 3.	Defaults Upon Senior Securities	27

	Item 4.	Mine Safety Disclosures	27

	Item 5.	Other Information	27

	Item 6.	Exhibits	28

	Signatures		28

PART 1 – FINANCIAL INFORMATION

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)
	*September 30,*		*December 31,*
	*2023*		*2022*
ASSETS

CURRENT ASSETS
Cash and cash equivalents	$	25,727,477	$	12,989,087
Restricted cash		2,348,076		3,116,916
Short-term investments		4,500,000		5,000,000
Accounts receivable, net of allowance of $19,250 for both periods		1,619,887		618,365
Employee retention credit receivable		—		6,103,236
Inventory		284,443		262,073
Prepaid expenses		499,149		557,520
Income taxes receivable and prepaid income taxes		2,426,364		2,052,364
Total current assets		37,405,396		30,699,561

LONG-TERM ASSETS
Deposits		—		27,000
Other prepaid expenses		8,414		41,774
TIF receivable		13,801,141		13,294,337
Related party receivable		2,938,307		2,555,320
Operating lease right-of-use asset		53,026		—
Equity investment		6,789,772		6,863,517
Land held for development		1,229,475		2,303,010
Land, buildings, and equipment, net		39,012,223		36,491,660
Total long-term assets		63,832,358		61,576,618
TOTAL ASSETS	$	101,237,754	$	92,276,179

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable	$	3,512,863	$	3,368,683
Casino accruals		2,687,596		2,684,444
Accrued wages and payroll taxes		2,396,327		1,814,879
Cash dividend payable		345,369		341,602
Accrued property taxes		532,891		795,646
Deferred revenue		366,999		413,442
Payable to horsepersons		225,798		993,529
Current portion of operating lease obligations		25,352		—
Current portion of finance lease obligations		1,570		18,973
Total current liabilities		10,094,765		10,431,198

LONG-TERM LIABILITIES
Deferred income taxes		8,250,015		7,474,015
Investee losses in excess of equity investment		2,550,187		3,185,923
Operating lease obligations, net of current portion		27,674		—
Finance lease obligations, net of current portion		8,184		—
Total long-term liabilities		10,836,060		10,659,938
TOTAL LIABILITIES		20,930,825		21,091,136

STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 4,944,642 and 4,888,975 respectively, shares issued and outstanding		49,446		48,890
Additional paid-in capital		26,879,814		25,914,644
Retained earnings		53,377,669		45,221,509
Total stockholders’ equity		80,306,929		71,185,043
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	101,237,754	$	92,276,179

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	*Three Months Ended September 30,*						*Nine Months Ended September 30,*
	*2023*			*2022*			*2023*			*2022*
OPERATING REVENUES:
Casino	$	10,224,216		$	10,039,527		$	30,322,149		$	30,394,387
Pari-mutuel		3,405,010			4,730,827			7,009,710			9,599,070
Food and beverage		3,310,759			3,913,320			6,808,242			7,150,715
Other		2,328,564			3,608,729			4,769,694			6,560,477
Total Net Revenues		19,268,549			22,292,403			48,909,795			53,704,649

OPERATING EXPENSES:
Purse expense		2,594,270			2,979,947			6,034,508			6,931,243
Minnesota Breeders’ Fund		308,038			323,156			822,797			874,464
Other pari-mutuel expenses		210,212			212,102			691,519			740,282
Salaries and benefits		7,245,775			6,860,590			19,922,853			18,881,258
Cost of food and beverage and other sales		1,161,665			1,365,748			2,567,561			2,771,338
Depreciation and amortization		831,379			747,267			2,308,272			2,234,790
Utilities		568,022			654,000			1,366,742			1,425,074
Advertising and marketing		887,197			1,567,163			1,817,180			2,739,638
Professional and contracted services		2,284,181			1,571,128			4,857,229			3,781,005
Gain on disposal of assets		(19,265	)		-			(19,265	)		-
Other operating expenses		1,390,339			1,602,933			4,117,388			3,800,281
Total Operating Expenses		17,461,813			17,884,034			44,486,784			44,179,373
Gain on sale of land		-			-			6,489,976			12,151
INCOME FROM OPERATIONS		1,806,736			4,408,369			10,912,987			9,537,427
OTHER INCOME (LOSS)
(Loss) gain from equity investment		(674,341	)		(500,143	)		561,991			(1,274,058	)
Interest income, net		536,904			222,671			1,433,353			620,811
Net Other (Loss) Income		(137,437	)		(277,472	)		1,995,344			(653,247	)
INCOME BEFORE INCOME TAXES		1,669,299			4,130,897			12,908,331			8,884,180
INCOME TAX EXPENSE		(533,000	)		(1,209,777	)		(3,709,000	)		(2,434,078	)
NET INCOME	$	1,136,299		$	2,921,120		$	9,199,331		$	6,450,102

Basic earnings per share	$	0.23		$	0.60		$	1.87		$	1.33
Diluted earnings per share	$	0.23		$	0.60		$	1.86		$	1.32
Weighted average basic shares outstanding		4,933,961			4,872,674			4,913,560			4,845,743
Weighted average diluted shares		4,950,524			4,901,189			4,941,100			4,879,803
Cash dividends declared per share	$	0.07		$	0.07		$	0.21		$	0.28

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

For the three months ended September 30, 2023

	*Number of*		*Common*		*Additional*		*Retained*
	*Shares*		*Stock*		*Paid-in Capital*		*Earnings*			*Total*
Balance at June 30, 2023		4,933,844	$	49,338	$	26,538,005	$	52,586,742		$	79,174,085

Stock-based compensation		—		—		132,436		—			132,436
Dividend declared		—		—		—		(345,372	)		(345,372	)
401(k) stock match		10,798		108		209,373		—			209,481
Net income		—		—		—		1,136,299			1,136,299

Balance at September 30, 2023		4,944,642	$	49,446	$	26,879,814	$	53,377,669		$	80,306,929

For the nine months ended September 30, 2023

	*Number of*		*Common*		*Additional*			*Retained*
	*Shares*		*Stock*		*Paid-in Capital*			*Earnings*			*Total*
Balance at December 31, 2022		4,888,975	$	48,890	$	25,914,644		$	45,221,509		$	71,185,043

Stock-based compensation		—		—		398,269			—			398,269
Dividend declared		—		—		—			(1,043,171	)		(1,043,171	)
401(K) stock match		28,597		286		644,287			—			644,573
Issuance of deferred stock awards		22,197		221		(171,970	)		—			(171,749	)
Shares issued under Employee Stock Purchase Plan		4,873		49		94,584			—			94,633
Net income		—		—		—			9,199,331			9,199,331

Balance at September 30, 2023		4,944,642	$	49,446	$	26,879,814		$	53,377,669		$	80,306,929

For the three months ended September 30, 2022

	*Number of*		*Common*		*Additional*		*Retained*
	*Shares*		*Stock*		*Paid-in Capital*		*Earnings*			*Total*
Balance at June 30, 2022		4,872,593	$	48,726	$	25,273,814	$	41,920,229		$	67,242,769

Stock-based compensation		—		—		110,290		—			110,290
Dividend declared		—		—		—		(341,082	)		(341,082	)
401(k) stock match		7,438		74		165,198		—			165,272
Net income		—		—		—		2,921,120			2,921,120

Balance at September 30, 2022		4,880,031	$	48,800	$	25,549,302	$	44,500,267		$	70,098,369

For the nine months ended September 30, 2022

	*Number of*		*Common*		*Additional*			*Retained*
	*Shares*		*Stock*		*Paid-in Capital*			*Earnings*			*Total*
Balance at December 31, 2021		4,812,085	$	48,121	$	24,894,571		$	39,410,534		$	64,353,226

Stock-based compensation		—		—		325,152			—			325,152
Dividend distribution		—		—		—			(1,360,369	)		(1,360,369	)
401(K) stock match		21,191		212		470,100			—			470,312
Issuance of deferred stock awards		41,816		418		(213,026	)		—			(212,608	)
Shares issued under Employee Stock Purchase Plan		4,939		49		72,505			—			72,554
Net Income		—		—		—			6,450,102			6,450,102

Balance at September 30, 2022		4,880,031	$	48,800	$	25,549,302		$	44,500,267		$	70,098,369

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	*Nine Months Ended September 30,*
	*2023*			*2022*
Operating Activities:
Net income	$	9,199,331		$	6,450,102
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,308,272			2,234,790
Stock-based compensation expense		398,269			325,152
Stock-based employee match contribution		644,573			470,312
Gain on disposal of assets		(19,265	)		—
Gain on sale of land		(6,489,976	)		(12,151	)
Deferred income taxes		776,000			13,900
(Gain) loss from equity investment		(561,991	)		1,274,058
Changes in operating assets and liabilities:
Accounts receivable		(1,001,522	)		(1,499,353	)
Employee retention credit		6,103,236			211,232
Increase in TIF receivable		(502,644	)		(501,306	)
Inventory, prepaid expenses and deposits		96,360			78,221
Income taxes receivable/payable and prepaid income taxes		(374,000	)		(1,286,931	)
Operating lease right-of-use asset		24,524			22,786
Operating lease liabilities		(24,524	)		(22,786	)
Accounts payable		116,379			1,595,149
Deferred revenue		(46,443	)		(160,872	)
Casino accruals		3,152			(560,636	)
Accrued wages and payroll taxes		581,448			482,430
Accrued property taxes		(262,755	)		197,175
Payable to horsepersons		(767,731	)		557,568
Net cash provided by operating activities		10,200,693			9,868,841

Investing Activities:
Additions to land, buildings, and equipment		(5,577,116	)		(2,663,322	)
Proceeds from disposal of assets		22,500			—
Proceeds from sale of land		8,336,359			1,159,640
Additions for TIF eligible improvements		(4,160	)		(31,697	)
Equity investment contributions		—			(397,807	)
Increase in related party receivable		(382,987	)		(145,041	)
Proceeds from sale of short term investments		500,000			—
Net cash provided by (used in) investing activities		2,894,596			(2,078,227	)

Financing Activities:
Proceeds from issuance of common stock		94,633			72,554
Cash dividend paid to shareholders		(1,039,404	)		(1,019,288	)
Payments for taxes related to net share settlement of equity awards		(171,749	)		(212,608	)
Principal payments on finance lease		(9,219	)		(20,170	)
Net cash used in financing activities		(1,125,739	)		(1,179,512	)

Net increase in cash, cash equivalents, and restricted cash		11,969,550			6,611,102

Cash, cash equivalents, and restricted cash at beginning of period		16,106,003			15,598,753

Cash, cash equivalents, and restricted cash at end of period	$	28,075,553		$	22,209,855

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited)

Schedule of non-cash investing and financing activities
Additions to land, buildings, and equipment funded through accounts payable	$	28,000		$	53,000
Dividend declared but not yet paid		345,000			341,000
Change in investee losses in excess of equity investments		(636,000	)		1,466,000
ROU assets obtained in exchange for operating lease obligations		77,550			—

Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	3,257,000		$	3,707,000
Interest paid		—			1,000

See notes to condensed consolidated financial statements.

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business – Canterbury Park Holding Corporation’s (the “Company,” “we,” “our,” or “us”) Racetrack operations are conducted at facilities located in Shakopee, Minnesota, approximately 25 miles southwest of downtown Minneapolis. In May 1994, the Company commenced year-round horse racing simulcast operations and hosted the first annual live race meet during the summer of 1995. The Company’s live racing operations are a seasonal business, as it typically hosts live race meets each year from May until September. The Company earns additional pari-mutuel revenue by televising its live racing to out-of-state racetracks around the country. Canterbury Park’s Casino typically operates 24 hours a day, seven days a week and is limited by Minnesota State law to conducting card play on a maximum of 80 tables. The Casino currently offers a variety of poker and table games. The Company’s three largest sources of revenues are from Casino operations, pari-mutuel operations, and food and beverage sales. The Company also derives revenues from related services and activities, such as admissions, advertising signage, publication sales, and from other entertainment events and activities held at the Racetrack. Additionally, the Company is developing underutilized land surrounding the Racetrack in a project known as Canterbury Commons™, with approximately 140 acres originally designated as underutilized. The Company has obtained and is pursuing several mixed-use development opportunities for this land, directly and through joint ventures.

Basis of Presentation and Preparation – The accompanying condensed consolidated financial statements include the accounts of the Company (Canterbury Park Holding Corporation and its direct and indirect subsidiaries Canterbury Park Entertainment, LLC; Canterbury Park Concessions, Inc.; and Canterbury Development, LLC). Intercompany accounts and transactions have been eliminated. The preparation of these condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these condensed consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and the notes thereto for the fiscal year ended December 31, 2022, included in its Annual Report on Form 10-K (the “2022 Form 10-K”).

The condensed consolidated balance sheets and the related condensed consolidated statements of operations, stockholders’ equity, and the cash flows for the periods ended September 30, 2023 and 2022 have been prepared by Company management. In the opinion of management, all adjustments (which include only normal recurring adjustments, except where noted) necessary to present fairly the financial position, results of operations, statement of stockholders’ equity, and cash flows at September 30, 2023 and 2022 and for the periods then ended have been made.

Summary of Significant Accounting Policies – A detailed description of our significant accounting policies can be found in our most recent Annual Report on the 2022 Form 10-K. There were no material changes in significant accounting policies during the three and nine months ended September 30, 2023.

Restricted Cash – Restricted cash represents refundable deposits and amounts due to horsemen for purses, stakes and awards, and amounts accumulated in card game progressive jackpot pools, the player pool and poker promotional fund to be used to repay card players in the form of promotions, giveaways, prizes, or by other means.

Accounts Receivable - We evaluate our allowance for credit losses and estimate collectability of current and non-current accounts receivable based on historical bad debt experience, our assessment of the financial condition of individual companies with which we do business, current market conditions, and reasonable and supportable forecasts of future economic conditions. In times of economic turmoil, our estimates and judgments with respect to the collectability of our receivables are subject to greater uncertainty than in more stable periods. The Company does not have accounts receivable with original maturities greater than one year. The allowance for credit losses and activity as of September 30, 2023 and December 31, 2022 was not material.

Employee Retention Credit ("ERC") – The Company qualified for federal government assistance through ERC provisions of the CARES Act passed in 2020, for the 2020 second, third, and fourth quarters, as well as the 2021 first and second quarters. The purpose of the ERC is to encourage employers to keep employees on the payroll, even if they are not working during the covered period because of the coronavirus outbreak. We recognize amounts to be refundable as tax credits if there is a reasonable assurance of compliance with grant conditions and receipt of credits. During the first nine months of 2023, the Company received the payments in full and as of September 30, 2023 and December 31, 2022, the Company's expected one-time refunds totaling $0 and $6,103,236, respectively, are included on the Condensed Consolidated Balance Sheets as an employee retention credit receivable. The Company recorded $6,103,236 on the Consolidated Statements of Operations as a credit to salaries and benefits expense in the 2021 fourth quarter.

Deferred Revenue – Deferred revenue includes advance sales related to racing, events and corporate partnerships. Revenue from these advance billings is recognized when the related event occurs or services have been performed.

