10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

OR

☐ 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:  001-31569

CANTERBURY PARK HOLDING CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Minnesota	41-1775532
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer 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 to Section 12(b) of the Act:

Common Stock, $.01 par value	The NASDAQ Stock Market LLC
Title of Each Class	Name of Exchange on which Registered

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ☐ NO ☒

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 ☒ NO ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). YES ☒ NO ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Rule 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ☐ NO ☒

The aggregate market value of the shares of voting and non-voting common equity held by non-affiliates based on the price at which the Company’s common stock was last sold on the NASDAQ Global Market, on June 30, 2014, the end of the registrant’s most recently completed second fiscal quarter was $24,073,872.

On March 15, 2015, the Company had 4,213,877 shares of common stock, $.01 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company’s definitive Proxy Statement for its 2014 Annual Meeting of Shareholders, to be held on June 4, 2015 and which will be filed on or before April 22, 2015, are incorporated by reference into Part III of this Form 10-K.

CANTERBURY PARK HOLDING CORPORATION

FORM 10-K ANNUAL REPORT

FOR THE YEAR ENDED DECEMBER 31, 2014

TABLE OF CONTENTS

		Page
	PART I
ITEM 1.	Business	3
ITEM 1A.	Risk Factors	12
ITEM 1B.	Unresolved Staff Comments	16
ITEM 2.	Properties	16
ITEM 3.	Legal Proceedings	17
ITEM 4.	Mine Safety Disclosures	17
	PART II
ITEM 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	17
ITEM 6.	Selected Financial Data	19
ITEM 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	20
ITEM 7A.	Quantitative and Qualitative Disclosures about Market Risk	29
ITEM 8.	Financial Statements and Supplementary Data	30
ITEM 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	52
ITEM 9A.	Controls and Procedures	52
ITEM 9B.	Other Information	53
	PART III
ITEM 10.	Directors, Executive Officers and Corporate Governance	53
ITEM 11.	Executive Compensation	53
ITEM 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	53
ITEM 13.	Certain Relationships, Related Transactions and Director Independence	53
ITEM 14.	Principal Accounting Fees and Services	54
	PART IV
ITEM 15.	Exhibits and Financial Statement Schedules	54
SIGNATURES		55
EXHIBIT INDEX		56
CERTIFICATIONS

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Item 1. BUSINESS

(a) General Development of the Business

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 Card Casino facility (the “Racetrack”) in Shakopee, Minnesota.  The Company’s pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack and year-round wagering on races held at out-of-state racetracks that are televised simultaneously at the Racetrack (“simulcasting”).  Unbanked card games, in which patrons compete against each other, are hosted in the Card Casino at the Racetrack.  The Company also derives revenues from related services and activities, such as concessions, parking, advertising signage, publication sales, special events, and from other entertainment events and activities held at the Racetrack.  The ownership and operation of the Racetrack and the Card Casino are significantly regulated by the Minnesota Racing Commission (“MRC”).

The Company was incorporated under the laws of Minnesota on March 24, 1994, acquired the Racetrack on March 29, 1994, commenced seven day a week simulcast operations on May 6, 1994, and, beginning in May 1995, launched live horse racing and related pari-mutuel wagering on a seasonal basis, generally from early May to early September.  The Card Casino opened on April 19, 2000, the Company is able to host card games up to 80 tables and currently host live play on approximately 65 tables on a daily basis.

In June 2012, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”) pursuant to which, over a 10.5 year term, the SMSC will provide supplements to purses for live races at the Racetrack, as well as payments to the Company for joint marketing efforts with the SMSC.  See “Cooperative Marketing Agreement” at (c)(viii) below for additional information.

The Company maintains a website at www.canterburypark.com.  Our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our periodic reports on Form 8-K (and any amendments to these reports) are available free of charge on our website.

(b) Financial Information About Segments

The Company divides its business into three segments: horse racing, Card Casino, and concessions.  The horse racing segment represents operations related to pari-mutuel wagering on simulcast and live horse races; the Card Casino segment represents our unbanked card operations; and the concessions segment represents food and beverage services provided at the facility, including special events held at the Racetrack.

(c) Narrative Description of Business

(i)           Horse Racing Operations

The Company’s horse racing operations consist of year-round pari-mutuel wagering on simulcast horse races (“simulcasting”) and on live thoroughbred and quarter horse races (“live meets”) held on a seasonal basis beginning in May and generally concluding in September of each year.

Live Racing

For the years ended December 31, 2014 and 2013 the Racetrack hosted 68 days and 69 days, respectively, of live racing beginning in mid-May and concluding in September.  Currently, Minnesota law requires the Company to schedule a minimum of 125 days of live racing annually, unless the Minnesota Horsemen’s Benevolent and Protective Association (the “MHBPA”) agrees to a lesser number of live racing days.  Since 1995, the MHBPA has agreed to waive the 125-day requirement and has allowed the Company to run a live meet of at least 50 days each year.  Pursuant to the CMA, the MHBPA entered into a Horse Association Agreement in which it agreed to waive the 125-day requirement provided that at least 65 days of live racing are scheduled in each of the ten calendar years beginning in 2013.  If, for any reason, the MHBPA ceases to be bound by its obligations under the Horse Association Agreement, and the Company and the MHBPA are unable to agree on a live meet shorter than 125 days, the Company’s operations could be adversely impacted by a decrease in the daily purses, potential reduction in the quality of horses, lower attendance, lower overall total amount wagered (“handle”), and substantially greater operating expenses.

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Simulcasting

Simulcasting is the process by which live horse races held at one facility (the “host track”) are transmitted simultaneously to other locations to allow patrons at each receiving location (the “guest track”) to place wagers on races transmitted from the host track.  Monies are collected at the guest track and the information with respect to the total amount wagered is electronically transmitted to the host track.  All of the amounts wagered at guest tracks are combined into the appropriate pools at the host track with the final odds and payouts based upon all the monies in the respective pools.

The Company offers simulcast racing from up to 20 racetracks per day, seven days a week, 363 days per year, including Churchill Downs, Santa Anita, Gulfstream Park, Belmont Park, and Saratoga Racecourse.  In addition, races of national interest, such as the Kentucky Derby, the Preakness Stakes, the Belmont Stakes, and the Breeders’ Cup supplement the regular simulcast program.  The Company regularly evaluates its agreements with other racetracks in order to offer the most popular simulcast signals of live horse racing that are feasible.

Under applicable provisions of federal and state law, in order to conduct simulcast operations either as a host or guest track, the Company must obtain the consent of the state’s regulatory authority and the organization which represents a majority of the owners and trainers of the horses who race at the Racetrack.  In Minnesota, such consent must be obtained from the MRC and the MHBPA.  As these consents are obtained annually, no assurance can be given that the MRC and the MHBPA will allow the Company to conduct simulcast operations either as a host or guest track after 2014.  If the MRC or the MHBPA do not consent, the Company’s operations could be adversely impacted by a decrease in pari-mutuel revenue, potential reduction in the quality of horses, lower attendance, lower overall handle, and substantially greater operating expenses.

(ii)          Card Casino Operations

The Card Casino is open 24 hours per day, seven days per week, and offers two forms of unbanked card games: poker and table games.

Poker games, including Texas Hold ‘Em, Stud, and Omaha, with betting limits per hand ranging between $2 and $100, are currently offered in the poker room.  A dealer, employed by the Company, regulates the play of the game at each table and deals the cards but does not participate in play.  In poker games, the Company is allowed to deduct a percentage from the accumulated wagers and impose other charges for hosting the activity but does not have an interest in the outcome of a game.  The Company may add additional prizes, awards or money to any game for promotional purposes.  The Company collects a “rake” of 5-10%, depending on the limit of the game, of each addition to the “pot” up to a maximum of $5 per hand as its collection revenue.  In addition, poker games offer progressive jackpots for most games.  In order to fund the jackpot pool, the dealer withholds $1 from each final pot in excess of the $15 minimum.

The Card Casino currently offers the following table games: Blackjack, Mississippi Stud, Fortune Pai Gow, Three Card Poker, Crazy 4 Poker, Ultimate Texas Hold ‘Em, EZ Baccarat, and Free Bet Blackjack.  The Company has the option to offer banked games under laws governing Card Casino operations but currently only offer “unbanked” games.  “Unbanked” refers to a wagering system or game where wagers lost or won in card games are accumulated into a player pool liability for purposes of enhancing the total amount paid back to winning players.  The Company can only serve as custodian of the player pool, may not have an active interest in any card game and does not recognize amounts that dealers “win” or “lose” during the course of play as revenue.  The primary source of Card Casino revenue is a percentage of the wagers received from the players, aggregated up to 18% per day as defined by MRC regulations, as compensation for providing the Card Casino facility and services, referred to as “collection revenue.”  In addition, several table games offer a progressive jackpot.  The player has the option of playing the jackpot and has the opportunity to win some or the entire jackpot amount, depending upon their hand.

(iii)         Special Events

The Company is the fourth largest event space in the Twin Cities with more than 100,000 square feet of available space. The Company’s facilities provide a variety of purposes for year-round events and other activities.  The Company’s event space has been used for craft shows, trade shows, pool and poker tournaments, automobile and other utility vehicle shows, major art shows, and fundraisers.  The Company’s outdoor spaces have been used for concerts, snowmobile races and other competitions. In addition to event space the Company rents space for boat storage during the winter months.

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 (iv)         Sources of Revenue

General

The Company’s revenues are principally derived from three activities: Card Casino operations, wagering on live and simulcast horse races, and concession sales.  For the year ended December 31, 2014, revenues from Card Casino operations represented 55.6% of total revenues, wagering on horse races generated 21.1% of total revenues, and concessions revenue represented 14.3% of total revenues.

Card Casino Operations

The Company receives revenue from its Card Casino, which operates 24 hours per day, seven days per week.  The Company currently receives collection revenue from poker and table games tables.  Under Minnesota law, the Company is required to pay 10% of the first $6 million of gross Card Casino revenues towards purses for live horse racing at the Racetrack.  After meeting the $6 million threshold, the Company must pay 14% of gross Card Casino revenues as purse monies.  Of funds allocated for purses, the Company pays 10% of the purse monies to the Minnesota Breeders’ Fund (the “MBF”), which is a fund apportioned by the MRC among various purposes related to Minnesota’s horse breeding and horse racing industries.  The remaining 90% of purse monies are divided between thoroughbred (90%) and quarter horse (10%) purse funds.

Pari-mutuel wagering – General

In pari-mutuel wagering, bettors wager against each other in a pool, rather than against the operator of the facility or with preset odds.  From the total handle wagered, the Minnesota Pari-Mutuel Horse Racing Act (the “Racing Act”) specifies the maximum percentage, referred to as the “takeout,” which may be withheld by the Racetrack, with the balance returned to the winning bettors.  The takeout constitutes one of the Racetrack’s primary sources of operating revenue.  From the takeout, funds are set aside for purses and paid to the State of Minnesota for pari-mutuel taxes and to the MBF.  The balance of the takeout remaining after these deductions is commonly referred to as the “retainage.”

The various forms of pari-mutuel wagering can be divided into two categories: straight wagering pools and multiple wagering pools, which are also referred to as “exotic” wagering pools.  Examples of straight wagers include: “win,” “place,” and “show.”  Examples of exotic wagers include: “daily double,” “exacta,” ”trifecta,” and “pick four.”

The amount of takeout earned by the Company depends on where the race is run and the form of wager (straight or exotic).  Net revenues from pari-mutuel wagering on live races run at the Racetrack consist of the total amount wagered, less the amounts paid (i) to winning patrons, (ii) for purses, (iii) to the MBF and (iv) for pari-mutuel taxes to the State of Minnesota.  Net revenues from pari-mutuel wagering on races being run at out-of-state racetracks and simulcast to the Racetrack have similar expenses but also include a host fee payment to the host track.  The host fee, which is calculated as a percentage of monies wagered (generally 3.0% to 4.5%), is negotiated with the host track and must comply with state laws governing the host track. Pari-mutuel revenues also include commission and breakage revenues on live on-track and simulcast racing, fees received from out-of-state racetracks for wagering on our live races and proceeds from unredeemed pari-mutuel tickets.

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Wagering on Live Races

The Racing Act establishes the maximum takeout that may be deducted from the handle.  The takeout percentage on live races depends on the type of wager.  The total maximum takeouts are 17% from straight wagering pools and 23% from exotic wagering pools.  From this takeout, Minnesota law requires deductions for purses, pari-mutuel taxes, and the MBF.

While the Racing Act provides that a minimum of 8.4% of the live racing handle is to be paid as purses to the owners of the horses, the size of the purse is subject to further agreement with the horsepersons’ associations.  In addition, the MBF receives 1% of the handle.  The pari-mutuel tax applicable to wagering on all simulcast and live races is 6% of takeout in excess of $12 million during the twelve-month period beginning July 1 and ending the following June 30.

The following table indicates  the percentage distribution of each dollar wagered on live races at the Racetrack, as established by the Racing Act, and the Racetrack’s retainage for the years ended December 31, 2014 and 2013

	Live Racing
	Straight			Exotic
Returned to Winning Patrons		83.00	%		77.00	%
Purse (1)	8.40			8.40
Minnesota Breeders’ Fund	1.00			1.00
Minnesota Pari-Mutuel Taxes (2)	—			—
Racetrack Retainage (1)	7.60			13.60
Total Takeout		17.00			23.00
Total Handle		100.00	%		100.00	%

(1) Minnesota law provides that the 8.40% purse payment is a minimum.  The actual percentage, if any, above the minimum is determined between the Racetrack and the MHBPA.  Any additional amounts paid for purses decrease the Racetrack’s retainage.

(2) The current pari-mutuel tax structure exempts the first $12 million of takeout during a statutorily mandated twelve-month period.  The total pari-mutuel tax liability for a twelve-month period will depend upon the total takeout during that period.  There was no pari-mutuel tax liability in 2014 or 2013 and therefore, it is not factored into the above table.

Wagering on Simulcast Races

The amount of takeout from simulcast wagering is determined by the laws of the state in which the host track is located.  In addition, the Racing Act establishes a minimum that must be set aside from simulcasting for purse payments on racing within Minnesota.  Different amounts are deducted for purses from the takeout depending on whether simulcasting occurs during the “Racing Season,” a statutorily defined 25-week period beginning in early May each year, or outside of the Racing Season.  If simulcasting occurs during the Racing Season, the amount set aside for purses further depends on whether the simulcasting is part of a full racing card that occurs during the part of the day that live races are conducted at the Racetrack.  For races that are part of a full simulcast racing card that takes place within the time of live races at the Racetrack, the amount reserved for purse payout is 8.4%.  For simulcasting conducted during the Racing Season that does not occur within the time period of live races, the purse is equal to 50% of the takeout remaining after deductions for pari-mutuel taxes, payments to the MBF, and payments to the host racetrack for host track fees.  For simulcasting conducted outside of the Racing Season, the amount that must be contributed to the purses is 25% of the takeout after deducting pari-mutuel taxes, payments to the MBF, and host fee payments to the host racetrack.

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The following table sets forth the approximate percentage distribution of each dollar wagered on races simulcast at the Racetrack and the Racetrack’s retainage for the years ended December 31, 2014 and 2013

	During Racing Season
	Concurrent with			Not Concurrent with			Outside of Racing
	Live Card			Live Card			Season
Returned to Winning Patrons (1)		80.50	%		80.50	%		80.50	%
Minnesota Breeders’ Fund	1.00			1.00			1.10
Minnesota Pari-Mutuel Taxes (2)	—			—			—
Purse (3)	8.40			7.35			4.15
Host Track Fees (4)	3.80			3.80			3.80
Racetrack Retainage (3)	6.30			7.35			10.45
Total Takeout		19.50			19.50			19.50
Total Handle		100.00	%		100.00	%		100.00	%

(1) This amount will depend upon the takeout at the host racetrack. This percentage is determined by local and state law applicable to the host track and ranges from 75.0% to 85.0%.

(2) The current pari-mutuel tax structure exempts the first $12 million of takeout during a statutorily mandated twelve-month period.  The total pari-mutuel tax liability for a twelve-month period will depend upon the total takeout during that period.  There was no pari-mutuel tax liability in 2014 2013 and therefore, it is not factored into the above table.

(3) Although Minnesota law specifies purse percentages, the actual percentage is determined by an agreement between the Racetrack and the MHBPA.

(4) Payments to the host track generally range from 3.0% to 7.25% of total handle, subject to negotiation with each host track.  For purposes of this table, the host track fee is assumed to be 3.8%.

Concessions Revenue

The Company earns revenue from food and beverage sales in its restaurant, group catering areas and numerous concession stands located throughout the facility.  Food and beverage sales are offered in the card room, during live and simulcast racing, and during special events.

Other Revenue

The Company generates cash revenues from the receipt of reserved seating charges, preferred and valet parking and the sales of various daily pari-mutuel publications.  Additional revenues are derived from special events and other space rentals. The Company also generates revenue from providing advertising signage space.

(v)          Competition

The Company faces direct competition from North Metro Harness Initiative, LLC (“NMHI”) that operates Running Aces Harness Park in Columbus Township, Anoka County, Minnesota, a racetrack and card room is located approximately 50 miles from Canterbury Park.  NHMI offers pari-mutuel wagering on live races of standardbred (“harness”) horses on a seasonal basis and year around wagering on simulcasting of all breeds of horse races.  In addition to pari-mutuel wagering, NHMI operates a card room directly competes with the Company’s Card Casino.   Due to its proximity and similar wagering and gaming offerings, NHMI’s direct and substantial competition could have a material adverse impact on the Company’s business, financial conditional and results of operations

The Company operates in a highly competitive wagering and gaming industry with a large number of participants. The Company competes with competitive casino activities that include tribal casinos, state-sponsored lotteries and other forms of legalized gaming in the U.S. and other jurisdictions.  A number of tribal casinos in the State of Minnesota offer video slot machines, table games and unbanked card games. Including Minnesota’s largest casino, Mystic Lake which is located approximately four miles from the Racetrack.

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Additionally, Internet-based interactive gaming and wagering is growing rapidly and adversely affects all forms of wagering offered by the Company. The Company anticipates competition in this area will become more intense as new Internet-based ventures enter the industry and as state and federal regulations on Internet-based activities are clarified.

The Company faces indirect competition from a variety of sources for discretionary consumer spending including spectator sports and other entertainment and gaming options. In the Minneapolis-Saint Paul metropolitan area, competition includes a wide range of live and televised professional and collegiate sporting events.  In addition, live horse racing competes with a wide variety of summer attractions, including amusements parks, sporting events, and other local activities.

Finally, the Company competes with racetracks located throughout the United States in securing horses to run at the Racetrack.  Attracting owners and trainers is largely dependent on the ability to offer competitive purses.  The Company experiences significant competition for horses from racetracks located near Des Moines, Iowa and Chicago, Illinois.  This competition is expected to continue for the foreseeable future.

(vi)  Regulation

General

The ownership and operation of the Racetrack in Minnesota is subject to significant regulation by the MRC under the Racing Act and the rules adopted by the MRC.  The Racing Act governs the allocation of each wagering pool to winning bettors, the Racetrack, purses, pari-mutuel taxes, and the MBF, and empowers the MRC to license and regulate substantially all aspects of horse racing in the State.  The MRC, among other things, grants operating licenses to racetracks after an application process and public hearings, licenses all racetrack employees, jockeys, trainers, veterinarians, and other participants, regulates the transfer of ownership interests in licenses, allocates live race days and simulcast-only race days, approves race programs, regulates the conduct of races, sets specifications for the racing ovals, animal facilities, employee quarters and public areas of racetracks, regulates the types of wagers on horse races, and approves significant contractual arrangements with racetracks, including management agreements, simulcast arrangements, and totalizator contracts.

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

Issuance of Class A and Class B Licenses to the Company

The Company holds a Class A License, issued by the MRC, which allows the Company to own and operate the Racetrack.  The Class A License is effective until revoked, suspended by the MRC or relinquished by the licensee.  Currently, the fee for a Class A License is $253,000 per fiscal year.

The Company also holds a Class B License, issued by the MRC, that allows the Company to sponsor and manage horse racing on which pari-mutuel wagering is conducted at its Class A licensed racetrack and on other horse races run at out-of-state locations as authorized by the MRC.  The Class B License is renewable each year by the MRC after a public hearing (if required by the MRC).  Currently, the fee for the Class B License is $500 for each assigned race day on which live racing is actually conducted and $100 for each day on which simulcasting is authorized and actually takes place.

Limitation on the Number of Class A and Class B Licenses

Pursuant to the Racing Act, so long as the Racetrack maintains its Class A License, no other Class A License may be issued to operate a racetrack in the seven-county metropolitan area (the counties of Hennepin, Ramsey, Washington, Scott, Dakota, Anoka, and Carver), except the MRC may issue an additional Class A License within the seven-county metropolitan area, provided that the additional license may only be issued for a facility which, among other conditions, is located more than 20 miles from the Racetrack, contains a track no larger than five-eighths of a mile in circumference, and is used exclusively for standardbred (harness) racing.  An additional Class A license was issued to NMHI on January 20, 2005 (see “Competition” above).  However, as long as the Company holds its Class A License, only the Company may own and operate a racetrack in the seven county metropolitan area where thoroughbred and quarter horses may be raced.

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Limitation on Ownership and Management of an Entity which holds a Class A and/or Class B License

The Racing Act requires prior MRC approval of all officers, directors, 5% shareholders or other persons having a present or future direct or indirect financial or management interest in any person applying for a Class A or Class B license, and if a change of ownership of more than 5% of the licensee’s shares is made after an application is filed or the license issued, the applicant or licensee must notify the MRC of the changes within five days of this occurrence and provide the information required by the Racing Act.

Card Casino Regulation

The MRC is also authorized by law to regulate Card Casino operations, and the law requires that the Company reimburse the MRC for its actual costs, including personnel costs, of regulating the Card Casino.  For fiscal years ended December 31, 2014 and 2013, the Company paid $168,000 and $153,000, respectively, to the MRC as reimbursement for costs of regulating Card Casino operations.

The MRC issued an additional Class B License to the Company on January 19, 2000 that authorizes the Company to host unbanked card games.  The Class B License is renewable each year by the MRC after a public hearing (if required by the MRC).  Currently, the Class B License fee of $10,000 per calendar year is included in the Class A License fee of $253,000 per calendar year.

Local Regulation

The Company’s operations are subject to state and local laws, regulations, ordinances, and other provisions affecting zoning, public health, and other matters which may have the effect of restricting the uses to which the Company’s land and other assets may be used.  Also, any development of the Racetrack site is, among other things, subject to applicable zoning ordinances and requires approval by the City of Shakopee and other authorities, and there can be no assurance such approvals would be obtained if any development was undertaken.

(vii)  Recent Legislation

Legislation signed by Minnesota’s Governor on April 15, 2014 increased the minimum wage that must be paid by the Company from $7.25 to $8.00 effective August 1, 2014, with further increases scheduled to $9.00 per hour on August 1, 2015 and to $9.50 per hour on August 1, 2016.  In addition, starting January 1, 2018, the minimum wage will increase at the beginning of each year by the rate of inflation up to a maximum increase of up to 2.5% per year.  The legislation includes a 90-day training wage of $7.75 for 18- and 19-year-olds and, under certain conditions, for 16- and 17- year olds.  The Company employs a large number of individuals who received an hourly wage equal to or slightly above $7.25 per hour, prior to August 1, 2014, this legislation had an adverse effect in 2014 and will continue to have an adverse effect in 2015 and beyond.  While we may be able to mitigate the impact of this increase by raising our prices or reducing our employee count, these measures could themselves have an adverse effect because higher prices and diminished service levels may discourage visits to the Racetrack.  Also, to the extent we are not able to implement such price increases and cost cutting measures, the increase in the minimum wage will adversely affect our net income.

(viii)  Cooperative Marketing Agreement

On June 4, 2012, the Company entered into the CMA with the SMSC.  The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry.  Under the CMA, this is achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA.  Such payments have no direct impact on the Company’s consolidated financial statements or operations.

Under the terms of the CMA, the SMSC paid the horsemen $5.8 million and $5.3 million for purse enhancements for the years ended December 31, 2014 and 2013, respectively.

Under the CMA, 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.  Under the CMA, the SMSC paid the Company $660,000 and $600,000 for marketing purposes for the years ended December 31, 2014 and 2013, respectively.