Payable to Horsepersons - The Minnesota Pari-mutuel Horse Racing Act requires the Company to segregate a portion of funds (recorded as purse expense in the statements of operations) received from Casino operations and wagering on simulcast and live horse races, for future payment as purses for live horse races or other uses of the horsepersons’ association. Pursuant to an agreement with the Minnesota Horsemen’s Benevolent and Protective Association (“MHBPA”), the Company transferred into a trust account or paid directly to the MHBPA, $6,174,000 and $5,877,000 for the nine months ended September 30, 2023 and 2022, respectively, related to thoroughbred races. Minnesota Statutes provide that amounts transferred into the trust account are the property of the trust and not of the Company, and therefore these amounts are not recorded on the Company’s Condensed Consolidated Balance Sheet.

Revenue Recognition – The Company’s primary revenues with customers consist of Casino operations, pari-mutuel wagering on simulcast and live horse races, and food and beverage transactions. We determine revenue recognition through the following steps:

●

Identification of the contract, or contracts, with a customer

●

Identification of the performance obligations in the contract

●

Determination of the transaction price

●

Allocation of the transaction price to the performance obligation in the contract

●

Recognition of revenue when, or as, we satisfy a performance obligation

The transaction price for a Casino contract is a set percentage of wagers and is recognized at the time that the wagering process is complete. The transaction price for pari-mutuel wagering is the commission received on a wager, exclusive of any track fees and is recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body. The transaction price for food and beverage contracts is the net amount collected from the customer for these goods. Food and beverage services have been determined to be separate, stand-alone performance obligations and the transaction price is recorded as revenue as the good is transferred to the customer when delivery is made.

Contracts for Casino operations and pari-mutuel wagering involve two performance obligations for those customers earning points under the Company’s loyalty program and a single performance obligation for customers who do not participate in the program. The Company applies a practical expedient by accounting for its gaming contracts on a portfolio basis as these wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio would not differ materially from what would result if the guidance were applied on an individual wagering contract. For purposes of allocating the transaction price in a wagering contract between the wagering performance obligation and the obligation associated with the loyalty points earned, the Company allocates an amount to the loyalty point contract liability based on the stand-alone redemption value of the points earned, which is determined by the value of a point that can be redeemed for a cash voucher, food and beverage voucher, racing admission, valet parking, or racing forms. Based on past experience, the majority of customers redeem their points for cash vouchers. Therefore, there are no further performance obligations by the Company.

We have two general types of liabilities related to contracts with customers: (1) our MVP Loyalty Program and (2) outstanding chip liability. These are included in the line item Casino accruals on the consolidated balance sheet. We defer the full retail value of these complimentary reward items until the future revenue transaction occurs.

The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.

We evaluate our on-track revenue, export revenue (as described below), and import revenue (as described below) contracts to determine whether we are acting as the principal or as the agent when providing services, to determine if we should report revenue on a gross or net basis. An entity acts as a principal if it controls a specified service before that service is transferred to a customer.

For on-track revenue and “import revenue,” that is revenue we generate for racing held elsewhere that our patrons wager on, we are entitled to retain a commission for providing a wagering service to our customers. For these arrangements, we are the principal because we control the wagering service; therefore, any charges, including simulcast fees, we incur for delivering the wagering service are presented as operating expenses.

For “export revenue,” when the wagering occurs outside our premises, our customer is the third-party wagering site such as a racetrack, Off Track Betting (“OTB”), or advance deposit wagering (“ADW”) provider. Therefore, the revenue we recognize for export revenue is the simulcast host fee we earn for exporting our racing signal to the third-party wagering site.

2. STOCK-BASED COMPENSATION

Long Term Incentive Plan and Award of Deferred Stock

The Long Term Incentive Plan (the “LTI Plan”) authorizes the grant of Long Term Incentive Awards that provide an opportunity to Named Executive Officers (“NEOs”) and other Senior Executives to receive a payment in cash or shares of the Company’s common stock to the extent of achievement at the end of a period greater than one year (the “Performance Period”) as compared to Performance Goals established at the beginning of the Performance Period. Beginning in 2020, and as a result of the COVID-19 pandemic, the Company temporarily suspended the granting of performance awards under its LTI Plan, and instead granted deferred stock awards designed to retain NEOs and other senior executives in lieu of LTI Plan awards from 2020 through 2023. In February 2022, the Compensation Committee made determinations regarding the achievement of 2021 performance goals and payouts under the 2019-2021 LTI Plan, which completed the performance period and awards under the 2019-2021 LTI Plan, and the last outstanding awards under the LTI Plan. Accordingly, there are no awards outstanding under the LTI Plan.

Board of Directors Stock Options, Deferred Stock Awards, and Restricted Stock Grants

The Company’s Stock Plan currently authorizes annual grants of restricted stock, deferred stock, stock options, or any combination of the three, to non-employee members of the Board of Directors at the time of the Company’s annual shareholders’ meeting as determined by the Board prior to each such meeting. Deferred stock awards represent the right to receive shares of the Company's common stock upon vesting. Options granted under the Plan generally expire 10 years after the grant date. Restricted stock and deferred stock grants to non-employee directors generally vest 100% one year after the date of the annual meeting at which they were granted, are subject to restrictions on resale for an additional year, and are subject to forfeiture if a board member terminates his or her board service prior to the shares vesting. The unvested deferred stock awards outstanding as of September 30, 2023 to our non-employee directors consists of only the grant of deferred stock on June 1, 2023 of 7,818 shares with a weighted average fair value per share of $23.01. There were no unvested restricted stock or stock options outstanding to any non-employee director at September 30, 2023.

Employee Deferred Stock Awards

The Company's Stock Plan permits its Compensation Committee to grant stock-based awards, including deferred stock awards, to key employees and non-employee directors. The Company has made deferred stock grants to key employees that vest over one to four years. Deferred stock awards represent the right to receive shares of the Company's common stock upon vesting.

During the nine months ended September 30, 2023, the Company granted employees deferred stock awards totaling 19,020 shares of common stock, with a vesting term of approximately four years and a fair value of $25.52 per share. During the nine months ended September 30, 2022, the Company granted employees deferred stock awards totaling 18,600 shares of common stock, with a vesting term of approximately four years and a fair value of $21.62 per share.

Employee deferred stock transactions during the nine months ended September 30, 2023 are summarized as follows:

				*Weighted*
				*Average*
	*Deferred*			*Fair Value*
	*Stock*			*Per Share*
Non-Vested Balance, December 31, 2022		41,200		$	16.62
Granted		19,020			25.52
Vested		(20,050	)		14.33
Forfeited		(1,950	)		19.07
Non-Vested Balance, September 30, 2023		38,220		$	22.13

There were no stock options outstanding to any employee or other person at September 30, 2023. Stock-based compensation expense related to the LTI Plan, deferred stock awards, and restricted stock awards is included on the Condensed Consolidated Statements of Operations and totaled approximately $398,000 and $325,000 for the nine months ended September 30, 2023 and 2022. At September 30, 2023, there was approximately $744,000 of total unrecognized stock-based compensation expense related to unvested employee and board of director deferred stock awards that is expected to be recognized over a period of approximately 3.5 years.

3. NET INCOME PER SHARE COMPUTATIONS

The following is a reconciliation of the numerator and denominator of the earnings per common share computations for the three and nine months ended September 30, 2023 and 2022:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2023*		*2022*		*2023*		*2022*
Net income (numerator) amounts used for basic and diluted per share computations:	$	1,136,299	$	2,921,120	$	9,199,331	$	6,450,102

Weighted average shares (denominator) of common stock outstanding:
Basic		4,933,961		4,872,674		4,913,560		4,845,743
Plus dilutive effect of deferred stock awards		16,563		28,515		27,540		34,060
Diluted		4,950,524		4,901,189		4,941,100		4,879,803

Net income per common share:
Basic	$	0.23	$	0.60	$	1.87	$	1.33
Diluted		0.23		0.60		1.86		1.32

4. GENERAL CREDIT AGREEMENT

The Company has a general credit and security agreement with a financial institution, which provides a revolving credit line up to $10,000,000 and allows for letters of credit in the aggregate amount of up to $2,000,000 to be issued under the credit agreement. The line of credit is collateralized by all receivables, inventory, equipment, and general intangibles of the Company. The line of credit also includes collateral in the form of a Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents. The maturity date of the revolving line of credit is January 31, 2024. The outstanding balance on the line of credit was $0 at both September 30, 2023 and December 31, 2022.

5. OPERATING SEGMENTS

The Company has four reportable operating segments: horse racing, Casino, food and beverage, and development. The horse racing segment primarily represents simulcast and live horse racing operations. The Casino segment represents operations of Canterbury Park’s Casino. The food and beverage segment represents food and beverage operations provided during simulcast and live racing, in the Casino, and during special events. The development segment represents our real estate development operations. The Company’s reportable operating segments are strategic business units that offer different products and services. They are managed separately because the segments differ in the nature of the products and services provided as well as process to produce those products and services. The Minnesota Racing Commission regulates the horse racing and Casino segments.

Depreciation, interest, and income taxes are allocated to the segments, but no allocation is made to the food and beverage segment for shared facilities. However, the food and beverage segment pays approximately 25% of gross revenues earned on live racing and special event days to the horse racing segment for use of the facilities. Starting in 2020, the food and beverage segment has not paid a commission related to live racing to the horse racing segment subsequent to the Company's first temporary shutdown of operations starting March 16, 2020.

The following tables represent a disaggregation of revenues from contracts with customers along with the Company’s operating segments (in 000’s):

	*Nine Months Ended September 30, 2023*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*		*Total*
Net revenues from external customers	$	11,186		$	30,322	$	7,402	$	—	$	48,910
Intersegment revenues		194			—		893		—		1,087
Net interest income		754			—		—		679		1,433
Depreciation		1,954			225		129		—		2,308
Segment income (loss) before income taxes		(820	)		6,940		2,137		7,576		15,833
Segment tax expense (benefit)		(1,076	)		1,994		614		2,177		3,709

		*September 30, 2023*
Segment Assets		$	88,641			$	2,199			$	33,344			$	33,084			$	157,268

	*Nine Months Ended September 30, 2022*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*			*Total*
Net revenues from external customers	$	15,406		$	30,395	$	7,904	$	—		$	53,705
Intersegment revenues		150			—		785		—			935
Net interest income		24			—		—		597			621
Depreciation		1,860			226		149		—			2,235
Segment income (loss) before income taxes		1,241			8,474		2,383		(846	)		11,252
Segment tax expense (benefit)		(309	)		2,322		653		(232	)		2,434

		*December 31, 2022*
Segment Assets		$	71,338			$	2,425			$	30,341			$	26,475			$	130,579

The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

	*Nine Months Ended September 30,*
	*2023*			*2022*
Revenues
Total net revenue for reportable segments	$	49,997		$	54,640
Elimination of intersegment revenues		(1,087	)		(935	)
Total consolidated net revenues	$	48,910		$	53,705

Income before income taxes
Total segment income (loss) before income taxes	$	15,833		$	11,252
Elimination of intersegment (income) loss before income taxes		(2,925	)		(2,368	)
Total consolidated income before income taxes	$	12,908		$	8,884

	*September 30,*			*December 31,*
	*2023*			*2022*
Assets
Total assets for reportable segments	$	157,268		$	130,579
Elimination of intercompany balances		(56,030	)		(38,303	)
Total consolidated assets	$	101,238		$	92,276

6. COMMITMENTS AND CONTINGENCIES

Effective on December 21, 2021, the Company entered into a Contribution and Indemnity Agreement ("Indemnity Agreement") with affiliates of Doran Companies ("Doran") in connection with the debt refinancing on the Doran Canterbury I, LLC joint venture. Under the Indemnity Agreement, the Company is obligated to indemnify Doran for loan payment amounts up to $5,000,000 only if the lender demands the loan guarantee by Doran. Effective on October 27, 2022, the Indemnity Agreement was amended to increase the maximum indemnification by an additional $700,000.

The Company is periodically involved in various claims and legal actions arising in the normal course of business. Management believes that the resolution of any pending claims and legal actions at September 30, 2023 and as of the date of this report, will not have a material impact on the Company’s consolidated financial positions or results of operations.

In August 2018, the Company entered into a Contract for Private Redevelopment with the City of Shakopee in connection with a Tax Increment Financing District (“TIF District”). On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Redevelopment among the Master Developer, the City and the Authority, which is effective as of September 7, 2021. Under this contract, the Company is obligated to construct certain infrastructure improvements within the TIF District, and will be reimbursed for the cost of TIF eligible improvements by the City of Shakopee by future tax increment revenue generated from the developed property, up to specified maximum amounts. The total amount of funding that Canterbury will be paid as reimbursement under the TIF program for these improvements is not guaranteed and will depend on future tax revenues generated from the developed property.

7. COOPERATIVE MARKETING AGREEMENT

On March 4, 2012, the Company entered into a Cooperative Marketing Agreement (the "CMA") with the Shakopee Mdewakanton Sioux Community ("SMSC"). 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. Under the CMA, as amended, this was achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA. These payments had no direct impact on the Company’s consolidated financial statements or operations.

Under the CMA, as amended, SMSC also agreed to make “Marketing Payments” to the Company relating to joint marketing efforts for the mutual benefit of the Company and SMSC, including signage, joint promotions, player benefits, and events.

As noted above and affirmed in the Fifth Amendment, SMSC was obligated to make an annual purse enhancement of $7,380,000 and an annual marketing payment of $1,620,000 for 2022.

The amounts earned from the marketing payments were recorded as a component of other revenue and the related expenses were recorded as a component of advertising and marketing expense and depreciation in the Company’s condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, the Company recorded $977,000 and $1,764,000 in other revenue, incurred $916,000 and $1,603,000 in advertising and marketing expense, and incurred $61,000 and $161,000 in depreciation related to the SMSC marketing funds. The excess of amounts received over revenue is reflected as deferred revenue on the Company’s consolidated balance sheets.

Under the CMA, the Company agreed for the term of the CMA that it would not promote or lobby the Minnesota legislature for expanded gambling authority and will support the SMSC’s lobbying efforts against expanding gambling authority.

The CMA expired by its terms on December 31, 2022. Accordingly, for the three and nine months ended September 30, 2023, there were no purse enhancement payments or marketing payments under the CMA.

8. REAL ESTATE DEVELOPMENT

Equity Investments

Doran Canterbury I, LLC

On April 2, 2018, the Company’s subsidiary Canterbury Development LLC, entered into an Operating Agreement (“Operating Agreement”) with an affiliate of Doran Companies (“Doran”), a national commercial and residential real estate developer, as the two members of a Minnesota limited liability company named Doran Canterbury I, LLC (“Doran Canterbury I”). Doran Canterbury I was formed as part of a joint venture between Doran and Canterbury Development LLC to construct an upscale apartment complex on land adjacent to the Company’s Racetrack (the “Project”).