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Effective January 2015, the CMA was amended to adjust the payment amounts between the “Purse Enhancement Payments to Horsemen” and “Marketing Payments to Canterbury Park.”  Under the CMA as amended, SMSC agreed to make the following purse enhancement and marketing payments for 2015 through 2022:     

Year	Purse Enhancement Payments to 1 Horsemen		Marketing Payments to Canterbury Park
2015	$	6,316,200	$	943,800
2016		6,947,820		1,038,180
2017		7,642,602		1,141,998
2018		7,830,000		1,170,000
2019		7,830,000		1,170,000
2020		7,830,000		1,170,000
2021		7,830,000		1,170,000
2022		7,830,000		1,170,000

1 - Includes $100,000 each year to various horsemen associations

The amounts earned from the marketing payments are recorded as a component of other revenue and the related expenses are recorded as a component of advertising and marketing expense and depreciation in the Company’s consolidated statements of operations.  For the year ended December 31, 2014, the Company recorded $824,842 in other revenue and incurred $608,309 in advertising and marketing expense and $216,533 in depreciation related to the SMSC marketing payment.  For the year ended December 31, 2013, the Company recorded $595,628 in other revenue and incurred $490,072 in advertising and marketing expense and $105,556 in depreciation related to the SMSC marketing payment.  The excess of amounts received over revenue is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheets.

Under the CMA, the Company agreed 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.

As part of the CMA and pursuant to a related SAR Agreement dated June 14, 2012, the Company issued stock appreciation rights to the SMSC.  The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014, 49,500 rights had vested.   The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  The SAR Agreement and all rights granted expire on December 31, 2022.  The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the CMA.  Any excess expenses will be recognized as a component of other operating expenses. For the year ended December 31, 2014, the Company recognized $32,354 of expense related to these stock appreciation rights, of which $32,354 was recorded as an offset to other revenue.   For the year ended December 31, 2013, the Company recognized $227,592 of expense related to these stock appreciation rights, of which $227,592 was recorded as an offset to other revenue.  In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to other revenue and/or other operating expenses related to these changes.

(x)  Marketing

The Company’s primary market is the seven-county Minneapolis-Saint Paul metropolitan area plus the two counties to the south of the Racetrack and Card Casino.  The City of Shakopee, located in the southwestern portion of the metropolitan area, is one of the fastest growing communities in the region, and Scott County is one of the fastest growing counties in the country.

To support its pari-mutuel horse racing, Card Casino business, and special events and catering, the Company conducts year-round marketing efforts to maintain the loyalty of existing customers and attract new players to the property.  The Company utilizes radio, television, digital advertising, social media, print advertising and direct marketing to communicate to its audiences.  In addition to its regular advertising and communication program, the Company conducts numerous special promotions, handicapping contests and poker tournaments to attract incremental visits.   The Company also utilizes a robust player rewards and database marketing program to enhance the loyalty of its guests.

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                The Company continues to focus on creating a premier guest experience as the core element of its marketing efforts.  This includes on delivering great customer service, developing new food and beverage offerings, creating fan education programs, and providing entertainment opportunities that go beyond the traditional pari-mutuel wagering and card playing activities.

(xi)  Possible Real Estate Development

The Company has entered into a Letter of Intent with Kraus-Anderson, Inc. regarding the possible development of a mixed-use destination lifestyle center on unused and underutilized land adjacent to the Racetrack.  As envisioned by the parties this complex would provide year round synergies to the Company’s Racetrack and Card Casino, as well as nearby entertainment venues, while serving the needs of the community and region.  The components of the project could include destination and local retail shops, restaurants, entertainment, sports venues, multi-family housing, and other compatible uses.

Extensive due diligence regarding the feasibility of this project was recently completed and the parties have begun negotiating the terms of a formal Development Agreement that would guide financing and construction of the proposed project.  The process of negotiating the formal agreement is expected to take three months or more to complete.

(xii)  Employees

At March 15, 2015, the Company had 273 full-time employees and 517 part-time employees.  On a seasonal basis, the Company adds approximately 400 employees for live racing operations from early May until early September.  The Company’s management believes its employee relations are good.

(xiii)  Executive Officers

The executive officers of the Company, their ages and their positions with the Company are as follows:

Name	Age	Position with Company
Randall D. Sampson	56	President, CEO and General Manager
David C. Hansen	58	Vice President of Finance, CFO and Secretary
Eric A. Halstrom	46	Vice President of Racing Operations
Michael J. Garin	59	Vice President of Non-Gaming Operations and Asst. Secretary
Michael Hochman	49	Vice President of Card Casino Operations
Mark Erickson	58	Vice President of Facilities
Mary Fleming	49	Vice President of Human Resources

Randall D. Sampson has been President and Chief Executive Officer since the formation of the Company in March 1994 and General Manager since September 1995.  He has been active in horse industry associations, currently serving as Vice President and Director of the Thoroughbred Racetracks of America and is a past President of the Minnesota Thoroughbred Association.  Mr. Sampson also currently serves as a director of Communications Systems, Inc. (NASDAQ:JCS), a manufacturer of telecommunications and data communications products based in Minnetonka, Minnesota.  Mr. Sampson is the son of Curtis A. Sampson, who is the Company’s non-executive Chairman of the Board and the beneficial owner of approximately 21% of the Company’s common stock.

David C. Hansen joined the Company in July 2001 as Vice President of Finance and Chief Financial Officer.  From 2000 to 2001, Mr. Hansen served as Director of Accounting for Prairie Meadows Racetrack and Casino in Altoona, IA, one of the nation’s first Racino operations.  He served as Controller and later Director of Finance at Treasure Island Resort & Casino, in Red Wing, MN, from 1993 until 2000.  Mr. Hansen is a member of the Minnesota Society of Certified Public Accountants, the Hospitality Financial and Technology Professionals Association, and Financial Executives International.

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Eric A. Halstrom joined the Company in October 2013 as Vice President of Racing Operations.  From 2008 to 2013 Mr. Halstrom served as Vice President and General Manager of Racing for Fair Grounds Race Course and Slots, owned by Churchill Downs Incorporated.  Prior to his employment with Fair Grounds, Mr. Halstrom served in various capacities at Canterbury Park, including Vice President of Racing from 2005 to 2008.  He is a graduate of the University of Arizona’s racetrack industry program.

Michael Hochman joined the Company in March 2000 as a Pit Manager.   Later he was promoted to Director of Table Games, Senior Director of Card Casino and in 2014 he was promoted to Vice President of card Casino operations.  From 1996-2000 Mr. Hochman was the poker room manager at the Clearwater Casino in Suquamish Washington. Prior to 1996 he worked in Las Vegas as a dealer and floor person for the Sahara and Luxor properties. Currently, he serves on the Board of Directors for the Northstar Problem Gambling Alliance.

Michael J. Garin was named Vice President of Non-Gaming Operations in October 2009.  Prior thereto, Mr. Garin served as the Vice President of Hospitality since May 1997.  He also previously served as President of Canterbury Park Concessions, Inc. from September 1995 to May 1997.  From 1993 to 1994, Mr. Garin served as Food & Beverage Supervisor for Little Six, Inc., one of the largest tribal casino operations in the country.  Mr. Garin was President of MMR Vending, Inc., a regional vending company, from 1988 to 1992.  Prior to 1988, he was a Regional Director at General Mills Restaurant Group overseeing seven restaurants in three states.  Since 2007, Mr. Garin has served on the Board of Directors for the Minnesota Restaurant Association.

Mark A. Erickson has been Vice President of Facilities since May 1997, serving as the Racetrack’s Director of Facilities since April 1994.  From 1992 to 1994, Mr. Erickson served as Maintenance Supervisor for the Mall of America, supervising the interior and exterior maintenance for one of the largest shopping malls in North America.  Mr. Erickson was Master Electrician for Canterbury Downs from 1986 to 1992, supervising the installation and maintenance of all electrical equipment.

Mary Fleming joined the Company in July 1994 as Human Resources Manager. Later she was promoted to Senior Director of Human Resources and in 2014 she was promoted to Vice President of Human Resources.  From 1991-1994 Ms. Fleming worked in the Staffing industry for ProStaff Personnel Services. She holds a bachelor’s degree from the University of Minnesota, is a member of the Society for Human Resources Management and is a certified Professional in Human Resources (PHR). Ms. Fleming currently serves on the Board of Directors for the Shakopee Chamber of Commerce.

Item 1A. RISK FACTORS

In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and to the Company could materially impact our future performance and results.  Such risk factors include, but are not limited to, the matters discussed below as well as the additional risks discussed under “Forward-Looking Statements” on page 29 of this Form 10-K.

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

We face intense competition in our market, particularly competition from NMHI which offers unbanked card games similar to those offered by the Company.  We also compete with Native American owned casinos.  Such facilities have the advantage of being exempt from certain state and federal taxes and state regulation of indoor smoking, as well as the ability to offer a wider variety of gaming products.  Additionally, we compete with illegal Internet wagering on horse races, other forms of gambling, spectator sports, other forms of entertainment, and other racetracks throughout the country as previously discussed under “Competition” above.

We expect competition for our existing and future operations to increase from NMHI, existing tribal casinos, and racetracks that are able to subsidize their purses with alternative gaming revenues.  In addition, several of our tribal gaming competitors have substantially larger marketing and financial resources than we do.  We are unable to predict with any certainty the effects of existing and future competition on our operating results.

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Our business is highly sensitive to general economic trends.

Economic conditions improved during 2013 and 2014 from a previous period of adverse conditions in local, regional, national and global markets, however there remains risk that a downturn may resume.  Additionally, our ability to respond to periods of economic contraction may be limited, as certain of our costs remain fixed or even increase, when revenues decline. Accordingly, any persistence of poor economic conditions, or further deterioration, could have a material, adverse impact on our business, financial condition and results of operations.

Our business is highly sensitive to consumer confidence and reductions in consumers’ discretionary spending, which may result from economic conditions, unemployment levels and other changes we cannot accurately predict.

Demand for entertainment and leisure activities is sensitive to consumers’ disposable incomes, which have been adversely affected by recent economic conditions.  Further declines in the residential real estate market, changes in consumer confidence, increases in individual tax rates, and other factors that we cannot accurately predict may reduce the disposable income of our customers.  This could result in fewer patrons visiting our racetrack and wagering facilities, and may impact our customers’ ability to wager with the same frequency and maintain their wagering level profiles.  Accordingly, any significant loss of customers or decline in wagering could have a material adverse impact on our business, financial condition and results of operations.

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

The ownership and operation of our Racetrack and Card Casino are subject to significant regulation by the MRC under the Racing Act and the rules adopted by the MRC.  The MRC has the authority to impose increases in the Class A and Class B license fees.  In addition, State law requires that we reimburse the MRC for its actual costs of regulating the Card Casino, including personnel costs.  Increases in these licensing and regulatory costs could adversely affect our results of operations.

Decisions by the MRC in regard to any one or more of the following matters could also adversely affect the Company’s operations: the granting of operating licenses to Canterbury Park and other racetracks after an application process and public hearings; the licensing of all track employees, jockeys, trainers, veterinarians, and other participants; regulating the transfer of ownership interests in licenses; allocating live race days and simulcast-only race days; approving race programs; regulating the conduct of races; setting specifications for the racing ovals, animal facilities, employee quarters, and public areas of racetracks; changes to the types of wagers on horse races; and approval of significant contractual agreements.

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.

Our operations and oversight by the MRC are ultimately subject to the laws of Minnesota and there exists the risk that these laws may be amended in ways adverse to our operations.  In particular, we are required to pay taxes and fees in addition to normal federal, state, and local income taxes, and such taxes and fees are subject to increase at any time.  From time to time, state and local legislators and officials have proposed changes in tax laws, or in the administration of laws affecting our industry, such as the allocation of each wagering pool to winning bettors, the Racetrack, purses, and the MBF.  In addition, poor economic conditions could intensify the efforts of state and local governments to raise revenues through increases in gaming taxes.  It is not possible to predict with certainty the likelihood of changes in tax laws or in the administration of such laws.  Such changes, if adopted, could have a material adverse effect on our operations.

We are also subject to federal and Minnesota laws that affect businesses generally.  Some of these laws, such as laws pertaining to immigration, have severe penalties for law violations.  In addition, it is possible, as a result of the legislative process, that legislation directly or indirectly adverse to the Company may be enacted into law.

We depend on key personnel.

Our continued success and our ability to maintain our competitive position is largely dependent upon, among other things, the skills and efforts of our senior executives and management team including Randall D. Sampson, our Chief Executive Officer.  We have no employment agreements with our senior executives and key personnel, and we cannot guarantee that these individuals will remain with us, and their retention is affected by the competitiveness of our terms of employment and our ability to compete effectively against other gaming companies.  Our inability to retain key personnel could have a material adverse impact on our business, financial condition, and results of operations.

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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.

We receive, store and process personal information and other customer data.  There are numerous federal, state and local laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other data.  Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other player data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our customers to lose trust in us, which could have an adverse effect on our business.  Additionally, if third parties we work with, such as vendors, violate applicable laws or our policies, such violations may also put our customers’ information at risk and could in turn have an adverse effect on our business.  The Company is also subject to payment card association rules and obligations under its contracts with payment card processors.  Under these rules and obligations, if information is compromised, the Company could be liable to payment card issuers for the associated expense and penalties.  In addition, if the Company fails to follow payment card industry security standards, even if no customer information is compromised, the Company could incur significant fines or experience a significant increase in payment card transaction costs.

Energy and fuel price increases may adversely affect our costs of operations and our revenues.

Our facility uses significant amounts of electricity, natural gas, and other forms of energy.  Increases in the cost of electricity or natural gas negatively affect our results of operations.  In addition, energy and fuel price increases could negatively impact our operations by reducing disposable income of potential customers and decreasing visitation to our facility.

Our CMA with the SMSC may be terminated by the SMSC prior to December 31, 2022 under certain circumstances.

The CMA grants to the SMSC the right to terminate the CMA without cause if the SMSC determines, in its sole discretion that a change of circumstance adverse to its interests with respect to gaming in the State of Minnesota has occurred.  If the SMSC exercises this right, the Company would be entitled to substantial wind down payments approximately equal to 2.5 times payments due under the CMA in the three years following the year it gives such notice of termination.  While such wind down payments would cushion the impact of the SMSC’s exercise of this right to terminate the CMA, a termination of the CMA prior to the expiration of its term in 2022 could have a material adverse effect on the Company.

Nationally the popularity of horse racing is declining.

There has been a general decline in the number of people attending and wagering on live horse races at North American racetracks due to a number of factors, including increased competition from other wagering and entertainment alternatives as discussed above.  According to industry sources, pari-mutuel handle declined 28.6% from 2006 to 2014 including a 2.8% decrease in 2014 compared to 2013. Declining interest in horse racing has had a negative impact on revenues and profitability in our racing business.  Our business plan anticipates increased attendance and pari-mutuel wagering during our 2015 live meet and in future live meets because of purse enhancement payments and marketing payments we receive under the CMA.  However, we recognize that a generalized decline in interest in horse racing and pari-mutuel wagering could have a material adverse impact on our business, financial condition and results of operations in future years.

We may not be able to attract a sufficient number of horses and trainers to achieve full field horse races.

We believe that patrons prefer to wager on races with a large number of horses, commonly referred to as full fields.  A failure to offer races with full fields results in less wagering on our horse races.  Our ability to attract full fields depends on several factors.  It depends on our ability to offer and fund competitive purses and it also depends on the overall horse population available for racing.  Various factors have led to declines in the horse population in certain areas of the country, including competition from racetracks in other areas, increased costs and changing economic returns for owners and breeders, and the spread of various debilitating and contagious equine diseases.  If our racetrack is faced with a sustained outbreak of a contagious equine disease, it would have a material impact on our profitability.  Finally, if we are unable to attract horse owners to stable and race their horses at our racetrack by offering a competitive environment, including improved facilities, a well-maintained racetrack, better conditions for backstretch personnel involved in the care and training of horses stabled at our racetrack and a competitive purse structure, our profitability could also decrease.  We also face increased competition for horses and trainers from racetracks that are licensed to operate slot machines and other electronic gaming machines that provide these racetracks an advantage in generating new additional revenues for race purses and capital improvements.  While our ability to offer full fields to patrons during our live meets has been substantially strengthened by the purse enhancement payments that will be made under the CMA through 2022, our inability to attract full fields, for whatever reason, could have a material adverse impact on our business, financial condition and results of operations.

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

        Since horse racing is conducted outdoors, unfavorable weather conditions, including extremely high and low temperatures, high winds, storms, tornadoes and hurricanes, could cause events to be canceled and/or attendance to be lower, resulting in reduced wagering.  Our operations are subject to reduced patronage, disruptions or complete cessation of operations due to weather conditions, natural disasters and other casualties.  If a business interruption were to occur due to inclement weather and continue for a significant length of time at our racetrack, it could have a material adverse impact on our business, financial condition and results of operations.

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

Although we carry jockey accident insurance at our racetrack to cover personal jockey injuries which may occur during races or daily workouts, there are certain exclusions to our insurance coverage, and we are still subject to litigation from injured participants.  We renew our insurance policies on an annual basis.  The cost of coverage may become so high that we may need to further reduce our policy limits or agree to certain exclusions from our coverage.  Our results may be affected by the outcome of litigation, as this litigation could be costly and time consuming and could divert our management and key personnel from our business operations.

Our business depends on utilizing totalizator services.

Our customers utilize information provided by a third party vendor that accumulates wagers, records sales, calculates payoffs and displays wagering data in a secure manner to patrons who wager on our horse races.  The failure to keep technology current could limit our ability to serve patrons effectively or develop new forms of wagering and/or affect the security of the wagering process, thus affecting patron confidence in our product.  A perceived lack of integrity in the wagering systems could result in a decline in bettor confidence and could lead to a decline in the amount wagered on horse racing.  In addition, a totalizator system failure could cause a considerable loss of revenue if betting machines are unavailable for a significant period of time or during an event with high betting volume.

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

The Company employs a large number of individuals at an hourly wage equal to or slightly above the current federal mandated wage of $8.00 per hour.  See “Recent Legislation” at (c)(vii) for additional information regarding current minimum legislation.  Most of these employees are either high school or college students employed on a seasonal basis or tipped employees, many of whom receive, on average, tip income that is several times the current minimum wage.  From time to time legislation is introduced in the U.S. Congress or the Minnesota legislature that would substantially increase the minimum wage.  An immediate and substantial increase in the current minimum wage applicable to the Company would materially increase the Company’s operating expenses and could adversely affect the Company’s operations and financial results.  While we might be able to mitigate the impact of a substantial increase by raising our prices or reducing our employee count, these measures could themselves have an adverse effect because higher prices and diminished service levels may discourage visits to the Racetrack.  Furthermore, to the extent we are not able to implement such cost cutting measures, the increase in the minimum wage could materially adversely affect our net income.  

Uncertainty regarding the success of a possible real estate development project

While the Company has entered into a Letter of Intent with Kraus-Anderson, Inc. regarding the possible development of a mixed use destination lifestyle center on unused and underutilized land adjacent to the Racetrack and the parties are now negotiating the terms of a formal Development Agreement. Such negotiations may not result in the parties agreeing on terms for financing and construction of the proposed project. Also, even if the parties enter into a Development Agreement, there can be no assurance that the proposed mixed use complex or any other real estate project will be financed and constructed, or that, if constructed, it will operate successfully.

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Item 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

Item 2. PROPERTIES

General

The Company’s facilities, which are owned and operated under the name “Canterbury Park,” are a modern complex of buildings and grounds which generally compare favorably to other major racetracks located throughout the country.  The Racetrack’s grandstand has a patron capacity of approximately 10,000 within enclosed areas and a maximum patron capacity of over 30,000 including outside areas around the grandstand.  The grandstand and most public outdoor areas contain numerous pari-mutuel windows, odds information boards, video monitors, concessions stands and other amenities.  The audio/visual system includes over 850 television monitors with most areas providing multi-screen viewing of the races.

The Racetrack is located approximately 25 miles southwest of downtown Minneapolis.  The area immediately surrounding the Racetrack consists of retail, commercial and industrial buildings, farmland and residential areas.  The Racetrack is in reasonable proximity to a number of major entertainment destinations including:  Valleyfair, an amusement park about two miles from the Racetrack which annually attracts visitors during the spring and summer; the Renaissance Festival, a seven-weekend late summer annual event located about five miles from the Racetrack; and Mystic Lake Casino, located about four miles from the Racetrack, which draws thousands of visitors daily.  The Mall of America, the largest enclosed shopping mall in the United States, which attracts more than 40 million visitors per year, is approximately 17 miles from the Racetrack.

Racing Surfaces

The racing surfaces consist of a one-mile oval dirt/limestone track and a 7/8-mile oval turf course.  The dirt track includes a one and one-quarter mile front stretch chute, a 6-1/2 furlong backstretch chute, and a 3-1/2 furlong chute and is lighted for night racing.

Grandstand

The grandstand is a modern, air-conditioned enclosed structure of approximately 275,000 square feet with a variety of facilities on six levels.  The lower level contains space for support functions such as jockey quarters, administrative offices, Racing Commission offices, first aid, mechanical rooms, and electrical rooms.  The track level includes pari-mutuel windows, restrooms, a variety of concession stands and other services as well as the Card Casino, which occupies 22,000 square feet on the track level.  The mezzanine level contains 1,320 fixed seats in a glass-enclosed, air-conditioned area and an additional 3,000 seats located outside.  In addition to the seats, the mezzanine level contains pari-mutuel windows, restrooms, concession stands, and other guest facilities.  A portion of the mezzanine level is currently being used as a simulcast center during live racing, and for banquets and other events during the off-season.  The kitchen level is an intermediate level located between the mezzanine and clubhouse floors.  It contains a full-service kitchen which supports a full dining menu for the track-side dining terraces on the clubhouse level and food preparation for the other concession areas.  The clubhouse level is a multi-purpose area serving as a simulcast center during wagering sessions on televised races, as well as a full-service dining area during the live racing season.  The clubhouse level includes 325 trackside tables, each equipped with a television set, with a total seating capacity of 1,200 patrons and an additional 1,000 seats are located in lounges located throughout the area.  The press box and officials’ level is located in the roof trusses over the clubhouse and contains work areas for the press, racing officials, closed-circuit television, photo finish, and the track announcer.  In addition, the grandstand was structurally built to accommodate skyboxes under the press box/officials’ level, although none have yet been constructed.  Escalators and elevators are available to move patrons among the various levels within the grandstand.

Expo Center

During 2014, the Company completed the construction of a 30,000 square foot structure designed for year-round special events, trade shows and exhibits.  The Expo Center opened on September 11, 2014, together with other areas, Canterbury Park now offers the fourth largest event space in the Twin Cities with more than 100,000 total square feet of available space. The facility features 24,000 square feet of open event space and another 6,000 square feet including an entry area, offices, restrooms and storage.

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Barn and Backside Facilities

The stable area consists of 33 barns with a total of approximately 1,650 stalls.  In the stable area, there are 240 dormitory rooms for the grooms and others working at the Racetrack.  The stable area also contains a combination racing office and cafeteria/recreation building for stable personnel, two blacksmith buildings, and a one and 5/8 mile training track.

Parking

Approximately 7,500 paved parking spaces are available for patron and employee vehicles at the Racetrack, including parking spaces that are reserved for handicapped patrons.  The Racetrack also has unpaved areas available for overflow parking for approximately 5,000 additional automobiles.

Undeveloped Land

Approximately 200 acres of the 392 acres owned by the Company could be developed or sold, in whole or in part, depending upon future opportunities.  The Company regularly evaluates other business activities and development opportunities that would maximize the use of the real estate surrounding the Racetrack and which would complement the Company’s primary businesses of horse racing and Card Casino operations.

Item 3.  LEGAL PROCEEDINGS

 There are no material legal proceedings pending against the Company.  From time to time, the Company is party to ordinary and routine litigation incidental to our business.  We do not expect the outcome of any such litigation pending at this time to have a material adverse effect on our consolidated financial position or results of operations.

Item 4. MINE SAFETY DISCLOSURES

Not Applicable.