On September 27, 2018, Canterbury Development LLC contributed approximately 13 acres of land as its equity contribution in the Doran Canterbury I joint venture and became a 27.4% equity member. On December 20, 2018, financing for Doran Canterbury I was secured. Doran Canterbury I has completed developing Phase I of the Project, which includes 321 units, a heated parking ramp, and a clubhouse. As the Company is able to assert significant influence, but not control, over Doran Canterbury I’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For the three and nine months ended September 30, 2023, the Company recorded a loss of $650,000 and income of $636,000, respectively, on equity method investment related to this joint venture. The increased income for the first nine months of 2023 related to this joint venture is due to the receipt of insurance proceeds related to an outstanding claim. For the three and nine months ended September 30, 2022, the Company recorded $455,000 and $1,466,000, respectively, in loss on equity method investments related to this joint venture. In accordance with U.S. GAAP, since we are committed to provide future member loans to Doran Canterbury I to cover the costs of construction or operating deficiencies, we also present as a liability in the accompanying Condensed Consolidated Balance Sheets the net balance recorded for our share of Doran Canterbury I's losses in excess of the amount funded into Doran Canterbury I, which was $2,550,000 and $3,186,000 at September 30, 2023 and December 31, 2022, respectively. See Note 10 of Notes to Financial Statements for a summary of member loans to Doran Canterbury I.

Doran Canterbury II, LLC

In connection with the execution of the Amended Doran Canterbury I Agreement, on August 18, 2018, Canterbury Development LLC entered into an Operating Agreement with Doran Shakopee, LLC as the two members of a Minnesota limited liability company entitled Doran Canterbury II, LLC (“Doran Canterbury II”). The Operating Agreement was amended and restated by the members effective July 30, 2020. Under the Doran Canterbury II Operating Agreement, Doran Canterbury II will pursue development of Phase II of the Project. Phase II will include an additional 300 apartment units. Canterbury Development’s equity contribution to Doran Canterbury II for Phase II was approximately 10 acres of land, which were contributed to Doran Canterbury II on September 30, 2020. In connection with its contribution, Canterbury Development became a 27.4% equity member in Doran Canterbury II with Doran owning the remaining 72.6%. As the Company is able to assert significant influence, but not control, over Doran Canterbury II’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. As of September 30, 2023, the proportionate share of Doran Canterbury II's earnings was immaterial. During the three and nine months ended September 30, the Company did not make any contributions as an equity investment contribution in Doran Canterbury II. During the three and nine months ended September 30, 2022, the Company contributed approximately $0 and $398,000, respectively, as an equity investment contribution in Doran Canterbury II. Under the Operating Agreement, we are required to provide future member loans to Doran Canterbury II to cover the costs of construction or operating deficiencies. See Note 10 of Notes to Financial Statements for a summary of member loans to Doran Canterbury II.

Canterbury DBSV Development, LLC

On June 16, 2020, Canterbury Development LLC, entered into an Operating Agreement with an affiliate of Greystone Construction, 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 LLC for a multi-use development on the 13-acre land parcel located on the southwest portion of the Company’s racetrack. Canterbury Development LLC's equity contribution to Canterbury DBSV was approximately 13 acres of land, which were contributed to Canterbury DBSV on July 1, 2020. In connection with its contribution, Canterbury Development became a 61.87% equity member in Canterbury DBSV. As the Company is able to assert significant influence, but not control, over Canterbury DBSV’s operational and financial policies, the Company accounts for the joint venture as an equity method investment. For the three and nine months ended September 30, 2023, the Company recorded $24,000 and $76,000, respectively, in loss on equity method investments related to this joint venture. For the three and nine months ended September 30, 2022, the Company recorded a loss of $45,000 and income of $194,000, respectively, on equity investment related to this joint venture.

The following table summarizes changes to the Equity investment and Investee losses in excess of equity investment lines on our consolidated balance sheets for the nine months ended September 30, 2023:

	*Equity Investment*			*Investee losses in excess of equity investment*			*Net Equity Investment*
Net Equity Investment Balance at 12/31/22	$	6,863,517		$	(3,185,923	)	$	3,677,594

Q1 Equity investment income (loss)		(23,232	)		1,881,744			1,858,512

Q2 Equity investment income (loss)		(26,071	)		(596,109	)		(622,180	)

Q3 Equity investment income (loss)		(24,442	)		(649,899	)		(674,341	)

Net Equity Investment Balance at 9/30/23	$	6,789,772		$	(2,550,187	)	$	4,239,585

Tax Increment Financing

On August 8, 2018, the City Council of the City of Shakopee, Minnesota approved a Contract for Private Redevelopment (“Redevelopment Agreement”) between the City of Shakopee Economic Development Authority (“Shakopee EDA”) and Canterbury Park Holding Corporation and its subsidiary Canterbury Development LLC in connection with a Tax Increment Financing District (“TIF District”) that the City had approved in April 2018. The City of Shakopee, the Shakopee EDA and the Company entered into the Redevelopment Agreement on August 10, 2018.

Under the Original Agreement, the Company agreed to undertake a number of specific infrastructure improvements within the TIF District, and the City agreed that a portion of the tax revenue generated from the developed property will be paid to the Company to reimburse it for its expense in constructing these improvements. Under the Original Agreement, the total estimated cost of TIF eligible improvements to be borne by the Company was $23,336,500.

On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Private Redevelopment (the “First Amendment”) among the Company, the City of Shakopee, and the Shakopee EDA, which is effective as of September 7, 2021. Under the First Amendment and as part of the authorized changes regarding the responsibilities of the Company and the City, improvements on Unbridled Avenue will be primarily constructed by the City of Shakopee. As a result, the total estimated cost of TIF eligible improvements to be borne by the Company was reduced by $5,744,000 to an amount not to exceed $17,592,881. In order to reimburse the Company for the qualified costs related to constructing the developer improvements, the Authority will issue and the Company will receive a TIF Note in the maximum principal amount of $17,592,881. The First Amendment also memorialized that the Company completed the Shenandoah Drive improvements as required prior to December 31, 2019. The City is obligated to issue bonds to finance the portion of the improvements required to be constructed by the City.

A detailed Schedule of the Public Improvements under the First Amendment, the timeline for their construction and the source and amount of funding is set forth in the First Amendment, which is filed as Exhibit 10.1 of the Form 8-K filed on January 31, 2022. The Company expects to substantially complete the remaining developer improvements by July 17, 2027 and will be reimbursed for costs of the developer improvements incurred by no later than July 17, 2027. The total amount of funding that the Company will be paid as reimbursement under the TIF program for these improvements is not guaranteed, however, and will depend in part on future tax revenues generated from the developed property.

As of September 30, 2023, the Company recorded a TIF receivable of approximately $13,801,000, which represents $11,305,000 of principal and $2,496,000 of interest. Management believes future tax revenues generated from current development activity will exceed the Company's development costs and thus, management believes no allowance related to this receivable is necessary. As of December 31, 2022, the Company recorded a TIF receivable of approximately $13,294,000, which represented $11,301,000 of principal and $1,993,000 of interest.

The Company expects to finance its improvements under the Redevelopment Agreement with funds from its current operating resources and existing credit facility and, potentially, third-party financing sources.

9. LEASES

The Company determines if an arrangement is a lease or contains a lease at inception. The Company leases some office equipment under finance leases. We also lease equipment related to our horse racing operations under operating leases. For lease accounting purposes, we do not separate lease and nonlease components, nor do we record operating or finance lease assets and liabilities for short term leases.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments. We recognize expense for operating leases on a straight-line basis over the lease term. The Company’s lease agreements do not contain any variable lease payments, material residual value guarantees or any restrictive covenants.

Lease costs related to operating leases were $26,785 and $22,855 for the nine months ended September 30, 2023 and 2022. The total lease expenses for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or liability was $378,134 and $411,354 for the nine months ended September 30, 2023 and 2022, respectively.

Lease costs included in depreciation and amortization related to our finance leases were $18,708 for both the nine months ended September 30, 2023 and 2022. Interest expense related to our finance leases was immaterial.

The following table shows the classification of the right of use assets on our consolidated balance sheets:

		*September 30,*		*December 31,*
	*Balance Sheet Location*	*2023*		*2022*
Assets
Finance	Land, buildings and equipment, net (1)	$	9,754	$	18,973
Operating	Operating lease right-of-use assets		53,026		-
Total Leased Assets		$	62,780	$	18,973

1 – Finance lease assets are net of accumulated amortization of $118,044 and $106,586 as of September 30, 2023 and December 31, 2022, respectively.

The following table shows the lease terms and discount rates related to our leases:

	*September 30,*			*December 31,*
	*2023*			*2022*
Weighted average remaining lease term (in years):
Finance		5.2			0.7
Operating		0.8			0.0
Weighted average discount rate (%):
Finance		8.5	%		5.0	%
Operating		8.0	%		0.0	%

The maturity of operating leases and finance leases as of September 30, 2023 are as follows:

Nine Months Ended September 30, 2023	*Operating leases*			*Finance leases*
2023 remaining	$	—		$	585
2024		26,785			2,339
2025		28,230			2,339
2026		—			2,339
2027 and beyond		—			4,485
Total minimum lease obligations		55,015			12,088
Less: amounts representing interest		(1,989	)		(2,334	)
Present value of minimum lease payments		53,026			9,754
Less: current portion		(25,352	)		(1,570	)
Lease obligations, net of current portion	$	27,674		$	8,184

10. RELATED PARTY RECEIVABLES

Since 2019, the Company has made member loans to the Doran Canterbury I and the Doran Canterbury II joint ventures totaling approximately $2,485,000 and $2,269,000 as of September 30, 2023 and December 31, 2022, respectively. These member loans bear interest at the rate equal to the Prime Rate plus two percent per annum, and accrued interest totaled $451,000 and $275,000 as of September 30, 2023 and December 31, 2022, respectively. The Company expects to be fully reimbursed for these member loans as and when the joint ventures achieve positive cash flow. Under the Operating Agreements for Doran Canterbury I and Doran Canterbury II, the joint ventures must repay member loans before payments to members in accordance with their percentage interests.

The Company has also recorded related party receivables of approximately $2,000 and $11,000 as of September 30, 2023 and December 31, 2022, respectively, for various related costs incurred by the Company. The Company expects to be fully reimbursed for these costs by the related parties in 2023.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand Canterbury Park Holding Corporation and its subsidiaries, our operations, our financial results and financial condition and our present business environment. This MD&A is provided as a supplement to, and should be read in conjunction with, our condensed consolidated financial statements and the accompanying notes to the financial statements (the “Notes”).

Overview:

Canterbury Park Holding Corporation (the “Company,” “we,” “our,” or “us”) conducts pari-mutuel wagering operations and hosts “unbanked” card games at its Canterbury Park Racetrack and Casino facility (the “Racetrack”) in Shakopee, Minnesota, which is approximately 25 miles southwest of downtown Minneapolis. The Racetrack is the only facility in the State of Minnesota that offers live pari-mutuel thoroughbred and quarter horse racing.

The Company’s pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack each year from May through September, 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, are hosted in the Casino at the Racetrack. The Casino typically operates 24 hours a day, seven days a week. The Casino offers both poker and table games at up to 80 tables. The Company also derives revenues from related services and activities, such as concessions, parking, advertising signage, publication sales, and from other entertainment events and activities held at the Racetrack.

Operations Review for the Three and Nine Months Ended September 30, 2023:

Revenues:

Total net revenues for the three months ended September 30, 2023 were $19,269,000, a decrease of $3,024,000, or 13.6%, compared to total net revenues of $22,292,000 for the three months ended September 30, 2022. Total net revenues for the nine months ended September 30, 2023 were $48,910,000, a decrease of $4,795,000, or 8.9%, compared to total net revenues of $53,705,000 for the nine months ended September 30, 2022. See below for a further discussion of our sources of revenues.

Casino Revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Poker Games Collection	$	1,844,000	$	1,925,000	$	5,665,000	$	5,705,000
Other Poker Revenue		739,000		715,000		2,253,000		2,066,000
Total Poker Revenue		2,583,000		2,640,000		7,918,000		7,771,000

Table Games Collection		7,037,000		6,822,000		20,567,000		20,850,000
Other Table Games Revenue		604,000		578,000		1,837,000		1,773,000
Total Table Games Revenue		7,641,000		7,400,000		22,404,000		22,623,000

Total Casino Revenue	$	10,224,000	$	10,040,000	$	30,322,000	$	30,394,000

The primary source of Casino revenue is a percentage of the wagers received from players as compensation for providing the Casino facility and services, which is referred to as “collection revenue.” Other Poker Revenue and Other Table Games Revenue presented above includes fees collected for the administration of tournaments and the poker jackpot and amounts earned as reimbursement of the administrative costs of maintaining table games jackpot funds, respectively.

As indicated by the table above, total Casino revenue remained relatively flat, increasing $184,000, or 1.8%, and decreasing $72,000, or 0.2%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022.

Pari-Mutuel Revenue:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Simulcast	$	906,000	$	901,000	$	2,848,000	$	2,997,000
Live Racing		1,047,000		1,214,000		1,526,000		1,890,000
Guest Fees		1,082,000		2,133,000		1,533,000		3,449,000
Other revenue		370,000		483,000		1,103,000		1,263,000
Total Pari-Mutuel Revenue	$	3,405,000	$	4,731,000	$	7,010,000	$	9,599,000

Total pari-mutuel revenue decreased $1,326,000, or 28%, and $2,589,000, or 27%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease in pari-mutuel revenues is primarily due to a decrease in live race days year-over-year (53 race days in 2023 compared to 64 race days in 2022) as well as decreased guest fees from out-state-handle on our live racing product.

Food and Beverage Revenue:

Food and beverage revenue decreased $603,000, or 15.4%, and $342,000, or 4.8%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease in food and beverage revenues for the three and nine month periods is primarily due to Twin Cities Summer Jam not taking place in the third quarter of 2023 as it did during the third quarter of 2022.

Other Revenue:

Other revenue decreased $1,280,000, or 35.5%, and $1,791,000, or 27.3%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decreases are primarily due to the expiration of the SMSC agreement as funds received from the agreement were used and subsequently recorded in other revenues as well as being recorded as operating, primarily advertising and marketing, expenses.

Operating Expenses:

Total operating expenses decreased $422,000, or 2.4%, and increased $307,000, or 0.7%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The following paragraphs provide further detail regarding certain operating expenses.

Purse expense decreased $386,000, or 12.9%, and $897,000, or 12.9%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease for the three months ended September 30, 2023 is primarily due to the decrease in pari-mutuel revenues while the decrease for the nine months ended September 30, 2023 is primarily due to decreases of both pari-mutuel and Casino revenues.

Salaries and benefits increased $385,000, or 5.6%, and $1,042,000, or 5.5%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The increase is primarily due to an increase in our wage-rate structure for seasonal as well as year-round employees to attract and retain front-line workers. The Company also increased its 401(k) match percentage, effective January 1, 2023.

Cost of food and beverage sales decreased $204,000, or 14.9%, and $204,000, or 7.4%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease is primarily due to the decreased food and beverage revenue due to Twin Cities Summer Jam not taking place in 2023 as noted above.

Advertising and marketing costs decreased $680,000, or 43.4%, and $922,000, or 33.7%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease is attributed to the expiration of the Cooperative Marketing Agreement mentioned above in the other revenues section.

Professional and contracted services increased $713,000, or 45.4%, and $1,076,000, or 28.5%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The increase in professional expense relates to long-term strategic growth initiatives being pursued as part of the execution on our five-year strategic plan focused on growing Casino revenue.

Other operating expenses decreased $213,000, or 13.3%, and increased $317,000, or 8.3%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease for the three months ended September 30, 2023 is primarily due to lower costs for promoter expenses related to our summer concert series. The increase for the nine months ended September 30, 2023 is primarily due to increased track maintenance costs, a settlement of a claim, and also the timing of miscellaneous repairs and maintenance year-over-year.

Other Income (Loss), Net:

Other loss, net, for the three months ended September 30, 2023 was $137,000, an increase of $140,000, compared to a net other loss of $277,000 for the three months ended September 30, 2022. Other income, net, for the nine months ended September 30, 2023 was $1,995,000, an increase of $2,649,000, compared to a net other loss of $653,000 for the nine months ended September 30, 2022. The increase for the nine months ended September 30, 2023 is primarily due to our share of insurance proceeds received on a claim by Doran Canterbury I. Also contributing to both the three and nine month increases was increased interest income due to the Company transferring available cash into certificates of deposit and money market funds as well as increasing interest rates related to our member loans to Doran Canterbury I and Doran Canterbury II.

During the 2023 second quarter, the Company recorded a gain on sale of land of $6,490,000 as a result of the sale of approximately 37 acres of land to an affiliate of Swervo Development for approximately $8,800,000 in total consideration.

The Company recorded a provision for income taxes of $533,000 and $1,210,000 for the three months ended September 30, 2023 and 2022, respectively. The Company recorded a provision for income taxes of $3,709,000 and $2,434,000 for the nine months ended September 30, 2023 and 2022, respectively. We record our quarterly provision for income taxes based on our estimated annual effective tax rate for the year. The decrease in our tax expense for the three months ended September 30, 2023 is primarily due to a decrease in income before taxes. Our effective tax rate was 31.9% and 28.7% for the three and nine months ended September 30, 2023, respectively. Our effective tax rate was 29.3% and 27.4% for the three and nine months ended September 30, 2022, respectively. The small fluctuations in the effective tax rates are primarily the result of discrete items that occurred during the three and nine months ended September 30, 2023.

The Company recorded net income of $1,136,000 and $9,199,000 for the three and nine months ended September 30, 2023, respectively. The Company recorded net income of $2,921,000 and $6,450,000 for the three and nine months ended September 30, 2022, respectively.

EBITDA

To supplement our financial statements, we also provide investors with information about our EBITDA and Adjusted EBITDA, each of which is a non-GAAP measure, which excludes certain items from net income, a GAAP measure. See the table below, which presents reconciliations of these measures to the GAAP equivalent financial measures. We define EBITDA as earnings before interest, income tax expense, and depreciation and amortization. We also compute Adjusted EBITDA, which reflects additional adjustments to Net Income to eliminate unusual or non-recurring items, as well as items relating to our real estate development operations and we believe the exclusion of these items allows for better comparability of our performance between periods and is useful in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, excluding the impact of our real estate segment, and provides a perspective on the current effects of operating decisions relating to our core, non-real estate business. For the three and nine months ended September 30, 2023, Adjusted EBITDA excluded depreciation relating to equity investments, gain on sale of land and disposal of assets, a gain on insurance proceeds related to the equity investment in Doran Canterbury I, as well as depreciation and amortization relating to equity investments, and interest expense related to equity investments. Neither EBITDA nor adjusted EBITDA is a measure of performance calculated in accordance with GAAP and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance. EBITDA is presented as a supplemental disclosure because we believe that, when considered with measures calculated in accordance with GAAP, EBITDA and Adjusted EBITDA provide a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes, and it is a widely used measure of performance and a basis for valuation of companies in our industry. Moreover, other companies that provide EBITDA or Adjusted EBITDA information may calculate EBITDA or Adjusted EBITDA differently than we do.

The following table sets forth a reconciliation of net income, a GAAP financial measure, to EBITDA and to adjusted EBITDA (defined above) which are non-GAAP financial measures, for the three and nine months ended September 30, 2023 and 2022:

Summary of EBITDA Data

	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
NET INCOME	$	1,136,299		$	2,921,120		$	9,199,331		$	6,450,102
Interest income, net		(536,904	)		(222,671	)		(1,433,353	)		(620,811	)
Income tax expense		533,000			1,209,777			3,709,000			2,434,078
Depreciation		831,379			747,267			2,308,272			2,234,790
EBITDA		1,963,774			4,655,493			13,783,250			10,498,159
Gain on disposal of assets		(19,265	)		—			(19,265	)		—
Gain on sale of land		—			—			(6,489,976	)		(12,151	)
Gain on insurance proceeds related to equity investments		—			—			(2,528,901	)		—
Depreciation and amortization related to equity investments		438,011			445,181			1,313,986			1,340,856
Interest expense related to equity investments		467,571			240,418			1,292,627			625,401
ADJUSTED EBITDA	$	2,850,091		$	5,341,092			7,351,721			12,452,265

Adjusted EBITDA decreased $2,491,000, or 46.6%, and $5,101,000, or 41.0%, for the three and nine months ended September 30, 2023, respectively, compared to the same periods in 2022. The decrease in Adjusted EBITDA is primarily due to decreased Pari-mutuel and Casino revenues noted above. Furthermore, for the nine months ended September 30, 2023, Adjusted EBITDA was reduced by insurance proceeds received by the Company's equity investment related to an insurance claim by the Doran Canterbury I, LLC joint venture as well as the gain on sale of land to Swervo Development, which were not present in other periods. For the three and nine months ended September 30, 2023, Adjusted EBITDA as a percentage of net revenue was 14.8% and 15.0%, respectively. For the three and nine months ended September 30, 2022, Adjusted EBITDA as a percentage of net revenue was 24.0% and 23.2%, respectively.

Contingencies:

The Company continues to analyze the feasibility of various options related to the development of our underutilized land. The Company may incur substantial costs during the feasibility and predevelopment process, but the Company believes available funds are sufficient to cover the near-term costs. See Liquidity and Capital Resources for more information on liquidity and capital resource requirements.

Liquidity and Capital Resources:

The Company's primary source of liquidity and capital resources have been and are expected to be cash flow from operations and cash available under our revolving line of credit. The Company has a general credit and security agreement with a financial institution, which provides a revolving credit line up to $10,000,000 and allows for letters of credit in the aggregate amount of up to $2,000,000 to be issued under the credit agreement which matures January 31, 2024. The line of credit is collateralized by all receivables, inventory, equipment, and general intangibles of the Company. The line of credit also includes collateral in the form of a Mortgage, Security Agreement, Fixture Financing Statement and Assignment of Leases and Rents. As of September 30, 2023, the outstanding balance on the line of credit was $0. The Company did not borrow on the revolving line of credit during the quarter ended September 30, 2023. As of September 30, 2023, the Company was in compliance with the financial covenants of the general credit and security agreement.

The Company’s cash, cash equivalents, and restricted cash balance at September 30, 2023 was $28,076,000 compared to $16,106,000 as of December 31, 2022. The Company believes that unrestricted funds available in its cash accounts, amounts available under its revolving line of credit, along with funds generated from operations and future land sales, will be sufficient to satisfy its ongoing liquidity and capital resource requirements for regular operations, as well as its planned development expenses for at least the next twelve months. The Company intends to allocate substantially all of the net proceeds from the sale of the 37 acres of land to Bloomington Investments, LLC, an entity related to Swervo Development ("Swervo"), for total consideration of $8,800,000, to the redevelopment of the horse stabling area, which serves its racing business, with new barns and a new dormitory complex. The Company may seek additional financing to complete the redevelopment of the horse stabling area. In August 2023, the Company received approval for the first phase of the barn relocation and redevelopment plan, which is expected to take approximately one year to complete. Furthermore, if the Company engages in additional significant real estate development, significant improvements to its facilities, the Racetrack or surrounding grounds, or strategic growth or diversification transactions, additional financing would more than likely be required and the Company may seek this additional financing through joint venture arrangements, through incurring debt, or through an equity financing, or a combination of any of these.

Operating Activities

Trends in our operating cash flows tend to follow trends in operating income but can be affected by changes in working capital, the timing of significant interest payments, and tax payments or refunds. Net cash provided by operating activities for the nine months ended September 30, 2023 was $10,201,000, primarily as a result of the following: the Company reported net income of $9,199,000, depreciation of $2,308,000, deferred income taxes of $776,000, and stock-based compensation and 401(k) match totaling $1,043,000, offset by a gain from equity investment of $562,000 and a gain on land sale of $6,490,000. The Company experienced an increase in cash related to an employee retention credit receivable of $6,103,000, offset by a decrease in amounts payable to horsepersons of $768,000 and an increase in accounts receivable of $1,002,000 for the nine months ended September 30, 2023.

Net cash provided by operating activities for the nine months ended September 30, 2022 was $9,869,000, primarily as a result of the following: the Company reported net income of $6,450,000, depreciation of $2,235,000, a loss from equity investment of $1,274,000, and stock-based compensation and 401(k) match totaling $795,000. Primarily due to timing of our live racing season, the Company also experienced an increase in accounts payable of $1,595,000 and an increase to payable to horsepersons of $558,000, offset by a decrease in accounts receivable of $1,499,000 and income taxes receivable and prepaid income taxes of $1,287,000 for the nine months ended September 30, 2022.

Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2023 was $2,895,000, primarily due to net proceeds received from the sale of land of $8,337,000, offset by $5,577,000 in additions to land, buildings, and equipment.

Net cash used in investing activities for the first nine months of 2022 was $2,078,000, primarily due to $2,663,000 in additions to land, buildings, equipment, and $398,000 in equity investment contributions, which was somewhat offset by $1,160,000 in net proceeds received from the sale of land .

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2023 was $1,126,000, primarily due to cash dividends paid to shareholders and payments for taxes of equity awards. The Company declared a cash dividend of $0.07 per share payable each quarter during the nine months ended September 30, 2023.

Net cash used in financing activities during the first nine months of 2022 was $1,180,000, primarily due to cash dividends paid to shareholders and payments for taxes of equity awards. The Company declared a cash dividend of $0.14 per share payable during the first quarter followed by a $0.07 per share payable for the second and third quarters during the nine months ended September 30, 2022.

Critical Accounting Estimates:

The preparation of the Condensed Consolidated Financial Statements in accordance with GAAP requires us to make estimates and judgments that are subject to an inherent degree of uncertainty. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change.

These accounting estimates are described in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Management made no changes to the Company’s critical accounting estimates during the quarter ended September 30, 2023. In applying its critical accounting estimates, management reassesses its estimates each reporting period based on available information. Changes in these estimates did not have a significant impact on earnings for the quarter ended September 30, 2023.

The development and selection of critical accounting estimates, and the related disclosures, have been reviewed with the Audit Committee of our Board of Directors. We believe the current assumptions and other considerations used to estimate amounts reflected in our Condensed Consolidated Financial Statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our Condensed Consolidated Financial Statements, the resulting changes could have a material adverse effect on our financial condition, results of operations and cash flows.

Estimate of the allowance for doubtful accounts - Property Tax Increment Financing "TIF" Receivable

As of September 30, 2023, the Company recorded a TIF receivable on its Consolidated Balance Sheet of approximately $13,801,000, which represents $11,305,000 of principal and $2,496,000 of interest. The TIF receivable requires significant management estimates and judgement pertaining to whether an allowance for doubtful accounts is necessary. The TIF receivable was generated in connection with the Contract for Private Redevelopment, in which the City of Shakopee has agreed that a portion of the future tax increment revenue generated from the developed property around the Racetrack will be paid to the Company to reimburse it for expenses in constructing public infrastructure improvements.

The Company typically performs an annual collectability analysis of the TIF receivable in the fourth quarter of each year, or more frequently if indicators of potential uncollectability exist. The Company utilizes the assistance of a third party to assist with the projected tax increments. The quantitative analysis includes assumptions based on the market values of the completed development projects within Canterbury Commons, which derives the future projected tax increment revenue. The Company uses the analysis to determine if the future tax increment revenue will exceed the Company's development costs on infrastructure improvements. As a result of our analysis for the year ended December 31, 2022, management believes the TIF receivable will be fully collectible and no allowance related to this receivable is necessary. There were no indicators of potential uncollectability for the three and nine months ended September 30, 2023.

Cooperative Marketing Agreement:

On June 4, 2012, the Company entered into a Cooperative Marketing Agreement (the "CMA") with the SMSC. 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. Under the CMA, as amended, this was achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA. These payments had no direct impact on the Company’s consolidated financial statements or operations.

As noted above and affirmed in the Fifth Amendment, SMSC paid the required annual purse enhancement of $7,380,000 and annual marketing payment of $1,620,000 for 2022.

The amounts earned from the marketing payments were recorded as a component of other revenue and the related expenses were recorded as a component of advertising and marketing expense and depreciation in the Company’s condensed consolidated statements of operations. For the three and nine months ended September 30, 2022, the Company recorded $977,000 and $1,764,000 in other revenue, incurred $916,000 and $1,603,000 in advertising and marketing expense, and incurred $61,000 and $161,000 in depreciation related to the SMSC marketing funds. The excess of amounts received over revenue is reflected as deferred revenue on the Company’s consolidated balance sheets.

Under the CMA, the Company agreed for the term of the CMA that it would not promote or lobby the Minnesota legislature for expanded gambling authority and will support the SMSC’s lobbying efforts against expanding gambling authority.

The CMA expired by its terms on December 31, 2022. Accordingly, for the three and nine months ended September 30, 2023, there were no purse enhancement payments or marketing payments under the CMA.

Redevelopment Agreement:

As mentioned above in Note 8 of Notes to Financial Statements, on August 10, 2018, the City of Shakopee, the City of Shakopee Economic Development Authority, and the Company entered into a Redevelopment Agreement in connection with a Tax Increment Financing District (“TIF District”) that the City had approved in April 2018. Under the Redevelopment Agreement, the Company has agreed to undertake a number of specific infrastructure improvements within the TIF District, including the development of public streets, utilities, sidewalks, and other public infrastructure and the City of Shakopee agreed that a portion of the tax revenue generated from the developed property will be paid to the Company to reimburse it for its expense in constructing these improvements. The Company expects to finance its improvements under the Redevelopment Agreement with funds from its current operating resources and existing credit facility and, potentially, third-party financing sources.

On January 25, 2022, the Company received the fully executed First Amendment to the Contract for Private Redevelopment among the Company, the City of Shakopee, and the Shakopee EDA, which is effective as of September 7, 2021. Under the First Amendment and as part of the authorized changes regarding the responsibilities of the Company and the City, improvements on Unbridled Avenue will be primarily constructed by the City of Shakopee. As a result, the total estimated cost of TIF eligible improvements to be borne by the Company was reduced by $5,744,000 to an amount not to exceed $17,592,881.

Forward-Looking Statements:

From time-to-time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, prospective business activities or plans that are typically preceded by words such as “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties that could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to:

●

Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control.

●

Because purse enhancement payments and marketing payments under our CMA with SMSC did not continue after December 31, 2022, we have experienced decreased revenue and profitability from live racing.

●

We may not be able to attract a sufficient number of horses and trainers to achieve above average field sizes.

●

We face significant competition, both directly from other racing and gaming operations and indirectly from other forms of entertainment and leisure time activities, which could have a material adverse effect on our operations.