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a)            MARKET INFORMATION

The Company’s common stock trades on the NASDAQ Global Market under the symbol CPHC.  The table set forth below indicates the high and low sale prices for the Common Stock in the quarterly periods ending December 31, 2014 and 2013

	2014						2013
Common Stock	High			Low			High			Low
First Quarter		$	11.92		$	9.65		$	11.45		$	8.68
Second Quarter			12.04			9.76			12.00			9.53
Third Quarter			11.90			9.01			11.74			9.36
Fourth Quarter			10.61			8.91			11.99			10.00

(b)           HOLDERS

At March 15, 2015, the Company had 802shareholders of record of its common stock.  Since many holders’ shares are listed under their brokerage firms’ names, the actual number of shareholders is estimated by the Company to be over 2,000.

(c)           DIVIDENDS

The Company has not adopted any plan or policy with regard to paying dividends.  Future dividend action by its Board of Directors, if any, will be based on the Company’s earnings, projected future earnings, and cash requirements when such dividend action is next considered.

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(d)          SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table sets forth information as of December 31, 2014 regarding our equity compensation plans:

Securities Authorized for Issuance Under Equity Compensation Plans

	(a)			(c)
Plan Category (1)	Number of shares of common stock to be issued upon exercise of outstanding options, warrants and rights	(b) Weighted-average  exercise price of outstanding options, warrants and rights		Number of shares of common stock remaining available for future issuance under equity compensation plans (excluding shares in column (a))
Equity compensation plans approved by security holders:
1994 Stock Plan	250,252	$	9.64	159,100
1995 Employee Stock Purchase Plan	—		—	81,669
Equity compensation plans not approved by security holders:
Stock Option Plan for Non-Employee Consultants and Advisors (2)	5,000		9.15	162,500
Total	255,252			403,269

(1) The Company does not have individual compensation arrangements involving the granting of options, warrants, rights or restricted stock.

(2) Adopted by the Company’s Board of Directors in 1997, the purpose of the Stock Option Plan for Non-Employee Consultants and Advisors is to attract and retain the services of experienced and knowledgeable non-employee consultants and advisors to assist in projects having strategic significance for the Company, to provide an alternative form of cash compensation to such persons and to provide such persons with the opportunity to participate in the Company’s long term progress and success.

(e)         REGULATION S-K, ITEM 201(e) INFORMATION

Not Applicable.

(f)           RECENT SALE OF UNREGISTERED SECURITIES

Not Applicable.

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(g)          PURCHASES OF EQUITY SECURITIES BY THE ISSUER

On December 17, 2007, the Company’s Board of Directors adopted a plan that authorized the repurchase of up to 250,000 shares of the Company’s common stock pursuant to Exchange Act Rule 12b-18 in open market transactions or block purchases of privately negotiated transactions (the “2008 Stock Repurchase Plan”).  From its adoption until August 13, 2012, the Company repurchased 216,543 shares under the 2008 Stock Repurchase Plan and, on such date, authorized the repurchase of an additional 100,000 shares of the Company’s common stock.  The following table presents shares repurchased for the years ended December 31, 2014 and 2013:

Year ending December 31,	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plan	Remaining Shares available under plan
2013	809	$	9.28	809	128,781
2014	—	$	—	—	128,781
Total	809			809

Item 6. SELECTED FINANCIAL DATA

The following table sets forth selected consolidated financial data for each of the five fiscal years ended December 31, 2014.  The operating and balance sheet data for the years ended and as of December 31, 2014, 2013, 2012, 2011 and 2010 are derived from our audited consolidated financial statements.  The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and with our consolidated financial statements and the related notes thereto included elsewhere in this report.

(In thousands except for per share amounts)

	Year Ended December 31,
OPERATING DATA	20142			2013			2012			2011			20101
Net Revenues	$	48,470		$	46,736		$	45,461		$	40,586		$	39,920
Operating Expenses		44,370			45,003			43,501			39,540			41,197
Income (Loss) Before Income Taxes		4,102			1,736			1,966			1,053			(1,264	)
Income Tax (Expense) Benefit		(1,691	)		(720	)		(950	)		(655	)		272
Net Income (Loss)		2,411			1,017			1,016			398			(992	)
Basic Net Income (Loss) per Share	$	0.58		$	0.24		$	0.25		$	0.10		$	(0.25	)
Diluted Net Income (Loss) per Share		0.57			0.24			0.24			0.10			(0.25	)
Dividends per Share		—			—			0.50			—			—
Cash Flows from Operating Activities	$	4,590		$	3,544		$	4,057		$	3,441		$	2,984

	At December 31,
BALANCE SHEET DATA	2014		2013		2012		2011		2010
Land, Buildings and Equipment, Net	$	28,076	$	25,130	$	22,120	$	22,776	$	23,948
Total Assets		39,496		37,113		34,900		34,184		32,648
Total Stockholders’ Equity	$	30,995	$	28,265	$	26,885	$	27,474	$	26,546
Number of Common Shares Outstanding at Year End		4,201		4,178		4,148		4,102		4,054

¹ During fiscal year 2010, the Company incurred a non-cash loss on disposal of assets in the amount of $909,540 related to remodeling of our card room.

2 During fiscal year 2014, the Company recorded a $958,000 gain on insurance recoveries from multiple severe storms at the Racetrack.

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Item 7. 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, 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 consolidated financial statements and the accompanying notes to the consolidated financial statements (the “Notes”).  Our actual results could differ materially from those anticipated in the forward-looking statements included in this discussion as a result of certain factors, including, but not limited to, those discussed in “Risk Factors” and “Forward-Looking Statements” included elsewhere in this Annual Report.

STRATEGIC 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 Card 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 Card Casino at the Racetrack.  The Card Casino operates 24 hours a day, seven days a week.  The Card 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.

The following summarizes our financial performance for the last five years (in 000’s):

Financial Performance Summary	20142			2013			2012			2011			20101
Net Revenues	$	48,470		$	46,736		$	45,461		$	40,586		$	39,920
Operating Expenses		44,370			45,003			43,501			39,540			41,197
Income (Loss) Before Income Taxes		4,102			1,736			1,966			1,053			(1,264	)
Income Tax (Expense) Benefit		(1,691	)		(720	)		(950	)		(655	)		272
Net Income (Loss)		2,411			1,017			1,016			398			(992	)

¹ During fiscal year 2010, the Company incurred a $910,000 non-cash loss on disposal of assets related to remodeling of our Card Casino.

2 During fiscal year 2014, the Company recorded a $958,000 gain on insurance recoveries from multiple severe storms at the Racetrack.

The primary strengths of Canterbury Park are our dedicated and capable staff, our first-class facilities located on 392 acres of land (including approximately 200 acres of underutilized property) and the legal authority to offer our unique gaming products in our market area.

Our management team has extensive knowledge of the horse racing, Card Casino, and concession operations, and our staff has demonstrated a commitment to enhancing the customer experience.  The Company believes that management has a good relationship with our workforce and is able to retain qualified personnel as demonstrated by our low turnover rate.

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Our facilities are modern by racetrack industry standards, and we have invested heavily in the past few years to update and upgrade them to meet the needs of our customers and horsemen.  Our 392-acre site, in a prime location on the edge of the Minneapolis–St. Paul metropolitan area in one of the fastest-growing counties in Minnesota, provides us with great long-term growth and development opportunities, and our Board of Directors regularly considers additional uses for underutilized portions of our property.  Our long-term strategic direction is to more fully develop our property as a unique gaming and entertainment destination.

We have a strong commitment to live racing and have been particularly successful in attracting new customers and providing a quality live racing experience for our horse racing fans as well as the horsemen who enter their horses in live races at Canterbury Park.  However, we face a number of longer-term challenges in improving our financial results, including challenges described under “Risk Factors” elsewhere in this report. 

OPERATIONS REVIEW

YEAR ENDED DECEMBER 31, 2014 COMPARED TO YEAR ENDED DECEMBER 31, 2013

EBITDA represents earnings before interest income, income tax expense, and depreciation and amortization.  EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles in the United States of America (“GAAP”), and should not be considered an alternative to, or more meaningful than, net income as an indicator of our operating performance or cash flows from operating activities as a measure of liquidity.  EBITDA has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation of companies in our industry.  Moreover, other companies that provide EBITDA information may calculate EBITDA differently than we do.  During the year ended December 31, 2014, adjusted EBITA excluded the gain on insurance recovery from multiple severe storms at the Racetrack.

The following table sets forth a reconciliation of net income, a GAAP financial measure, to EBITDA (defined above), which is a non-GAAP measure, for the years ended December 31, 2014 and 2013:3

SUMMARY OF EBITDA DATA

	Year Ended December 31,
	2014				2013
NET INCOME		$	2,411,155			$	1,016,712
Interest income			(2,407	)			(2,684	)
Income tax expense			1,691,177				719,781
Depreciation			2,137,778				1,861,702
EBITDA			6,237,703				3,595,511
Gain on insurance recoveries			(957,597	)			—
ADJUSTED EBITDA		$	5,280,106			$	3,595,511

Adjusted EBITDA increased $1,685,000, or 46.9%, and also increased as a percentage of net revenues to 10.9% from 7.7% for the year ended December 31, 2014 compared to the same period in 2013.   

REVENUES

Total net revenues for the year ended December 31, 2014 were $48,470,000, an increase of $1,734,000, or 3.7%, compared to total net revenues of $46,736,000 for the year ended December 31, 2013. Total Card Casino revenue increased 5.8%, concession revenue increased 7.7% and total pari-mutuel revenue decreased 8.8% in 2014 compared to 2013.  See below for a further discussion of our sources of revenues.

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SUMMARY OF PARI-MUTUEL DATA
	Year Ended December 31,
Racing Days	2014		2013
Simulcast only racing days		295		294
Live and simulcast racing days		68		69
Total Number of Racing Days		363		363
On-Track Handle
Simulcast handle on simulcast only racing days	$	22,322,000	$	24,476,000
Simulcast handle on live racing days		9,269,000		9,758,000
Total simulcast handle		31,591,000		34,234,000
Live racing handle		12,299,000		13,299,000
Total On-Track Handle		43,890,000		47,533,000
Out-of-state Live Handle		24,643,000		24,412,000
Total Handle	$	68,533,000	$	71,945,000

Pari-mutuel revenues also include commission and breakage revenues on live on-track and simulcast racing, fees received from out-of-state racetracks for wagering on our live races and proceeds from unredeemed pari-mutuel tickets.  Pari-mutuel revenues decrease $986,000, or 8.8%, to $10,193,000 in 2014 from $11,179,000 in 2013, primarily reflecting a decrease in total amount wagered (“handle”) in 2014 of $3,412,000, or 4.7%, compared to 2013. The primary factors contributing to these decreases are discussed in the following paragraphs.

Total handle wagered on simulcast races in 2014 decreased $2,643,000, or 7.7%, compared to 2013. The decrease is primarily attributable to NMHI resuming simulcast of thoroughbred and quarter horse races during 2014 and increased internet wagering on horse racing.

During 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers, and, through this assessment, the Company decreased the projected redemption rate.  For 2013, the change in accounting estimate decreased our liability for outstanding pari-mutuel vouchers and increased pari-mutuel revenue in our consolidated statements of operations for the period by approximately $412,000 (pre-tax difference), increasing income from operations by this amount as well.  For the years ended December 31, 2014 and 2013, the Company recognized revenue from unredeemed pari-mutuel ticket vouchers in the amount of $327,000 and $663,000, respectively.

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CARD CASINO REVENUES
	Year Ended December 31,
	2014		2013
Poker Games	$	9,838,000	$	9,844,000
Table Games		14,592,000		12,805,000
Total Collection Revenue		24,430,000		22,649,000
Other Revenue		2,600,000		2,897,000
Total Card Casino Revenue	$	27,030,000	$	25,546,000

The primary source of Card Casino revenue is a percentage of the wagers received from the players as compensation for providing the Card Casino facility and services, referred to as “collection revenue”.  Other Revenue presented above includes fees collected for the administration of tournaments and amounts earned as reimbursement of the administrative costs of maintaining jackpot funds.  Card Casino revenue represented 55.8% and 54.7% of the Company’s net revenues for the years ended December 31, 2014 and 2013, respectively.

Total Card Casino revenue increased $1,484,000, or 5.8%, compared to 2013.  Table games collection revenue increased $1,787,000, or 14.0%, in 2014 compared to 2013. Poker revenue had a slight decrease $6,000, or 0.1%, in 2014 over 2013.    The Company believes these increases in table games collection revenue were due to the increased effectiveness of our new customer relationship management system, which was installed in late 2013, and the optimization of the various types of table games the Company offered in 2014.