●

Nationally, the popularity of horse racing has declined

●

A lack of confidence in the integrity of our core businesses could affect our ability to retain our customers and engage with new customers.

●

Horse racing is an inherently dangerous sport and our racetrack is subject to personal injury litigation.

●

Our business depends on using totalizator services.

●

Inclement weather and other conditions may affect our ability to conduct live racing.

●

Our business and operations have been, and may in the future, be adversely affected by epidemics, pandemics, outbreaks of disease, and other adverse public health developments, including COVID-19.

●

We are subject to changes in the laws that govern our business, including the possibility of an increase in gaming taxes, which would increase our costs, and changes in other laws may adversely affect our ability to compete.

●

We are subject to extensive regulation from gaming authorities that could adversely affect us.

●

We rely on the efforts of our partner Doran for the development and profitable operation of our Triple Crown Residences at Canterbury Park joint venture.

●

We rely on the efforts of our partner Greystone Construction for a new development project.

●

We may not be successful in executing our real estate development strategy.

●

We are obligated to make improvements in the TIF district and will be reimbursed only to the extent of future tax revenue.

●

An increase in the minimum wage mandated under Federal or Minnesota law could have a material adverse effect on our operations and financial results.

●

We may be adversely affected by the effects of inflation

●

The payment and amount of future dividends is subject to Board of Director discretion and to various risks and uncertainties.

●

Our information technology and other systems are subject to cyber security risk including misappropriation of customer information or other breaches of information security.

●

We process, store, and use personal information and other data, which subjects us to governmental regulation and other legal obligations related to privacy, and our actual or perceived failure to comply with such obligations could harm our business.

●

Other factors that are beyond our ability to control or predict.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4: CONTROLS AND PROCEDURES

(a)

Evaluation of Disclosure Controls and Procedures:

The Company’s President and Chief Executive Officer, Randall D. Sampson and Chief Financial Officer, Randy J. Dehmer, have reviewed the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based upon this review, these officers have concluded that the Company’s disclosure controls and procedures are effective.

(b)

Changes in Internal Control over Financial Reporting:

There have been no significant changes in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Exchange Act) that occurred during our fiscal quarter ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Not Applicable.

Item 1A. Risk Factors

The most significant risk factors applicable to the Company are described in Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes from the risk factors previously disclosed.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not Applicable.

Item 3. Defaults upon Senior Securities

Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

During the three months ended September 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (rules 13a-14 and 15d-14 of the Exchange Act).

32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350).

99.1	Press Release dated November 9, 2023 announcing 2023 Third Quarter Results.

101	The following financial information from Canterbury Park Holding Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, formatted in Inline eXtensible Business Reporting Language XBRL: (i) Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, (ii) Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and September 30, 2022, (iii) Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and September 30, 2022, (iv) Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and September 30, 2022, and (v) Notes to Financial Statements.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Canterbury Park Holding Corporation

Dated: November 13, 2023	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer (principal executive officer)


Dated: November 13, 2023	/s/ Randy J. Dehmer
	Randy J. Dehmer
	Chief Financial Officer (principal financial officer, principal accounting officer)

Exhibit 31.1

CERTIFICATION

I, Randall D. Sampson certify that:

I have reviewed this quarterly report on Form 10-Q of Canterbury Park Holding Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case on an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and;

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2023	CANTERBURY PARK HOLDING CORPORATION

	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer (principal executive officer)

Exhibit 31.2

CERTIFICATION

I, Randy J. Dehmer certify that:

I have reviewed this quarterly report on Form 10-Q of Canterbury Park Holding Corporation;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: November 13, 2023	CANTERBURY PARK HOLDING CORPORATION

	/s/ Randy J. Dehmer
	Randy J. Dehmer
	Chief Financial Officer (principal financial officer, principal accounting officer)

Exhibit 32

CERTIFICATION

Pursuant to 18 U.S.C. 1350, the undersigned Chief Executive Officer and Chief Financial Officer of Canterbury Park Holding Corporation (the “Company”) herby certifies that:

(1)

The accompanying quarterly report on Form 10-Q for the period ended September 30, 2023 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the accompanying Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	CANTERBURY PARK HOLDING CORPORATION

Dated: November 13, 2023	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer (principal executive officer)


Dated: November 13, 2023	/s/ Randy J. Dehmer
	Randy J. Dehmer
	Chief Financial Officer (principal financial officer, principal accounting officer)

Exhibit 99.1

Canterbury Park Holding Corporation Reports

2023 Third Quarter Results

Shakopee, MN – November 9, 2023 – Canterbury Park Holding Corporation (“Canterbury” or the “Company”) (NASDAQ: CPHC), today reported financial results for the three and nine months ended September 30, 2023.

	($ in thousands, except per share data and percentages)
	Three Months Ended September 30,							Nine Months Ended September 30,
	2023		2022		Change			2023		2022		Change
Net revenues	$	19,269	$	22,292		-13.6	%	$	48,910	$	53,705		-8.9	%

Net income	$	1,136	$	2,921		-61.1	%	$	9,199	$	6,450		42.6	%

Adjusted EBITDA^{(1) (2)}	$	2,850	$	5,341		-46.6	%	$	7,352	$	12,452		-41.0	%

Basic EPS	$	0.23	$	0.60		-61.7	%	$	1.87	$	1.33		40.6	%
Diluted EPS	$	0.23	$	0.60		-61.7	%	$	1.86	$	1.32		40.9	%

(1)

Adjusted EBITDA, a non-GAAP measure, excludes certain items from net income, a GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from, a substitute for, or superior to GAAP results. Definitions, disclosures, and reconciliations of non-GAAP financial information are included later in the release.

(2)

Adjusted EBITDA in the three and nine-month periods ended September 30, 2023, was impacted by professional fees related to long-term strategic growth initiatives totaling approximately $0.7 million and $1.0 million, respectively.

Management Commentary

“Canterbury Park’s third quarter results represent a continuation of solid Casino segment performance offset by higher operating costs and our previously disclosed reduced racing calendar compared to the year-ago period. Third quarter net revenue of $19.3 million and adjusted EBITDA of $2.9 million resulted in adjusted EBITDA as a percentage of revenue of 14.8%. Adjusted EBITDA as a percentage of revenue rebounded nicely from a recent low in the 2023 second quarter, and we expect our improved cost structure and operating efficiencies will stabilize this metric at an approximate mid- to high-teens percentage. Adjusted EBITDA and adjusted EBITDA as a percentage of revenue were also impacted by professional fees related to long-term strategic growth initiatives.

“Casino revenue rose 1.8% over the prior year as we saw relatively stable customer visitation and spend, particularly at the upper end of our database. Pari-mutuel revenue declined 28.0% year-over-year primarily due to a significant decline in out-of-state handle on Canterbury Park races as a result of decreased field sizes as well as weather impacts and cancelations that reduced the number of races during the period by 12% compared to the same period last year. In addition, food & beverage revenues were negatively impacted by the live racing cancelations as well as having fewer events this year compared to last year’s third quarter, particularly with Twin Cities Summer Jam not taking place in the third quarter of 2023 as it did during the third quarter of 2022.

“Development activity at Canterbury Commons™ continued to expand with a broad array of partners bringing exciting amenities to our vibrant lifestyle community and exploring new opportunities. Swervo Development Corporation (“Swervo”) has begun full-scale development of its state-of-the-art amphitheater with significant activity underway on the 37-acre site. Further, the initial success of the Badger Hill Brewery and Bravis Modern Street Food restaurant are drivers of traffic to Canterbury Commons and helping us make good on our promise of ‘Live, Work, Stay, and Play’ across the broader Canterbury Commons development.

“Our Casino business continues to deliver steady financial results and the operating practices and infrastructure we’ve put in place have allowed us to adapt to the changing environment in our operations. At the same time, we continue to leverage our strong balance sheet and stable cash flow generation as we return capital to shareholders through our quarterly cash dividend. Going forward, we are actively evaluating opportunities to further optimize our return of capital while simultaneously exploring additional ways to create new value for our shareholders. As we continue to execute on our five-year strategic plan focused on growing Casino revenue, we are also actively pursuing new opportunities that would diversify and grow our business, including through potential strategic transactions and initiatives. We are committed to continue to build a bright future for Canterbury Park.”

Canterbury Commons Development Update

Swervo broke ground and construction is underway on its state-of-the-art amphitheater which is expected to open in 2025. Canterbury has also received approval for the first phase of its barn relocation and redevelopment plan which is expected to take approximately one year to complete.

Residential and commercial construction updates related to joint ventures include:

●

Greystone completed an 11,000 square-foot brewery, taproom (Badger Hill) and Mexican restaurant (Bravis Modern Street Food) in July 2023.

●

Doran Properties Group continues its development of Phase II of the upscale Triple Crown Residences at Canterbury Park, with initial occupancy anticipated in January 2024.

●

The Omry at Canterbury, featuring 147 units of senior market rate apartments, received a certificate of occupancy for approximately half of the units and initiated move-ins in September. The remaining units are anticipated to be complete by year end.

●

A new 10,000 square-foot commercial building within the Winner’s Circle development received planning and city council approval in October. The project is anticipated to have three tenants and Greystone Construction, the development sponsor, has targeted the inclusion of two restaurant groups and a fitness group within the building. Pending financing and firm commitments from one or two tenants, the project is expected to break ground in late 2023 and open in late 2024.

Residential and commercial construction updates related to prior land sales include:

●

Pulte Homes of Minnesota has begun development of the 45-unit second phase of its new row home and townhome residences.

●

Lifestyle Communities expects to break ground in spring or summer of 2024 for Artessa at Canterbury Park, a cooperative community featuring a 44-unit building and over 5,000 square feet of amenity spaces.

●

Greystone is expected to complete the Next Steps Learning Center late 2023.

Developer and partner selection for the remaining 40 acres of Canterbury Commons continues, with additional uses potentially including offices, retail, a hotel, and restaurants.

Summary of 2023 Third Quarter Operating Results

Net revenues for the three months ended September 30, 2023, decreased $3.0 million, or 13.6%, to $19.3 million, compared to $22.3 million for the same period in 2022. Casino revenue was up 1.8%, or $185,000. This slight increase was more than offset by decreases in pari-mutuel, food & beverage, and other revenue of 28.0%, 15.4%, and 35.5%, respectively. The decrease in pari-mutuel revenue was driven by a continued decrease in out-of-state handle due to smaller field sizes and less races. Food & beverage revenues declined primarily due to Twin Cities Summer Jam not taking place in the third quarter of 2023 as it did during the third quarter of 2022. Other revenues decreased primarily due to revenues earned during the three months ended September 30, 2022, as part of the cooperative marketing agreement that expired by its terms on December 31, 2022.

Operating expenses for the three months ended September 30, 2023, were $17.5 million, a decrease of $422,000, or 2.4%, compared to operating expenses of $17.9 million for the same period in 2022. The year-over-year decrease reflects lower purse expenses related to decreased pari-mutuel revenue. Food & beverage cost of goods sold decreased with the similar decrease in food and beverage revenues. Marketing expenses decreased due to the expiration of the cooperative marketing agreement. These decreases in operating expense were somewhat offset by higher payroll expense, due primarily to annual wage increases, and increased professional expense related to the long-term strategic growth initiatives noted above.

The Company recorded a loss from equity investment of $674,000 for the three months ended September 30, 2023. For the three months ended September 30, 2022, the Company recorded a loss from equity investment of $500,000. The losses from equity investments in both periods were primarily related to the Company’s share of depreciation, amortization, and interest expense from the Doran Canterbury joint ventures.

The Company recorded interest income, net, of $537,000 for the three months ended September 30, 2023, an increase of $314,000, or 141%, compared to interest income, net, of $223,000 for the same period in 2022. With the continued strength of Canterbury’s balance sheet, the Company has increased interest income due to transferring available cash into certificates of deposit and money market funds as well as recording additional interest accrued on the TIF receivable and member loans.

The Company recorded income tax expense of $533,000 for the three months ended September 30, 2023, compared to income tax expense of $1.2 million for the three months ended September 30, 2022. The Company recorded net income of $1.1 million, or diluted earnings per share of $0.23, for the three months ended September 30, 2023, compared to net income and diluted earnings per share for the three months ended September 30, 2022, of $2.9 million and $0.60, respectively.

Adjusted EBITDA, a non-GAAP measure, for the three months ended September 30, 2023, was $2.9 million compared to adjusted EBITDA of $5.3 million for the same period in 2022.

Summary of 2023 Year-to-Date Operating Results

Net revenues for the nine months ended September 30, 2023, decreased $4.8 million, or 8.9%, to $48.9 million, compared to $53.7 million for the same period in 2022. The year-over-year decrease reflects decreases in Casino, pari-mutuel, food & beverage, and other revenues of $72,000, $2.6 million, $342,000, and $1.8 million, respectively. Reasons for the year-to-date decreases are similar to the reasons described above in the third quarter results.

Operating expenses for the nine months ended September 30, 2023, remained relatively flat at $44.5 million, a slight increase of $307,000, or 0.7%, compared to operating expenses of $44.2 million for the same period in 2022. The year-over-year increase reflects higher payroll expense and professional services expenses in the nine months ended September 30, 2023, which more than offset lower purse and marketing expenses as compared to the nine months ended September 30, 2022.

The gain on sale of land for the nine months ended September 30, 2023, was $6.5 million and was related to the sale of 37 acres to Swervo for the future development of an amphitheater. The Company recorded a gain on sale of land of $12,000 in the nine-month period ended September 30, 2022.

The Company recorded a gain from equity investment of $562,000 for the nine months ended September 30, 2023, compared to a loss from equity investment of $1.3 million for the nine months ended September 30, 2022. The net gain for the nine months ended September 30, 2023 is related to insurance proceeds received related to a claim by the joint venture against a third party while the losses from investments in the prior period were primarily related to the Company’s share of depreciation, amortization, and interest expense from the Doran Canterbury joint ventures.

The Company recorded interest income, net, of $1.4 million for the nine months ended September 30, 2023, an increase of $813,000, or 131%, compared to interest income, net, of $621,000 for the same period in 2022. With the continued strength of Canterbury’s balance sheet, the Company has increased interest income due to transferring available cash into certificates of deposit and money market funds as well as recording additional interest accrued on the TIF receivable and member loans. The Company also recognized interest related to employee retention credit funds that were received during the nine months ended September 30, 2023.

The Company recorded income tax expense of $3.7 million for the nine months ended September 30, 2023, compared to income tax expense of $2.4 million for the nine months ended September 30, 2022.

The Company recorded net income of $9.2 million, or diluted earnings per share of $1.86, for the nine months ended September 30, 2023, compared to net income and diluted earnings per share for the nine months ended September 30, 2022, of $6.5 million and $1.32, respectively.

Adjusted EBITDA was $7.4 million for the nine months ended September 30, 2023 compared to $12.5 million for the same period in 2022.

Additional Financial Information

Further financial information for the third quarter ended September 30, 2023, is presented in the accompanying tables at the end of this press release. Additional information will be provided in the Company’s Quarterly Report on Form 10-Q that will be filed with the Securities and Exchange Commission on or about November 13, 2023.