CONCESSION REVENUES

Concessions revenue increased $501,000, or 7.7% for the year ended December 31, 2014 compared to 2013.  The changes are primarily a result of price increases in food and beverage items implemented in the second quarter of 2014.  Also, the Company experienced higher special event attendance in 2014 which generated more concession sales.

OTHER REVENUES

Other revenue increased $653,000, or 17.2%, to $4,445,000 in fiscal year 2014 compared to 2013.  This increase was due primarily to an increase in admissions and special events revenue.

OPERATING EXPENSES

Total operating expenses decreased approximately $633,000, or 1.4%, to $44,370,000 in 2014, from $45,003,000 in 2013.  Total operating expenses as a percentage of net revenues decreased to 91.5% from 96.3% in 2013.  The primary factors contributing to these decreases are discussed in the following paragraphs.

Total purse expense decreased $31,000, or 0.5%, in 2014 compared to 2013 due to a decrease in live racing and simulcast pari-mutuel revenue partially offset by an increase in purse expense derived from Card Casino revenue.  These factors also caused an overall decrease in MBF expense, as shown in the table below:

					Minnesota Breeders’
	Purse Expense				Fund Expense
	2014		2013		2014		2013
Card Casino	$	3,190,000	$	3,003,000	$	354,000	$	333,000
Simulcast Racing		1,789,000		1,860,000		354,000		385,000
Live Racing		1,305,000		1,452,000		123,000		133,000
Total	$	6,284,000	$	6,315,000	$	831,000	$	851,000

Under Minnesota law, the Company is required to pay 10% of the first $6 million of gross Card Casino revenues towards purses for live horse racing at the Racetrack.  After meeting the $6 million threshold, the Company must pay 14% of gross Card Casino revenues as purse monies.  Of funds allocated for purses, the amounts paid are allocated 90% to the purse funds and 10% to the MBF.

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The Company experienced a decrease in other pari-mutuel expenses of $61,000, or 3.7%, in 2014 compared to 2013 primarily as a result of the Company’s handle being down.

Salaries and benefits expense decreased $195,000, or 1.0%, for the year ended December 31, 2014 compared to the year ended December 31, 2013.  The decreases are primarily due to a reduction in hours worked and reduction in associated payroll taxes partially offset by the increase of the minimum wage that went into effect on August 1, 2014.

Depreciation expense increased $276,000, or 14.8%, in 2014 compared to 2013.  The increase is a result of additions to buildings and equipment including the new Expo and Event Center.

Advertising and marketing costs increased $174,000, or 10.1%, in 2014 compared to 2013.  The increases are primarily attributable to the increased expenditures funded by payments under the CMA for joint marketing, including the launch of the RiverSouth campaign, an area wide marketing initiative designed to increase visitors to Shakopee’s entertainment, hospitality and retail businesses.

During 2014, the Company incurred damage to buildings from multiple severe storms at the Racetrack and received $988,000 in total insurance proceeds. As of December 31, 2014, the Company recognized a $958,000 insurance recoveries gain in the Consolidated Statements of Operations as “Gain on insurance recoveries”.  The storms did not cause any material interruptions to the business or impact on the Company’s consolidated financial results of operations. Based on future events, the Company may receive additional insurance proceeds.  The Company has concluded that these additional funds represent contingent gains and in accordance with U.S. GAAP, have not been accounted for them in the Company’s 2014 consolidated financial statements.

Other operating expenses increased $154,000, or 1.9%, in 2014 compared to 2013.  The increases are primarily due to increased professional fees related to racing and compliance initiatives.

Net income for the year ended December 31, 2014 was $2,411,000 compared to net income of $1,017,000 for the year ended December 31, 2013 an increase of $1,394,000, or 137.1%. The increase is primarily due stronger Card Casino revenue, operational efficiencies and a gain on insurance recovery from multiple severe storms at the Racetrack in 2014.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  We base our assumptions, estimates, and judgments on historical experience, current trends, and other factors that management believes to be relevant at the time the consolidated financial statements are prepared.  On a regular basis, management reviews the accounting policies, assumptions, estimates, and judgments to ensure that our financial statements are presented fairly and in accordance with generally accepted accounting principles.  However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

Our significant accounting policies are included in Note 1 to our consolidated financial statements.  We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Property and Equipment - We have significant capital invested in our property and equipment, which represents approximately 71.1% of our total assets at December 31, 2014.  We utilize our judgment in various ways including: determining whether an expenditure is considered a maintenance expense or a capital asset; determining the estimated useful lives of assets; and determining if or when an asset has been impaired or has been disposed.  Management periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  If the sum of the related expected future net cash flows is less than the carrying value, we will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  To date, we have determined that no impairment of these assets exists.

Stock-Based Compensation – Accounting guidance requires recognition of services provided in exchange for a share-based payment based on the grant date fair market value.  We utilize our judgment in determining the assumptions used to determine the fair value of equity instruments granted using a Black-Scholes model. 

RECENT LEGISLATION

Legislation signed by Minnesota’s Governor on April 15, 2014 increased the minimum wage that must be paid by the Company from $7.25 to $8.00 effective August 1, 2014, with further increases scheduled to $9.00 per hour on August 1, 2015 and to $9.50 per hour on August 1, 2016.  In addition, starting January 1, 2018, the minimum wage will increase at the beginning of each year by the rate of inflation up to a maximum increase of up to 2.5% per year.  The legislation includes a 90-day training wage of $7.75 for 18- and 19-year-olds and, under certain conditions, for 16- and 17- year olds.  The Company employs a large number of individuals who received an hourly wage equal to or slightly above $7.25 per hour, prior to August 1, 2014, this legislation had an adverse effect in 2014 and will continue to have an adverse effect in 2015 and beyond.  While we may be able to mitigate the impact of this increase by raising our prices or reducing our employee count, these measures could themselves have an adverse effect because higher prices and diminished service levels may discourage visits to the Racetrack.  Also, to the extent we are not able to implement such price increases and cost cutting measures, the increase in the minimum wage will adversely affect our net income.

COOPERATIVE MARKETING AGREEMENT

On June 4, 2012, the Company entered into the CMA with the SMSC.  The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry.  Under the CMA, this is achieved through “Purse Enhancement Payments to Horsemen”, paid directly to the MHBPA. Such payments have no direct impact on the Company’s consolidated financial statements or operations.

Under the terms of the CMA, the SMSC paid the horsemen $5.8 million and $5.3 million for purse enhancements for the years ended December 31, 2014 and 2013, respectively.

Under the CMA, 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.  Under the CMA, the SMSC paid the Company $660,000 and $600,000 for marketing purposes for the years ended December 31, 2014 and 2013, respectively.

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Effective January 2015, the CMA was amended to adjust the payment amounts between the “Purse Enhancement Payments to Horsemen” and “Marketing Payments to Canterbury Park.”  Under the CMA as amended, SMSC agreed to make the following purse enhancement and marketing payments for 2015 through 2022:

Year	Purse Enhancement Payments to1 Horsemen	Marketing Payments to Canterbury Park
2015	$6,316,200	$943,800
2016	6,947,820	1,038,180
2017	7,642,602	1,141,998
2018	7,830,000	1,170,000
2019	7,830,000	1,170,000
2020	7,830,000	1,170,000
2021	7,830,000	1,170,000
2022	7,830,000	1,170,000
1 - Includes $100,000 each year to various horsemen associations

 The amounts earned from the marketing payments are recorded as a component of other revenue and the related expenses are recorded as a component of advertising and marketing expense and depreciation in the Company’s consolidated statements of operations.  For the year ended December 31, 2014, the Company recorded $824,842 in other revenue and incurred $608,309 in advertising and marketing expense and $216,533 in depreciation related to the SMSC marketing payment.  For the year ended December 31, 2013, the Company recorded $595,628 in other revenue and incurred $490,072 in advertising and marketing expense and $105,556 in depreciation related to the SMSC marketing payment.  The excess of amounts received over revenue is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheets.

Under the CMA, the Company agreed 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.

As part of the CMA and pursuant to a related SAR Agreement dated June 14, 2012, the Company issued stock appreciation rights to the SMSC.  The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014, 49,500 rights had vested.   The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  The SAR Agreement and all rights granted expire on December 31, 2022.  The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the CMA.  Any excess expenses will be recognized as a component of other operating expenses. For the year ended December 31, 2014, the Company recognized $32,354 of expense related to these stock appreciation rights, of which $32,354 was recorded as an offset to other revenue.   For the year ended December 31, 2013, the Company recognized $227,592 of expense related to these stock appreciation rights, of which $227,592 was recorded as an offset to other revenue.  In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to other revenue and/or other operating expenses related to these changes.

CONTINGENCIES

In accordance with an Earn Out Promissory Note, given to the prior owner of the Racetrack as part of the consideration paid by the Company to acquire the Racetrack in 1994, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years. At this time, management believes that the likelihood that these two conditions will be met and that the Company will be required to pay these amounts is remote. At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles. The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation. The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company. Remaining payments would be made within 90 days of the end of each of the next four operating years.

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 Additionally, the Company entered into a Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community which became effective on June 4, 2012, and was amended in January 2015. The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant. At this time, management believes that the likelihood that the breach of a covenant will occur and that the Company will be required to pay the specified amount related to such covenant is remote.

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 December 31, 2014 and as of the date of this report will not have a material impact on the Company’s consolidated financial position or results of operations.

The Company has committed to payment of statutory distributions under a $500,000 bond issued to the Minnesota Racing Commission as required by Minnesota statute. The Company was not required to make any payments related to this bond in 2014 or 2013, and there is no liability related to this bond on the balance sheet as of December 31, 2014.

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS FROM OPERATING ACTIVITIES

Cash provided by operating activities for the year ended December 31, 2014 was $4,590,111 primarily as a result of the following: The Company reported net income of $2,411,155, which included a gain from insurance recoveries of $958,000 and depreciation of $2,137,778. The Company also experienced a decrease in accounts payable and accrued wages and payroll taxes of $532,739 and income taxes receivable of $727,477.

Net cash provided by operations during the year ended December 31, 2013 was $3,543,919 primarily as a result of the following: The Company reported net income of $1,016,712 and depreciation of $1,861,702. In addition, deferred income taxes increased by $563,601 in 2013 when compared to 2012 and restricted cash decreased by $466,786. These amounts were partially offset by an increase in income taxes receivable of $328,819 and a decrease in due to MHBPA of $533,826 compared to 2012.

CASH FLOWS FROM INVESTING ACTIVITIES

Net cash used in investing activities for the year ended December 31, 2014 of $4,669,269 was used primarily for the construction of a new expo and event center (discussed under “Commitments and Contractual Obligations” below) and a variety of equipment purchases. The capital purchases were partially offset by the proceeds received from insurance claims in the amount of $988,597. For the year ended December 31, 2013, net cash used in investing activities was $4,283,018 and was used primarily for the purchase of technology upgrades and enhancements, including digital signage and customer relationship management equipment, and building improvements.

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash provided by financing activities for the year ended December 31, 2014 was $101,874 and primarily consisted of $93,979 of proceeds received upon the issuance of common stock through the Employee Stock Purchase Plan.

Cash provided by financing activities was $93,325 for the year ended December 31, 2013 and consisted primarily of $102,727 of proceeds received upon the exercise of stock-based awards and from the exercise of shares of common stock purchased by employees pursuant to our Employee Stock Purchase Plan, partially offset by $7,509 of common stock repurchases.

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES

Non-cash investing activities for the years ended December 31, 2014 and 2013 were $46,157 and $589,229, respectively, and consisted of additions to buildings and equipment that are recorded in “Accounts Payable” on the Consolidated Balance Sheets.  The increase in 2013 is primarily due to the implementation of the Company’s customer relationship management system during the fourth quarter of 2013 with the cash disbursements occurring in 2014.

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CASH AND CAPITAL RESOURCES

At December 31, 2014, we had cash and cash equivalents of $8,761,925 compared to $8,739,209 at December 31, 2013. This $22,716 increase consisted of $4,669,269 of net cash used in investing activities partially offset by $4,590,111 of net cash provided by operating activities and $101,874 of net cash provided by financing activities.

As of December 31, 2014, we had $3,000,000 of capacity under a commercial revolving credit line under a general credit and security agreement with Bremer Bank providing for interest at the prime rate but not less than 4.5% per annum, which expires on May 4, 2015. We had no borrowings under the credit line during the year ended December 31, 2014 or the year ended December 31, 2013. The credit agreement contains covenants requiring the Company to maintain certain financial ratios. The Company was in compliance with these requirements at all times throughout the year ended December 31, 2014.

Our three largest sources of revenue: pari-mutuel wagering, Card Casino operations and concessions, are all based on cash transactions. Consequently, we have significant inflows of cash on a daily basis. We designate cash balances which will be required to satisfy certain short-term liabilities such as progressive jackpots, the player pool and amounts due horsemen for purses and awards as “restricted” as a separate balance sheet item.

The Company offers unbanked table games that refer to a wagering system or game where wagers “lost” or “won” by the host are accumulated into a player pool liability for purposes of enhancing the total amount paid back to players in any other card game. The Company is required to return accumulated player pool funds to the players through giveaways, promotional items, prizes or by other means. The player pool liability was $556,000 and $575,000 at December 31, 2014 and 2013, respectively.

The Card Casino offers progressive jackpots for poker games. Amounts collected for these jackpot funds are accrued as liabilities until paid to winners. At December 31, 2014 and 2013, accrued jackpot funds totaled $134,000 and $205,000, respectively. The Minnesota Racing Commission (“MRC”) regulates the operation of the player pool and progressive jackpot pools. These liabilities have the potential for significant fluctuation on a daily basis.

All games in the Card Casino are played using chips. The value of chips issued and outstanding, referred to as the “outstanding chip liability,” was $260,000 and $243,000 at December 31, 2014 and 2013, respectively. This liability has the potential for significant fluctuation on a daily basis depending upon the demand for chip redemptions and sales.

Our second largest individual operating expense item is purse expense. Pursuant to an agreement with the MHBPA, we transferred into a trust account or paid directly to the MHBPA, approximately $5,850,000 and $6,325,000 in purse funds related to thoroughbred races for the years ended December 31, 2014 and 2013, respectively. Minnesota Statutes specify that amounts transferred into trust are the property of the trust and not the Company. There were no unpaid purse fund obligations due to the MHBPA at December 31, 2014 or 2013.

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, will be sufficient to satisfy its liquidity and capital resource requirements for regular operations for the foreseeable future.

OFF-BALANCE SHEET ARRANGEMENTS

The Company currently has no off-balance sheet arrangements and has no intent to enter into any such agreements in the near future.

COMMITMENTS AND CONTRACTUAL OBLIGATIONS

In March 2014, the Company entered into a seven-year agreement with a new totalizator provider. Pursuant to the agreement, the vendor provides totalizator equipment and related software which records and processes all wagers and calculates odds and payoffs. The amounts charged to operations for totalizator expenses for the years ended December 31, 2014 and 2013 were $226,000 and $225,000, respectively.

        The Company has entered into operating leases for rental of office equipment and for track equipment to maintain the Racetrack. Amounts charged to operations under these agreements for the years ended December 31, 2014 and 2013 were $140,000 and $130,000, respectively. All such leases expire in or before February 2018.

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Since December 31, 2014, there have been no material changes outside the ordinary course of business to our contractual obligations as set forth above. As of December 31, 2014, we had no borrowings pursuant to our line of credit and were not party to capital lease obligations, significant purchase obligations or other long-term obligations.

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 which are typically preceded by words such as “believes,” “expects,” “anticipates,” “intends” or similar expressions. For such 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 such 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. Such risks and uncertainties include, but are not limited to: material fluctuations in attendance at the Racetrack, decline in interest in wagering on horse races at the Racetrack, at other tracks, or on unbanked card games offered at the Card Casino, competition from other venues offering unbanked card games or other forms of wagering, competition from other sports and entertainment options, increases in compensation and employee benefit costs, increases in the percentage of revenues allocated for purse fund payments, higher than expected expense related to new marketing initiatives, the impact of wagering products and technologies introduced by competitors, legislative and regulatory decisions and changes, the general health of the gaming sector, and other factors that are beyond our ability to control or predict.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Canterbury Park is not required to provide the information requested by this Item as it qualifies as a smaller reporting company.

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Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

(a)          Financial Statements

The following financial statements of the Company are set forth on pages 31 through 51 of the Form 10-K:

	Page
Report of Independent Registered Public Accounting Firms	31-32
Consolidated Balance Sheets as of December 31, 2014 and 2013	33
Consolidated Statements of Operations for the years ended December 31, 2014 and 2013	34
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2014 and 2013	35
Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013	36
Notes to Consolidated Financial Statements for the years ended December 31, 2014 and 2013	37

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Canterbury Park Holding Corporation

We have audited the accompanying consolidated balance sheet of Canterbury Park Holding Corporation and Subsidiaries (the Company) as of December 31, 2014 and the related consolidated statements of operations, changes in shareholders’ equity and cash flows for the year then ended. The Company’s management is responsible for these financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

/s/ Wipfli LLP

Minneapolis, Minnesota

March 27, 2015

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Canterbury Park Holding Corporation

We have audited the accompanying consolidated balance sheet of Canterbury Park Holding Corporation (a Minnesota corporation) and subsidiaries (the “Company”) as of December 31, 2013, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the year ended December 31, 2013.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  We were not engaged to perform an audit of the Company’s internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Canterbury Park Holding Corporation and subsidiaries as of December 31, 2013, and the results of their operations and their cash flows for the year ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

/s/ Grant Thornton LLP

Minneapolis, Minnesota

March 30, 2014

32

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2014 AND 2013

	2014		2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	8,761,925	$	8,739,209
Restricted cash		1,069,181		1,139,003
Short-term investments		204,525		203,902
Accounts receivable, net of allowance of $22,294 and $40,268, respectively		192,674		338,971
Inventory		231,545		244,281
Prepaid expenses		541,822		624,553
Due from Minnesota horsemen associations		125,828		2,355
Deferred income taxes (Note 3)		265,900		333,300
Income taxes receivable		—		330,672
Total current assets		11,393,400		11,956,246
LONG-TERM ASSETS
Deposits		26,400		26,400
Land, buildings and equipment, net (Note 2)		28,075,879		25,129,986
TOTAL ASSETS	$	39,495,679	$	37,112,632
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,174,466	$	3,502,871
Card Casino accruals		1,401,336		1,546,123
Accrued wages and payroll taxes		1,198,705		946,111
Accrued property taxes		653,385		650,797
Payable to horsepersons		211,571		8,201
Income taxes payable		388,910		—
Total current liabilities		6,028,373		6,654,103
LONG-TERM LIABILITIES
Deferred income taxes (Note 3)		1,972,400		1,726,100
Stock appreciation rights (Note 5)		499,734		467,380
Total long-term liabilities		2,472,134		2,193,480
TOTAL LIABILITIES		8,500,507		8,847,583
STOCKHOLDERS’ EQUITY (Notes 4 and 5)
Common stock, $.01 par value, 10,000,000 shares authorized, 4,201,371 and 4,177,951, respectively, shares issued and outstanding		42,013		41,779
Additional paid-in capital		17,589,349		17,270,615
Retained earnings		13,363,810		10,952,655
Total stockholders’ equity		30,995,172		28,265,049
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	39,495,679	$	37,112,632

See notes to consolidated financial statements.

33

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2014 AND 2013

	2014			2013
OPERATING REVENUES:
Pari-mutuel	$	10,193,239		$	11,179,285
Card Casino		27,029,750			25,546,328
Concessions		6,971,222			6,470,088
Other		4,445,210			3,792,471
Total Revenues		48,639,421			46,988,172
Less: Promotional allowances		(169,584	)		(251,735	)
Net Revenues		48,469,837			46,736,437
OPERATING EXPENSES:
Purse expense		6,283,788			6,314,867
Minnesota Breeders’ Fund		831,063			851,482
Other pari-mutuel expenses		1,575,154			1,635,663
Salaries and benefits		19,648,677			19,843,631
Cost of concession and other sales		3,497,938			3,499,312
Depreciation		2,137,778			1,861,702
Utilities		1,333,141			1,326,179
Advertising and marketing		1,901,646			1,728,192
Gain on disposal of assets		(500	)		(23,752	)
Gain on insurance recoveries (Note 14)		(957,597	)		—
Other operating expenses		8,118,824			7,965,352
Total Operating Expenses		44,369,912			45,002,628
INCOME FROM OPERATIONS		4,099,925			1,733,809
OTHER INCOME
Interest income		2,407			2,684
INCOME BEFORE INCOME TAXES		4,102,332			1,736,493
INCOME TAX EXPENSE (Note 3)		(1,691,177	)		(719,781	)
NET INCOME	$	2,411,155		$	1,016,712
NET INCOME PER COMMON SHARE DATA (Note 6):
Basic	$	0.58		$	0.24
Diluted	$	0.57		$	0.24

See notes to consolidated financial statements.

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CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2014 AND 2013

	Number of Shares			Common Stock			Additional Paid-in Capital			Retained Earnings			Total
Balance at December 31, 2012		4,147,743		$	41,477		$	16,903,245		$	9,940,216		$	26,884,938
Exercise of stock options		5,515			55			39,300			—			39,355
Stock-based compensation		—			—			270,074			—			270,074
Tax expense from exercise of stock-based awards		—			—			(1,893	)		—			(1,893	)
Common stock repurchases		(809	)		(8	)		(3,228	)		(4,273	)		(7,509	)
Issuance of restricted stock		18,290			183			(183	)		—			—
Shares issued under Employee Stock Purchase Plan		7,212			72			63,300			—			63,372
Net income		—			—			—			1,016,712			1,016,712
Balance at December 31, 2013		4,177,951		$	41,779		$	17,270,615		$	10,952,655		$	28,265,049
Exercise of stock options		2,000			20			13,120			—			13,140
Stock-based compensation		—			—			217,094			—			217,094
Tax benefit from exercise of stock-based awards		—			—			7,895			—			7,895
Issuance of restricted stock		13,040			130			(130	)		—			—
Shares issued under Employee Stock Purchase Plan		8,380			84			80,755			—			80,839
Net income		—			—			—			2,411,155			2,411,155
Balance at December 31, 2014		4,201,371		$	42,013		$	17,589,349		$	13,363,810		$	30,995,172

See notes to consolidated financial statements.

35

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2014 AND 2013

	2014			2013
Operating Activities:
Net income	$	2,411,155		$	1,016,712
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		2,137,778			1,861,702
Stock-based compensation expense		217,094			270,074
Stock appreciation rights		32,354			227,592
Deferred income taxes		313,700			563,601
Tax expense (benefit) from exercise of stock-based awards		(7,895	)		1,893
Gain on disposal of assets		(500	)		(23,752	)
Gain on insurance proceeds		(957,597	)		—
(Increase) decrease in cash resulting from changes in operating assets:
Restricted cash		69,822			466,786
Accounts receivable		146,297			73,469
Other current assets		95,467			(167,763	)
Income taxes receivable/payable		727,477			(328,819	)
Increase (decrease) in cash resulting from changes in operating liabilities:
Accounts payable and accrued wages and payroll taxes		(532,739	)		63,360
Card Casino accruals		(144,787	)		66,454
Accrued property taxes		2,588			1,610
Payable to horsepersons		203,370			(15,174	)
Due from MHBPA		(123,473	)		(533,826	)
Net cash provided by operating activities		4,590,111			3,543,919
Investing Activities:
Additions to buildings and equipment		(5,657,743	)		(4,311,011	)
Proceeds from sale of assets		500			28,700
Proceeds from insurance claims		988,597			—
Purchase of investments		(623	)		(707	)
Net cash used in investing activities		(4,669,269	)		(4,283,018	)
Financing Activities
Common stock repurchases		—			(7,509	)
Proceeds from issuance of common stock		93,979			102,727
Tax benefit (expense) from exercise of stock-based awards		7,895			(1,893	)
Net cash provided by financing activities		101,874			93,325
Net increase (decrease) in cash and cash equivalents		22,716			(645,774	)
Cash and cash equivalents at beginning of year		8,739,209			9,384,983
Cash and cash equivalents at end of year	$	8,761,925		$	8,739,209
Supplemental disclosure of non-cash investing and financing activities:
Additions to buildings and equipment funded through accounts payable	$	46,157		$	589,229
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$	650,000		$	485,000

See notes to consolidated financial statements.