Use of Non-GAAP Financial Measures

To supplement our financial statements, we also provide investors with information about our EBITDA and Adjusted EBITDA, each of which is a non-GAAP measure, and which exclude certain items from net income, a GAAP measure. We define EBITDA as earnings before interest, taxes, depreciation and amortization. We define Adjusted EBITDA as earnings before interest income, income tax expense, depreciation and amortization, as well as excluding gain on sale of land and disposal of assets, depreciation and amortization related to equity investments, interest expense related to equity investments, and gain on insurance proceeds relating to equity investments. Neither EBITDA nor Adjusted EBITDA is a measure of performance calculated in accordance with generally accepted accounting principles ("GAAP"), and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance. See the table below, which presents reconciliations of these measures to the GAAP equivalent financial measures. We have presented EBITDA as a supplemental disclosure because we believe that, when considered with measures calculated in accordance with GAAP, EBITDA gives investors a more complete understanding of our operating results before the impact of investing and financing transactions and income taxes, and it is a widely used measure of performance and basis for valuation of companies in our industry. Other companies that provide EBITDA information may calculate EBITDA differently than we do. We have presented Adjusted EBITDA as a supplemental disclosure because we believe it enables investors to understand and assess our core operating results excluding the effect of these items and is useful to investors in allowing greater transparency related to a significant measure used by management in its financial and operational decision-making. Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business and provides a perspective on the current effects of operating decisions.

About Canterbury Park

Canterbury Park Holding Corporation (Nasdaq: CPHC) owns and operates Canterbury Park Racetrack and Casino in Shakopee, Minnesota, the only thoroughbred and quarter horse racing facility in the State. The Company generally offers live racing from May to September. The Casino hosts card games 24 hours a day, seven days a week, dealing both poker and table games. The Company also conducts year-round wagering on simulcast horse racing and hosts a variety of other entertainment and special events at its Shakopee facility. The Company is also pursuing a strategy to enhance shareholder value by the ongoing development of approximately 140 acres of underutilized land surrounding the Racetrack that was originally designated for a project known as Canterbury Commons™. The Company is pursuing several mixed-use development opportunities for the remaining underutilized land, directly and through joint ventures. For more information about the Company, please visit www.canterburypark.com.

Cautionary Statement

From time to time, in reports filed with the Securities and Exchange Commission, in press releases, and in other communications to shareholders or the investing public, we may make forward-looking statements concerning possible or anticipated future financial performance, business activities or plans. These statements are typically preceded by the words “believes,” “expects,” “anticipates,” “intends” or similar expressions. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in federal securities laws. Shareholders and the investing public should understand that these forward-looking statements are subject to risks and uncertainties which could affect our actual results and cause actual results to differ materially from those indicated in the forward-looking statements. We report these risks and uncertainties in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. They include, but are not limited to: sensitivity to reductions in discretionary spending as a result of downturns in the economy; the termination of the Cooperative Marketing Agreement with the Shakopee Mdewakanton Sioux Community and the purse enhancement payments and marketing payments made under such agreement; the occurrence of epidemics, pandemics, outbreaks of disease, and other adverse public health developments; the inability to attract a sufficient number of horses and trainers; a lack of confidence in core operations resulting in decreasing customer retention and engagement; personal injury litigation due to the inherently dangerous nature of horse racing; material fluctuations in attendance at the Racetrack; material changes in the level of wagering by patrons; any decline in interest in horse racing or the unbanked card games offered in the Casino; competition from other venues offering racing, unbanked card games or other forms of wagering; competition from other sports and entertainment options; increases in compensation and employee benefit costs; higher than expected expense related to new marketing initiatives; the impact of wagering products and technologies introduced by competitors; the general health of the gaming sector; legislative and regulatory decisions and changes; our ability to successfully develop our real estate, including the effect of competition on our real estate development operations and our reliance on our current and future development partners; temporary disruptions or changes in access to our facilities caused by ongoing infrastructure improvements; inclement weather and other conditions affecting the ability to conduct live racing; technology and/or key system failures; cybersecurity breaches; the failure to receive reimbursement for certain public infrastructure improvements we have committed to undertake; the general effects of inflation; our ability to attract and retain qualified personnel; dividends that may or may not be issued at the discretion of our Board of Directors; and other factors that are beyond our ability to control or predict.

The forward-looking statements in this press release speak only as of the date of this press release. Except as required by law, Canterbury assumes no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

# # #

Investor Contacts:

Randy Dehmer

Senior Vice President and Chief Financial Officer

Canterbury Park Holding Corporation

952-233-4828 or investorrelations@canterburypark.com

Richard Land, Jim Leahy

JCIR

212-835-8500 or cphc@jcir.com

- Financial tables follow –

CANTERBURY PARK HOLDING CORPORATION'S

SUMMARY OF OPERATING RESULTS

(UNAUDITED)

	Three months ended						Nine months ended
	September 30,						September 30,
	2023			2022			2023			2022
Operating Revenues:
Casino	$	10,224,216		$	10,039,527		$	30,322,149		$	30,394,387
Pari-mutuel		3,405,010			4,730,827			7,009,710			9,599,070
Food and Beverage		3,310,759			3,913,320			6,808,242			7,150,715
Other		2,328,564			3,608,729			4,769,694			6,560,477
Total Net Revenues	$	19,268,549		$	22,292,403		$	48,909,795		$	53,704,649
Operating Expenses		(17,461,813	)		(17,884,034	)		(44,486,784	)		(44,179,373	)
Gain on Sale of Land		-			-			6,489,976			12,151
Income from Operations		1,806,736			4,408,369			10,912,987			9,537,427
Other (Loss)/Gain, net		(137,437	)		(277,472	)		1,995,344			(653,247	)
Income Tax Expense		(533,000	)		(1,209,777	)		(3,709,000	)		(2,434,078	)
Net Income		1,136,299			2,921,120			9,199,331			6,450,102
Basic Net Income Per Common Share	$	0.23		$	0.60		$	1.87		$	1.33
Diluted Net Income Per Common Share	$	0.23		$	0.60		$	1.86		$	1.32

RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA

(UNAUDITED)

	Three months ended						Nine months ended
	September 30,						September 30,
	2023			2022			2023			2022
NET INCOME	$	1,136,299		$	2,921,120		$	9,199,331		$	6,450,102
Interest income, net		(536,904	)		(222,671	)		(1,433,353	)		(620,811	)
Income tax expense		533,000			1,209,777			3,709,000			2,434,078
Depreciation		831,379			747,267			2,308,272			2,234,790
EBITDA		1,963,774			4,655,493			13,783,250			10,498,159
Gain on insurance proceeds related to equity investments		-			-			(2,528,901	)		-
Gain on disposal of assets		(19,265	)		-			(19,265	)		-
Gain on sale of land		-			-			(6,489,976	)		(12,151	)
Depreciation and amortization related to equity investments		438,011			445,181			1,313,986			1,340,856
Interest expense related to equity investments		467,571			240,418			1,292,627			625,401
ADJUSTED EBITDA	$	2,850,091		$	5,341,092		$	7,351,721		$	12,452,265

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2023	Nov. 10, 2023
Document Information [Line Items]
Entity Central Index Key	0001672909
Entity Registrant Name	Canterbury Park Holding Corp
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-37858
Entity Incorporation, State or Country Code	MN
Entity Tax Identification Number	47-5349765
Entity Address, Address Line One	1100 Canterbury Road
Entity Address, City or Town	Shakopee
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55379
City Area Code	952
Local Phone Number	445-7223
Title of 12(b) Security	Common Stock Common stock, $.01 par value
Trading Symbol	CPHC
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,944,642

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 25,727,477	$ 12,989,087
Restricted cash	2,348,076	3,116,916
Short-term investments	4,500,000	5,000,000
Accounts receivable, net of allowance of $19,250 for both periods	1,619,887	618,365
Employee retention credit receivable	0	6,103,236
Inventory	284,443	262,073
Prepaid expenses	499,149	557,520
Income taxes receivable and prepaid income taxes	2,426,364	2,052,364
Total current assets	37,405,396	30,699,561
LONG-TERM ASSETS
Deposits	0	27,000
Other prepaid expenses	8,414	41,774
TIF receivable	13,801,141	13,294,337
Operating lease right-of-use asset	53,026	0
Equity investment	6,789,772	6,863,517
Land held for development	1,229,475	2,303,010
Land, buildings, and equipment, net	39,012,223	36,491,660
Total long-term assets	63,832,358	61,576,618
TOTAL ASSETS	101,237,754	92,276,179
CURRENT LIABILITIES
Accounts payable	3,512,863	3,368,683
Casino accruals	2,687,596	2,684,444
Accrued wages and payroll taxes	2,396,327	1,814,879
Cash dividend payable	345,369	341,602
Accrued property taxes	532,891	795,646
Deferred revenue	366,999	413,442
Payable to horsepersons	225,798	993,529
Current portion of operating lease obligations	25,352	0
Current portion of finance lease obligations	1,570	18,973
Total current liabilities	10,094,765	10,431,198
LONG-TERM LIABILITIES
Deferred income taxes	8,250,015	7,474,015
Investee losses in excess of equity investment	2,550,187	3,185,923
Operating lease obligations, net of current portion	27,674	0
Finance lease obligations, net of current portion	8,184	0
Total long-term liabilities	10,836,060	10,659,938
TOTAL LIABILITIES	20,930,825	21,091,136
STOCKHOLDERS’ EQUITY
Common stock, $.01 par value, 10,000,000 shares authorized, 4,944,642 and 4,888,975 respectively, shares issued and outstanding	49,446	48,890
Additional paid-in capital	26,879,814	25,914,644
Retained earnings	53,377,669	45,221,509
Total stockholders’ equity	80,306,929	71,185,043
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	101,237,754	92,276,179
Related Party [Member]
CURRENT ASSETS
Accounts receivable, net of allowance of $19,250 for both periods	2,000	11,000
LONG-TERM ASSETS
Related party receivable	$ 2,938,307	$ 2,555,320

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
OPERATING REVENUES:
Net Revenues	$ 19,268,549	$ 22,292,403	$ 48,909,795	$ 53,704,649
OPERATING EXPENSES:
Purse expense	2,594,270	2,979,947	6,034,508	6,931,243
Minnesota Breeders’ Fund	308,038	323,156	822,797	874,464
Salaries and benefits	7,245,775	6,860,590	19,922,853	18,881,258
Depreciation and amortization	831,379	747,267	2,308,272	2,234,790
Advertising and marketing	887,197	1,567,163	1,817,180	2,739,638
Professional and contracted services	2,284,181	1,571,128	4,857,229	3,781,005
Gain on disposal of assets	(19,265)	0	(19,265)	0
Other operating expenses	1,390,339	1,602,933	4,117,388	3,800,281
Total Operating Expenses	17,461,813	17,884,034	44,486,784	44,179,373
Gain on sale of land	0	0	6,489,976	12,151
INCOME FROM OPERATIONS	1,806,736	4,408,369	10,912,987	9,537,427
OTHER INCOME (LOSS)
(Loss) gain from equity investment	(674,341)	(500,143)	561,991	(1,274,058)
Interest income, net	536,904	222,671	1,433,353	620,811
Net Other (Loss) Income	(137,437)	(277,472)	1,995,344	(653,247)
INCOME BEFORE INCOME TAXES	1,669,299	4,130,897	12,908,331	8,884,180
INCOME TAX EXPENSE	(533,000)	(1,209,777)	(3,709,000)	(2,434,078)
NET INCOME	$ 1,136,299	$ 2,921,120	$ 9,199,331	$ 6,450,102
Basic earnings per share (in dollars per share)	$ 0.23	$ 0.6	$ 1.87	$ 1.33
Diluted earnings per share (in dollars per share)	$ 0.23	$ 0.6	$ 1.86	$ 1.32
Weighted average basic shares outstanding (in shares)	4,933,961	4,872,674	4,913,560	4,845,743
Weighted average diluted shares (in shares)	4,950,524	4,901,189	4,941,100	4,879,803
Cash dividends declared per share (in dollars per share)	$ 0.07	$ 0.07	$ 0.21	$ 0.28
Casino [Member]
OPERATING REVENUES:
Net Revenues	$ 10,224,216	$ 10,039,527	$ 30,322,149	$ 30,394,387
Pari-mutuel [Member]
OPERATING REVENUES:
Net Revenues	3,405,010	4,730,827	7,009,710	9,599,070
Food and Beverage [Member]
OPERATING REVENUES:
Net Revenues	3,310,759	3,913,320	6,808,242	7,150,715
OPERATING EXPENSES:
Cost of goods and services sold	1,161,665	1,365,748	2,567,561	2,771,338
Product and Service, Other [Member]
OPERATING REVENUES:
Net Revenues	2,328,564	3,608,729	4,769,694	6,560,477
Other Pari-mutuel Expenses [Member]
OPERATING EXPENSES:
Cost of goods and services sold	210,212	212,102	691,519	740,282
Public Utilities [Member]
OPERATING EXPENSES:
Cost of goods and services sold	$ 568,022	$ 654,000	$ 1,366,742	$ 1,425,074

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2021	4,812,085
Balance at Dec. 31, 2021	$ 48,121	$ 24,894,571	$ 39,410,534	$ 64,353,226
Stock-based compensation	0	325,152	0	325,152
Dividend declared	$ 0	0	(1,360,369)	(1,360,369)
401(k) stock match (in shares)	21,191
401(k) stock match	$ 212	470,100	0	470,312
Net income	$ 0	0	6,450,102	6,450,102
Issuance of deferred stock awards (in shares)	41,816
Issuance of deferred stock awards	$ 418	(213,026)	0	(212,608)
Shares issued under Employee Stock Purchase Plan (in shares)	4,939
Shares issued under Employee Stock Purchase Plan	$ 49	72,505	0	72,554
Balance (in shares) at Sep. 30, 2022	4,880,031
Balance at Sep. 30, 2022	$ 48,800	25,549,302	44,500,267	70,098,369
Balance (in shares) at Jun. 30, 2022	4,872,593
Balance at Jun. 30, 2022	$ 48,726	25,273,814	41,920,229	67,242,769
Stock-based compensation	0	110,290	0	110,290
Dividend declared	$ 0	0	(341,082)	(341,082)
401(k) stock match (in shares)	7,438
401(k) stock match	$ 74	165,198	0	165,272
Net income	$ 0	0	2,921,120	2,921,120
Balance (in shares) at Sep. 30, 2022	4,880,031
Balance at Sep. 30, 2022	$ 48,800	25,549,302	44,500,267	70,098,369
Balance (in shares) at Dec. 31, 2022	4,888,975
Balance at Dec. 31, 2022	$ 48,890	25,914,644	45,221,509	71,185,043
Stock-based compensation	0	398,269	0	398,269
Dividend declared	$ 0	0	(1,043,171)	(1,043,171)
401(k) stock match (in shares)	28,597
401(k) stock match	$ 286	644,287	0	644,573
Net income	$ 0	0	9,199,331	9,199,331
Issuance of deferred stock awards (in shares)	22,197
Issuance of deferred stock awards	$ 221	(171,970)	0	(171,749)
Shares issued under Employee Stock Purchase Plan (in shares)	4,873
Shares issued under Employee Stock Purchase Plan	$ 49	94,584	0	94,633
Balance (in shares) at Sep. 30, 2023	4,944,642
Balance at Sep. 30, 2023	$ 49,446	26,879,814	53,377,669	80,306,929
Balance (in shares) at Jun. 30, 2023	4,933,844
Balance at Jun. 30, 2023	$ 49,338	26,538,005	52,586,742	79,174,085
Stock-based compensation	0	132,436	0	132,436
Dividend declared	$ 0	0	(345,372)	(345,372)
401(k) stock match (in shares)	10,798
401(k) stock match	$ 108	209,373	0	209,481
Net income	$ 0	0	1,136,299	1,136,299
Balance (in shares) at Sep. 30, 2023	4,944,642
Balance at Sep. 30, 2023	$ 49,446	$ 26,879,814	$ 53,377,669	$ 80,306,929

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Operating Activities:
Net income	$ 1,136,299		$ 2,921,120	$ 9,199,331	$ 6,450,102
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation				2,308,272	2,234,790
Stock-based compensation expense				398,269	325,152
Stock-based employee match contribution				644,573	470,312
Gain on disposal of assets				(19,265)	0
Gain on sale of land	0		0	(6,489,976)	(12,151)
Deferred income taxes				776,000	13,900
(Gain) loss from equity investment	674,341	$ (1,858,512)	500,143	(561,991)	1,274,058
Changes in operating assets and liabilities:
Accounts receivable				(1,001,522)	(1,499,353)
Employee retention credit				6,103,236	211,232
Increase in TIF receivable				(502,644)	(501,306)
Inventory, prepaid expenses and deposits				96,360	78,221
Income taxes receivable/payable and prepaid income taxes				(374,000)	(1,286,931)
Operating lease right-of-use asset				24,524	22,786
Operating lease liabilities				(24,524)	(22,786)
Accounts payable				116,379	1,595,149
Deferred revenue				(46,443)	(160,872)
Casino accruals				3,152	(560,636)
Accrued wages and payroll taxes				581,448	482,430
Accrued property taxes				(262,755)	197,175
Payable to horsepersons				(767,731)	557,568
Net cash provided by operating activities				10,200,693	9,868,841
Investing Activities:
Additions to land, buildings, and equipment				(5,577,116)	(2,663,322)
Proceeds from disposal of assets				22,500	0
Proceeds from sale of land				8,336,359	1,159,640
Additions for TIF eligible improvements				(4,160)	(31,697)
Equity investment contributions				0	(397,807)
Increase in related party receivable				(382,987)	(145,041)
Proceeds from sale of short term investments				500,000	0
Net cash provided by (used in) investing activities				2,894,596	(2,078,227)
Financing Activities:
Proceeds from issuance of common stock				94,633	72,554
Cash dividend paid to shareholders				(1,039,404)	(1,019,288)
Payments for taxes related to net share settlement of equity awards				(171,749)	(212,608)
Principal payments on finance lease				(9,219)	(20,170)
Net cash used in financing activities				(1,125,739)	(1,179,512)
Net increase in cash, cash equivalents, and restricted cash				11,969,550	6,611,102
Cash, cash equivalents, and restricted cash at beginning of period		$ 16,106,003		16,106,003	15,598,753	$ 15,598,753
Cash, cash equivalents, and restricted cash at end of period	28,075,553		22,209,855	28,075,553	22,209,855	$ 16,106,003
Schedule of non-cash investing and financing activities
Additions to land, buildings, and equipment funded through accounts payable				28,000	53,000
Dividend declared but not yet paid	$ 345,000		$ 341,000	345,000	341,000
Change in investee losses in excess of equity investments				(636,000)	1,466,000
ROU assets obtained in exchange for operating lease obligations				77,550	0
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds				3,257,000	3,707,000
Interest paid				$ 0	$ 1,000

Note 1 - Overview and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

●

Identification of the contract, or contracts, with a customer

●

Identification of the performance obligations in the contract

●

Determination of the transaction price

●

Allocation of the transaction price to the performance obligation in the contract

●

Recognition of revenue when, or as, we satisfy a performance obligation

The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.

Note 2 - Stock-based Compensation

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

2. STOCK-BASED COMPENSATION

Long Term Incentive Plan and Award of Deferred Stock

Board of Directors Stock Options, Deferred Stock Awards, and Restricted Stock Grants

Employee Deferred Stock Awards

Employee deferred stock transactions during the nine months ended September 30, 2023 are summarized as follows:

				*Weighted*
				*Average*
	*Deferred*			*Fair Value*
	*Stock*			*Per Share*
Non-Vested Balance, December 31, 2022		41,200		$	16.62
Granted		19,020			25.52
Vested		(20,050	)		14.33
Forfeited		(1,950	)		19.07
Non-Vested Balance, September 30, 2023		38,220		$	22.13

Note 3 - Net Income Per Share Computations

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

3. NET INCOME PER SHARE COMPUTATIONS

The following is a reconciliation of the numerator and denominator of the earnings per common share computations for the three and nine months ended September 30, 2023 and 2022:

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2023*		*2022*		*2023*		*2022*
Net income (numerator) amounts used for basic and diluted per share computations:	$	1,136,299	$	2,921,120	$	9,199,331	$	6,450,102

Weighted average shares (denominator) of common stock outstanding:
Basic		4,933,961		4,872,674		4,913,560		4,845,743
Plus dilutive effect of deferred stock awards		16,563		28,515		27,540		34,060
Diluted		4,950,524		4,901,189		4,941,100		4,879,803

Net income per common share:
Basic	$	0.23	$	0.60	$	1.87	$	1.33
Diluted		0.23		0.60		1.86		1.32

Note 4 - General Credit Agreement

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

4. GENERAL CREDIT AGREEMENT

Note 5 - Operating Segments

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

5. OPERATING SEGMENTS

The following tables represent a disaggregation of revenues from contracts with customers along with the Company’s operating segments (in 000’s):

	*Nine Months Ended September 30, 2023*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*		*Total*
Net revenues from external customers	$	11,186		$	30,322	$	7,402	$	—	$	48,910
Intersegment revenues		194			—		893		—		1,087
Net interest income		754			—		—		679		1,433
Depreciation		1,954			225		129		—		2,308
Segment income (loss) before income taxes		(820	)		6,940		2,137		7,576		15,833
Segment tax expense (benefit)		(1,076	)		1,994		614		2,177		3,709

		*September 30, 2023*
Segment Assets		$	88,641			$	2,199			$	33,344			$	33,084			$	157,268

	*Nine Months Ended September 30, 2022*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*			*Total*
Net revenues from external customers	$	15,406		$	30,395	$	7,904	$	—		$	53,705
Intersegment revenues		150			—		785		—			935
Net interest income		24			—		—		597			621
Depreciation		1,860			226		149		—			2,235
Segment income (loss) before income taxes		1,241			8,474		2,383		(846	)		11,252
Segment tax expense (benefit)		(309	)		2,322		653		(232	)		2,434

		*December 31, 2022*
Segment Assets		$	71,338			$	2,425			$	30,341			$	26,475			$	130,579

The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals (in 000’s):

	*Nine Months Ended September 30,*
	*2023*			*2022*
Revenues
Total net revenue for reportable segments	$	49,997		$	54,640
Elimination of intersegment revenues		(1,087	)		(935	)
Total consolidated net revenues	$	48,910		$	53,705

Income before income taxes
Total segment income (loss) before income taxes	$	15,833		$	11,252
Elimination of intersegment (income) loss before income taxes		(2,925	)		(2,368	)
Total consolidated income before income taxes	$	12,908		$	8,884

	*September 30,*			*December 31,*
	*2023*			*2022*
Assets
Total assets for reportable segments	$	157,268		$	130,579
Elimination of intercompany balances		(56,030	)		(38,303	)
Total consolidated assets	$	101,238		$	92,276

Note 6 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

6. COMMITMENTS AND CONTINGENCIES

Note 7 - Cooperative Marketing Agreement

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Collaborative Arrangement Disclosure [Text Block]

7. COOPERATIVE MARKETING AGREEMENT

As noted above and affirmed in the Fifth Amendment, SMSC was obligated to make an annual purse enhancement of $7,380,000 and an annual marketing payment of $1,620,000 for 2022.

Note 8 - Real Estate Development

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Real Estate Disclosure [Text Block]

8. REAL ESTATE DEVELOPMENT

Equity Investments

Doran Canterbury I, LLC

Doran Canterbury II, LLC

Canterbury DBSV Development, LLC

	*Equity Investment*			*Investee losses in excess of equity investment*			*Net Equity Investment*
Net Equity Investment Balance at 12/31/22	$	6,863,517		$	(3,185,923	)	$	3,677,594

Q1 Equity investment income (loss)		(23,232	)		1,881,744			1,858,512

Q2 Equity investment income (loss)		(26,071	)		(596,109	)		(622,180	)

Q3 Equity investment income (loss)		(24,442	)		(649,899	)		(674,341	)

Net Equity Investment Balance at 9/30/23	$	6,789,772		$	(2,550,187	)	$	4,239,585

Tax Increment Financing

Note 9 - Leases

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Leases of Lessee and Commitments Disclosure [Text Block]

9. LEASES

The following table shows the classification of the right of use assets on our consolidated balance sheets:

		*September 30,*		*December 31,*
	*Balance Sheet Location*	*2023*		*2022*
Assets
Finance	Land, buildings and equipment, net (1)	$	9,754	$	18,973
Operating	Operating lease right-of-use assets		53,026		-
Total Leased Assets		$	62,780	$	18,973

1 – Finance lease assets are net of accumulated amortization of $118,044 and $106,586 as of September 30, 2023 and December 31, 2022, respectively.

The following table shows the lease terms and discount rates related to our leases:

	*September 30,*			*December 31,*
	*2023*			*2022*
Weighted average remaining lease term (in years):
Finance		5.2			0.7
Operating		0.8			0.0
Weighted average discount rate (%):
Finance		8.5	%		5.0	%
Operating		8.0	%		0.0	%

The maturity of operating leases and finance leases as of September 30, 2023 are as follows:

Nine Months Ended September 30, 2023	*Operating leases*			*Finance leases*
2023 remaining	$	—		$	585
2024		26,785			2,339
2025		28,230			2,339
2026		—			2,339
2027 and beyond		—			4,485
Total minimum lease obligations		55,015			12,088
Less: amounts representing interest		(1,989	)		(2,334	)
Present value of minimum lease payments		53,026			9,754
Less: current portion		(25,352	)		(1,570	)
Lease obligations, net of current portion	$	27,674		$	8,184

Note 10 - Related Party Receivables

9 Months Ended

Sep. 30, 2023

Notes to Financial Statements

10. RELATED PARTY RECEIVABLES

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Accounts Receivable [Policy Text Block]

Employee Retention Credit ("ERC") [Policy Text Block]

Revenue Recognition, Deferred Revenue [Policy Text Block]

Due To Organization [Policy Text Block]

Revenue from Contract with Customer [Policy Text Block]

●

Identification of the contract, or contracts, with a customer

●

Identification of the performance obligations in the contract

●

Determination of the transaction price

●

Allocation of the transaction price to the performance obligation in the contract

●

Recognition of revenue when, or as, we satisfy a performance obligation

The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.

Note 2 - Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Nonvested Share Activity [Table Text Block]

				*Weighted*
				*Average*
	*Deferred*			*Fair Value*
	*Stock*			*Per Share*
Non-Vested Balance, December 31, 2022		41,200		$	16.62
Granted		19,020			25.52
Vested		(20,050	)		14.33
Forfeited		(1,950	)		19.07
Non-Vested Balance, September 30, 2023		38,220		$	22.13

Note 3 - Net Income Per Share Computations (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2023*		*2022*		*2023*		*2022*
Net income (numerator) amounts used for basic and diluted per share computations:	$	1,136,299	$	2,921,120	$	9,199,331	$	6,450,102

Weighted average shares (denominator) of common stock outstanding:
Basic		4,933,961		4,872,674		4,913,560		4,845,743
Plus dilutive effect of deferred stock awards		16,563		28,515		27,540		34,060
Diluted		4,950,524		4,901,189		4,941,100		4,879,803

Net income per common share:
Basic	$	0.23	$	0.60	$	1.87	$	1.33
Diluted		0.23		0.60		1.86		1.32

Note 5 - Operating Segments (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

	*Nine Months Ended September 30, 2023*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*		*Total*
Net revenues from external customers	$	11,186		$	30,322	$	7,402	$	—	$	48,910
Intersegment revenues		194			—		893		—		1,087
Net interest income		754			—		—		679		1,433
Depreciation		1,954			225		129		—		2,308
Segment income (loss) before income taxes		(820	)		6,940		2,137		7,576		15,833
Segment tax expense (benefit)		(1,076	)		1,994		614		2,177		3,709

		*September 30, 2023*
Segment Assets		$	88,641			$	2,199			$	33,344			$	33,084			$	157,268

	*Nine Months Ended September 30, 2022*
	*Horse Racing*			*Casino*		*Food and Beverage*		*Development*			*Total*
Net revenues from external customers	$	15,406		$	30,395	$	7,904	$	—		$	53,705
Intersegment revenues		150			—		785		—			935
Net interest income		24			—		—		597			621
Depreciation		1,860			226		149		—			2,235
Segment income (loss) before income taxes		1,241			8,474		2,383		(846	)		11,252
Segment tax expense (benefit)		(309	)		2,322		653		(232	)		2,434

		*December 31, 2022*
Segment Assets		$	71,338			$	2,425			$	30,341			$	26,475			$	130,579

Reconciliation of Revenue from Segments to Consolidated [Table Text Block]

	*Nine Months Ended September 30,*
	*2023*			*2022*
Revenues
Total net revenue for reportable segments	$	49,997		$	54,640
Elimination of intersegment revenues		(1,087	)		(935	)
Total consolidated net revenues	$	48,910		$	53,705

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

Income before income taxes
Total segment income (loss) before income taxes	$	15,833		$	11,252
Elimination of intersegment (income) loss before income taxes		(2,925	)		(2,368	)
Total consolidated income before income taxes	$	12,908		$	8,884

Reconciliation of Assets from Segment to Consolidated [Table Text Block]

	*September 30,*			*December 31,*
	*2023*			*2022*
Assets
Total assets for reportable segments	$	157,268		$	130,579
Elimination of intercompany balances		(56,030	)		(38,303	)
Total consolidated assets	$	101,238		$	92,276

Note 8 - Real Estate Development (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Equity Method Investments [Table Text Block]

	*Equity Investment*			*Investee losses in excess of equity investment*			*Net Equity Investment*
Net Equity Investment Balance at 12/31/22	$	6,863,517		$	(3,185,923	)	$	3,677,594

Q1 Equity investment income (loss)		(23,232	)		1,881,744			1,858,512

Q2 Equity investment income (loss)		(26,071	)		(596,109	)		(622,180	)

Q3 Equity investment income (loss)		(24,442	)		(649,899	)		(674,341	)

Net Equity Investment Balance at 9/30/23	$	6,789,772		$	(2,550,187	)	$	4,239,585

Note 9 - Leases (Tables)

9 Months Ended

Sep. 30, 2023

Notes Tables

Assets, Lessee [Table Text Block]

		*September 30,*		*December 31,*
	*Balance Sheet Location*	*2023*		*2022*
Assets
Finance	Land, buildings and equipment, net (1)	$	9,754	$	18,973
Operating	Operating lease right-of-use assets		53,026		-
Total Leased Assets		$	62,780	$	18,973

Lease, Cost [Table Text Block]

	*September 30,*			*December 31,*
	*2023*			*2022*
Weighted average remaining lease term (in years):
Finance		5.2			0.7
Operating		0.8			0.0
Weighted average discount rate (%):
Finance		8.5	%		5.0	%
Operating		8.0	%		0.0	%

Lessee, Operating and Financing, Lease Liability Maturity [Table Text Block]

Nine Months Ended September 30, 2023	*Operating leases*			*Finance leases*
2023 remaining	$	—		$	585
2024		26,785			2,339
2025		28,230			2,339
2026		—			2,339
2027 and beyond		—			4,485
Total minimum lease obligations		55,015			12,088
Less: amounts representing interest		(1,989	)		(2,334	)
Present value of minimum lease payments		53,026			9,754
Less: current portion		(25,352	)		(1,570	)
Lease obligations, net of current portion	$	27,674		$	8,184

Note 1 - Overview and Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2021	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Employee Retention Credit Receivable	$ 0			$ 0		$ 6,103,236
Labor and Related Expense	$ 7,245,775	$ 6,860,590	$ 6,103,236	19,922,853	$ 18,881,258
Funds Due To Organization				$ 6,174,000	$ 5,877,000

Note 2 - Stock-based Compensation (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Mar. 31, 2023	Dec. 31, 2022
CPHC Long Term Incentive Plan (LTI Plan) [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number (in shares)	0
Non-Employee Board Member Stock Option and Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	7,818
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 23.01
Non-Employee Board Member Stock Option and Restricted Stock [Member] \| Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)	10 years
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	100.00%
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in shares)			0
Employee Deferred Stock Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years	4 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)	19,020	18,600
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)	$ 25.52	$ 21.62
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Nonvested, Number (in shares)	38,220			41,200
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount	$ 744,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition (Year)	3 years 6 months
Employee Deferred Stock Award [Member] \| CPHC Long Term Incentive Plan (LTI Plan) [Member]
Share-Based Payment Arrangement, Expense	$ 398,000	$ 325,000
Employee Deferred Stock Award [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	1 year
Employee Deferred Stock Award [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period (Year)	4 years

Note 2 - Stock-based Compensation - Unvested Restricted Stock and Deferred Stock (Details) - Employee Deferred Stock Award [Member] - $ / shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Non-Vested Balance (in shares)	41,200
Non-Vested Balance, weighted average fair value per share (in dollars per share)	$ 16.62
Granted (in shares)	19,020	18,600
Granted, weighted average fair value per share (in dollars per share)	$ 25.52	$ 21.62
Vested (in shares)	(20,050)
Vested, weighted average fair value per share (in dollars per share)	$ 14.33
Forfeited (in shares)	(1,950)
Forfeited, weighted average fair value per share (in dollars per share)	$ 19.07
Non-Vested Balance (in shares)	38,220
Non-Vested Balance, weighted average fair value per share (in dollars per share)	$ 22.13

Note 3 - Net Income Per Share Computations - Reconciliation of Net Common Share Computation (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Net income	$ 1,136,299	$ 2,921,120	$ 9,199,331	$ 6,450,102
Basic (in shares)	4,933,961	4,872,674	4,913,560	4,845,743
Plus dilutive effect of deferred stock awards (in shares)	16,563	28,515	27,540	34,060
Diluted (in shares)	4,950,524	4,901,189	4,941,100	4,879,803
Basic earnings per share (in dollars per share)	$ 0.23	$ 0.6	$ 1.87	$ 1.33
Diluted earnings per share (in dollars per share)	$ 0.23	$ 0.6	$ 1.86	$ 1.32

Note 4 - General Credit Agreement (Details Textual)	Sep. 30, 2023 USD ($)
Long-term Line of Credit, Total	$ 0
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	10,000,000
Letter of Credit [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 2,000,000

Note 5 - Operating Segments (Details Textual)	9 Months Ended
Note 5 - Operating Segments (Details Textual)	Sep. 30, 2023
Number of Reportable Segments	4
Source of Revenues of Horse Racing Segment	25.00%

Note 5 - Operating Segments - Disaggregation of Revenue from Contracts with Customers (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Net Revenues	$ 19,268,549	$ 22,292,403	$ 48,909,795	$ 53,704,649
Interest income, net	536,904	222,671	1,433,353	620,811
Depreciation			2,308,272	2,234,790
Segment income (loss) before income taxes	1,669,299	4,130,897	12,908,331	8,884,180
Segment tax expense (benefit)	533,000	$ 1,209,777	3,709,000	2,434,078
Segment Assets	101,237,754		101,237,754		$ 92,276,179
Operating Segments [Member]
Net Revenues			48,910,000		53,705,000
Interest income, net			1,433,000		621,000
Depreciation			2,308,000		2,235,000
Segment income (loss) before income taxes			15,833,000		11,252,000
Segment tax expense (benefit)					2,434,000
Segment Assets	157,268,000		157,268,000		130,579,000
Intersegment Eliminations [Member]
Net Revenues			1,087,000	935,000	935,000
Segment income (loss) before income taxes			(2,925,000)	$ (2,368,000)
Segment Assets	(56,030,000)		(56,030,000)		(38,303,000)
Horse Racing [Member]
Segment tax expense (benefit)			(1,076,000)
Horse Racing [Member] \| Operating Segments [Member]
Net Revenues			11,186,000		15,406,000
Interest income, net			754,000		24,000
Depreciation			1,954,000		1,860,000
Segment income (loss) before income taxes			(820,000)		1,241,000
Segment tax expense (benefit)					(309,000)
Segment Assets	88,641,000		88,641,000		71,338,000
Horse Racing [Member] \| Intersegment Eliminations [Member]
Net Revenues			194,000		150,000
Card Casino [Member]
Segment tax expense (benefit)			1,994,000
Card Casino [Member] \| Operating Segments [Member]
Net Revenues			30,322,000		30,395,000
Interest income, net			0		0
Depreciation			225,000		226,000
Segment income (loss) before income taxes			6,940,000		8,474,000
Segment tax expense (benefit)					2,322,000
Segment Assets	2,199,000		2,199,000		2,425,000
Card Casino [Member] \| Intersegment Eliminations [Member]
Net Revenues			0		0
Food and Beverage Segment [Member]
Segment tax expense (benefit)			614,000
Food and Beverage Segment [Member] \| Operating Segments [Member]
Net Revenues			7,402,000		7,904,000
Interest income, net			0		0
Depreciation			129,000		149,000
Segment income (loss) before income taxes			2,137,000		2,383,000
Segment tax expense (benefit)					653,000
Segment Assets	33,344,000		33,344,000		30,341,000
Food and Beverage Segment [Member] \| Intersegment Eliminations [Member]
Net Revenues			893,000		785,000
Development [Member]
Segment tax expense (benefit)			2,177,000
Development [Member] \| Operating Segments [Member]
Net Revenues			0		0
Interest income, net			679,000		597,000
Depreciation			0		0
Segment income (loss) before income taxes			7,576,000		(846,000)
Segment tax expense (benefit)					(232,000)
Segment Assets	$ 33,084,000		33,084,000		26,475,000
Development [Member] \| Intersegment Eliminations [Member]
Net Revenues			$ 0		$ 0

Note 5 - Operating Segments - Reconciliation of Segment Revenues, Income Before Income Taxes, and Assets (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Revenues	$ 19,268,549	$ 22,292,403	$ 48,909,795	$ 53,704,649
Reportable Legal Entities [Member]
Revenues			49,997,000	54,640,000
Intersegment Eliminations [Member]
Revenues			$ 1,087,000	$ 935,000	$ 935,000

Note 5 - Operating Segments- Income Before Income Taxes (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income before income taxes	$ 1,669,299	$ 4,130,897	$ 12,908,331	$ 8,884,180
Reportable Legal Entities [Member]
Income before income taxes			15,833,000	11,252,000
Intersegment Eliminations [Member]
Income before income taxes			$ (2,925,000)	$ (2,368,000)

Note 5 - Operating Segments- Assets (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Total consolidated assets	$ 101,237,754	$ 92,276,179
Reportable Legal Entities [Member]
Total consolidated assets	157,268,000	130,579,000
Intersegment Eliminations [Member]
Total consolidated assets	$ (56,030,000)	$ (38,303,000)

Note 6 - Commitments and Contingencies (Details Textual) - Indemnity Agreement [Member] - USD ($)	Oct. 27, 2022	Dec. 21, 2021
Debt Instrument, Maximum Reimbursement and Indemnification Amount		$ 5,000,000
Debt Instrument, Additional Reimbursement and Indemnification Amount	$ 700,000

Note 7 - Cooperative Marketing Agreement (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Obligation by Third Party Per Agreement, Due Remainder of Fiscal Year					$ 7,380,000
Revenue from Contract with Customer, Including Assessed Tax	$ 19,268,549	$ 22,292,403	$ 48,909,795	$ 53,704,649
Marketing and Advertising Expense	887,197	1,567,163	1,817,180	2,739,638
Depreciation			2,308,272	2,234,790
Product and Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 2,328,564	3,608,729	$ 4,769,694	6,560,477
Cooperative Marketing Agreement (CMA)1 [Member]
Marketing Agreement, Marketing Payment Obligation, to be Paid, Year One					$ 1,620,000
Marketing and Advertising Expense		916,000		1,603,000
Depreciation		61,000		161,000
Cooperative Marketing Agreement (CMA)1 [Member] \| Product and Service, Other [Member]
Revenue from Contract with Customer, Including Assessed Tax		$ 977,000		$ 1,764,000

Note 8 - Real Estate Development (Details Textual)		3 Months Ended				9 Months Ended
Note 8 - Real Estate Development (Details Textual)	Jan. 25, 2022 USD ($)	Sep. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)	Sep. 30, 2020 a	Jul. 01, 2020	Jun. 16, 2020 a	Sep. 27, 2018 a
Income (Loss) from Equity Method Investments		$ (674,341)	$ (622,180)	$ 1,858,512	$ (500,143)	$ 561,991	$ (1,274,058)
Investee Losses in Excess of Equity Investment		2,550,187				2,550,187		$ 3,185,923
Payments to Acquire Equity Method Investments						(0)	397,807
TIF Improvement Costs									$ 23,336,500
Estimated Cost of Tax Increment Financing Eligible Improvements, Expected Reduction	$ 5,744,000
Estimated Cost of Tax Increment Financing Eligible Improvements, Maximum Principle	$ 17,592,881
Income Taxes Receivable, Noncurrent		13,801,141				13,801,141		13,294,337
State and Local Jurisdiction [Member]
Income Taxes Receivable, Noncurrent		13,801,000				13,801,000		13,294,000
Income Tax Receivable Principal		11,305,000				11,305,000		11,301,000
Income Tax Receivable Interest		2,496,000				2,496,000		1,993,000
Doran Canterbury I Joint Venture [Member]
Area of Land (Acre) \| a													13
Equity Method Investment, Ownership Percentage													27.40%
Income (Loss) from Equity Method Investments		(650,000)			(455,000)	636,000	(1,466,000)
Investee Losses in Excess of Equity Investment		2,550,000				2,550,000		$ 3,186,000
Doran Canterbury II [Member]
Area of Land (Acre) \| a										10
Equity Method Investment, Ownership Percentage										27.40%
Payments to Acquire Equity Method Investments		0			0	0	398,000
Doran Canterbury II [Member] \| Doran Canterbury II, LLC [Member]
Equity Method Investment, Ownership Percentage										72.60%
Canterbury DBSV [Member]
Area of Land (Acre) \| a												13
Equity Method Investment, Ownership Percentage											61.87%
Income (Loss) from Equity Method Investments		$ (24,000)			$ (45,000)	$ (76,000)	$ 194,000

Note 8 - Real Estate Development - Changes to Equity Method Investments (Details) - USD ($)	3 Months Ended				9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Equity Investment Balance	$ 6,789,772				$ 6,789,772		$ 6,863,517
Investee losses in excess of equity investment	2,550,187				2,550,187		3,185,923
Net Equity Investment Balance	4,239,585				4,239,585		$ 3,677,594
Equity investment income (loss), equity investment	(24,442)	$ (26,071)	$ (23,232)
Equity investment income (loss), investee losses in excess of equity investment	(649,899)	596,109	1,881,744
Equity investment income (loss), net equity investment	$ (674,341)	$ (622,180)	$ 1,858,512	$ (500,143)	$ 561,991	$ (1,274,058)

Note 9 - Leases (Details Textual) - USD ($)	9 Months Ended
Note 9 - Leases (Details Textual) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Operating Lease, Cost	$ 26,785	$ 22,855
Operating Lease, Expense	378,134	$ 411,354
Finance Lease, Right-of-Use Asset, Amortization	18,708
Finance Lease, Right-of-Use Asset, Accumulated Amortization	$ 118,044		$ 106,586

Note 9 - Leases and Commitments - Classification of Right of Use Assets (Details) - USD ($)

Sep. 30, 2023

Dec. 31, 2022

Operating

$ 53,026

$ 0

Total Leased Assets

62,780

18,973

Land, Buildings and Equipment, Net [Member]

Finance

^[1]

$ 9,754

$ 18,973

[1]	Finance lease assets are net of accumulated amortization of $120,631 and $106,586 as of June 30, 2023 and December 31, 2022, respectively.

Note 9 - Leases and Commitments - Lease Terms and Discount (Details)	Sep. 30, 2023	Dec. 31, 2022
Finance (Year)	5 years 2 months 12 days	8 months 12 days
Operating (Year)	9 months 18 days	0 years
Finance	8.50%	5.00%
Operating	8.00%	0.00%

Note 9 - Leases - Operating and Finance Lease (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
2023 remaining, operating lease	$ 0
2023 remaining, finance lease	585
2024, operating lease	26,785
2024, finance lease	2,339
2025, operating lease	28,230
2025, finance lease	2,339
2026, operating lease	0
2026, finance lease	2,339
2027 and beyond, operating lease	0
2027 and beyond, finance lease	4,485
Total minimum lease obligations, operating lease	55,015
Total minimum finance lease obligations	12,088
Less: amounts representing interest, operating lease	(1,989)
Less: amounts representing interest, finance lease	(2,334)
Present value of minimum lease payments, operating lease	53,026
Present value of minimum lease payments, finance lease	9,754
Less: current portion, operating lease	(25,352)	$ 0
Less: current portion, finance lease	(1,570)	(18,973)
Lease obligations, net of current portion, operating lease	27,674	0
Lease obligations, net of current portion, finance lease	$ 8,184	$ 0

Note 10 - Related Party Receivables (Details Textual) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Accounts Receivable, after Allowance for Credit Loss, Current	$ 1,619,887	$ 618,365
Doran Canterbury I and II Joint Ventures [Member]
Financing Receivable, after Allowance for Credit Loss	2,485,000	2,269,000
Interest Receivable	$ 451,000	275,000
Doran Canterbury I and II Joint Ventures [Member] \| Prime Rate [Member]
Financing Receivable, Interest Rate	2.00%
Related Party [Member]
Accounts Receivable, after Allowance for Credit Loss, Current	$ 2,000	$ 11,000

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