36

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED December 31, 2014 AND 2013

1.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated on March 24, 1994 and conducts pari-mutuel wagering operations and hosts “unbanked” card games at its Canterbury Park Racetrack and Card Casino facility (the “Racetrack”) in Shakopee, Minnesota.

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 until 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 Card Casino at the Racetrack.  The Card Casino operates 24 hours a day, seven days a week.  The Card 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.

The consolidated financial statements include the accounts of the Company, Canterbury Park Concessions, Inc. (CPC), and Shakopee Valley RV Park Acquisition Company, LLC after elimination of intercompany accounts and transactions.

Revenue Recognition – The Company’s revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete.  Pari-mutuel revenues are 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.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.  All sales taxes are presented on a net basis and are excluded from revenue.

Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates. 

Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. 

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. 

Short-term Investments – Securities are classified as held to maturity when the Company has the posi­tive intent and ability to hold them to maturity, and are measured at amortized cost.  At December 31, 2014 and 2013, all investments were classified as held-to-maturity.  The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary.  If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings.  Short-term investments consist of certificates of deposit at December 31, 2014 and 2013.  Amortized cost approximated fair value for both periods. 

37

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events.  Credit is granted in the normal course of business without collateral.  Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.  Accounts that are outstanding longer than the contractual terms are considered past due.  When determining the allowances for doubtful accounts, the Company takes several factors into consideration including the overall composition of the accounts receivable aging, its prior history of accounts receivable write-offs, the type of customers and its day-to-day knowledge of specific customers.  The Company writes off accounts receivable when they become uncollectible.  Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in the Company’s consolidated statements of operations.

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and is recorded at the lower of cost (first-in, first-out) or market.

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively.  As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment.  The Company recognizes revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote.  While the Company continues to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued.  In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in the Company’s consolidated statements of operations.

During 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate.  The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods.  For the year ended December 31, 2013, the change in accounting estimate decreased the Company’s liability for outstanding pari-mutuel vouchers and increased pari-mutuel revenue in its consolidated statements of operations for the period by approximately $412,286 (pre-tax difference), increasing income from operations by this amount as well.  Net income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 net income per basic and diluted common share.

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.  The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card 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’ associations.  Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $5,850,000 and $6,325,000 for the years ended December 31, 2014 and 2013, respectively, related to thoroughbred races.  Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company.   

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  Management has determined that no impairment of these assets exists at December 31, 2014. 

38

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred.  The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost.  Repair and maintenance costs are charged to operations when incurred.  Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years.  Building improvements are amortized using the straight-line method over the useful life of the assets.   

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino.  These amounts, along with amounts earned by the player pool, promotional pools, and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date. 

Income Taxes – Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense.  For the years ended December 31, 2014 and 2013, the Company did not recognize any expense related to interest and penalties.

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options.

Fair Values of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock-Based Employee Compensation – The Company accounts for share-based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period).  The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. For more information on the Company’s stock-based compensation plans, see Note 5.

Recent Accounting Pronouncement – In August 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which explicitly requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. Management will be required to assess, in each interim and annual period, if there is substantial doubt of an entity’s ability to continue as a going concern as evidenced by relevant known or knowable conditions including an entity’s ability to meet its future obligations. Management will be required to provide disclosures regardless of whether substantial doubt is alleviated by management’s plans. The guidance will become effective for annual fiscal periods ending after December 15, 2016.

39

In May, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a new comprehensive standard for revenue recognition that is based on the core principle that revenue be recognized in a manner that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures relating to the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is prohibited. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact of the amended revenue recognition guidance on the Company’s consolidated financial statements but does not believe it will have a significant impact.

2. LAND, BUILDINGS AND EQUIPMENT

Land, buildings and equipment, at cost, consist of the following at December 31, 2014 and 2013

	2014			2013
Land	$	6,673,076		$	6,673,076
Buildings and building improvements		26,522,813			22,107,644
Furniture and equipment		18,890,728			18,663,552
		52,086,617			47,444,272
Accumulated depreciation		(24,010,738	)		(22,314,286	)
	$	28,075,879		$	25,129,986

3.      INCOME TAXES

A reconciliation between income taxes computed at the statutory federal income tax rate and the effective tax rate for the years ended December 31, 2014 and 2013 is as follows:

	2014			2013
Federal tax expense at statutory rates	$	1,394,793		$	587,367
Nondeductible lobbying expense		29,518			29,115
State expense, net of federal impact		280,263			128,146
Stock option expense		(364	)		12,465
Other		(13,033	)		(37,312	)
	$	1,691,177		$	719,781

Income tax expense for the years ended December 31, 2014 and 2013 consists of the following:

	2014		2013
Current
Federal	$	1,070,360	$	179
State		307,117		156,002
		1,377,477		156,181
Deferred, primarily Federal		313,700		563,600
	$	1,691,177	$	719,781

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows:

	2014			2013
Deferred tax assets
Vacation accrual	$	73,300		$	68,400
Player rewards program accrual		202,100			269,600
Stock options and stock appreciation rights		404,300			339,300
Total deferred tax assets	$	679,700		$	677,300
Deferred tax liabilities
Tax depreciation greater than book depreciation	$	(2,254,200	)	$	(1,961,400	)
Deferred gain on sale of land		(104,000	)		(104,000	)
Other		(28,000	)		(4,700	)
Total deferred tax liabilities	$	(2,386,200	)	$	(2,070,100	)

The Company is subject to U.S. and Minnesota taxation.  The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2010.

4. STOCKHOLDERS’ EQUITY

Employee Stock Purchase Plan:

The Company offers an Employee Stock Purchase Plan (the “ESPP”) that is open to all employees working more than 15 hours per week.  Shares of the Company’s common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees purchased 8,380 and 7,212 shares in 2014 and 2013, respectively.  As of December 31, 2014, a total of 268,331 shares have been issued since inception out of the 350,000 shares authorized.

KSOP:

During the first quarter of 2013, the Company’s Board of Directors approved an action to combine the Employee Stock Ownership Plan (the “ESOP”) with the 401(k) Plan to create a KSOP Plan (the “KSOP”).  The KSOP allows the Company to use Company stock to match contributions from its employees should it so choose.  This combination became effective on July 15, 2013.  The KSOP is available to eligible employees who had completed six months of service.   There was no match of Company stock to the KSOP in 2014 or 2013. Employer contributions charged to operations for the years ended December 31, 2014 and 2013 were $154,000 and $134,000, respectively, for cash matching of employee contributions.

Stock Repurchase Plan:

On August 24, 2012, the Company announced that its Board of Directors had authorized the repurchase of up to 100,000 shares of the Company’s common stock. During 2013, the Company repurchased 809 shares of common stock at an average price of $9.28 for an aggregate purchase price of $7,509.  No shares were repurchased in 2014.

5.      STOCK-BASED COMPENSATION

Stock-based compensation is recorded at fair value as of the date of grant and included in the salaries and benefits expense line item on the consolidated statements of operations and amounted to $217,000 and $270,000 for the years ended December 31, 2014 and 2013, respectively.

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Stock Options:

The Company’s 1994 Stock Plan (the “Plan”) provides for the granting of awards in the form of stock options, restricted stock, stock appreciation rights, and deferred stock to key employees and non-employees, including directors of and consultants to the Company and any subsidiary, to purchase up to a maximum of 1,450,000 shares of common stock.  The Company currently has 159,100 shares available for grant under the Plan.  The Plan is administered by the Board of Directors which determines the persons who are to receive awards under the Plan, the type of award to be granted, the number of shares subject to each award and, if an option, the exercise price of each option.

The Plan provides that payment of the exercise price may be made in the form of unrestricted shares of common stock already owned by the optionee. The Company calculates the fair market value of unrestricted shares as the average of the high and low sales prices on the date of exercise. The Company’s common stock is purchased upon the exercise of stock options, and restricted stock awards are settled in shares of the Company’s common stock.

Stock option activity related to the Plan during the years ended December 31, 2014 and 2013 is summarized below:

	2014					2013
				Weighted					Weighted
				Average					Average
	Number of			Exercise		Number of			Exercise
	Shares			Price		Shares			Price
Outstanding at beginning of year		271,752		$	9.99		292,267		$	10.13
Granted		—			—		—			—
Exercised		(2,000	)		6.57		(5,515	)		7.14
Expired/Forfeited		(14,500	)		16.78		(15,000	)		13.86
Outstanding at end of year		255,252		$	9.63		271,752		$	9.99
Options exercisable at end of year		255,252		$	9.63		272,142		$	9.99

The grant-date fair value of options outstanding and exercisable at December 31, 2014 and 2013 was $908,000 and $1,063,000, respectively.  The weighted average remaining contractual term of these options is 3.9

There were no options granted in 2014 or 2013.  The total fair value of options exercised during the years ended December 31, 2014 and 2013 was $3,500 and $13,000, respectively.  The total income tax expense (benefit) recognized in the consolidated statements of operations for stock-based compensation arrangements was $(8,000) and $2,000 for 2014 and 2013, respectively.

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The following table summarizes information concerning all options outstanding and options exercisable as of December 31, 2014:

		Options Outstanding								Options Exercisable
				Weighted		Weighted						Weighted
				Average		Average		Aggregate				Average		Aggregate
Range of		Number		Life		Exercise		Intrinsic		Number		Exercise		Intrinsic
Exercise Price		Outstanding		Remaining		Price		Value		Exercisable		Price		Value
$	6.00 - 7.05		88,002		4.4	$	6.23	$	119,962		88,002	$	6.23	$	119,962
$	8.28 - 9.15		77,250		5.2	$	8.34		291,878		77,250	$	8.34		291,878
$	11.35 - 14.55		75,000		2.7	$	13.45		—		75,000	$	13.45		—
$	16.68 - 17.25		15,000		0.1	$	17.1		—		15,000	$	17.1		—
Total			255,252		3.9	$	9.63	$	411,840		255,252	$	9.63	$	411,840

Board of Directors Stock Option and Restricted Stock Grants

The Company’s Stock Plan was amended to authorize annual grantsto non-employee members of the Board of Directors of restricted stock or stock options, or both, as determined by the Board.  Options granted under the Plan generally expire ten years after the grant date and generally become exercisable over a four year period. Generally the restricted stock vests 100% after one year and is subject to restrictions on resale for an additional year.

Restricted stock awards are subject to forfeiture if a board member terminates prior to the shares vesting. A summary of changes in Board of Directors restricted stock as December 31, 2014

				Weighted
				Average
	Restricted			Fair Value
	Stock			Per Share
Non-Vested Balance, December 31, 2012		11,820		$	12.69
Granted		18,290			10.52
Vested		(11,820	)		12.69
Forfeited		—			—
Non-Vested Balance, December 31, 2013		18,290		$	10.52
Granted		13,040			10.61
Vested		(18,290	)		10.52
Forfeited		—			—
Non-Vested Balance, December 31, 2014		13,040		$	10.61

Employee Deferred Stock Award Grants

Employee deferred stock awards are subject to forfeiture if an employee terminates prior to the vesting. Generally, the awards vest ratably over a four-year period and compensation costs are recognized over the vesting period. Compensation costs are recorded in “Salaries and benefits” on the Consolidated Statements of Operations.

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A summary of the changes in employee deferred stock award grants as of December 31, 2014, is as follows:

	Deferred Stock			Weighted Average Fair Value Per Share
Non-Vested Balance, December 31, 2012		20,500		$	9.84
Granted		2,000			10.10
Vested		(4,375	)		9.84
Forfeited		(2,000	)		9.84
Non-Vested Balance, December 31, 2013		16,125		$	9.87
Granted		23,000			10.46
Vested		(4,375	)		9.84
Forfeited		—			—
Non-Vested Balance, December 31, 2014		34,750		$	10.27

At December 31, 2014, there was approximately $365,000 of total unrecognized stock-based compensation expense related to unvested restricted stock and deferred stock awards the Company expects to recognize over a weighted-average period of 2.2 years.

Stock Appreciation Rights (“SARs”)

As part of the Cooperative Marketing Agreement discussed in Note 13, on June 14, 2012, the Company signed a Stock Appreciation Rights Agreement (the “SAR Agreement”) and issued SARs to non-employees.  The SAR Agreement granted rights to non-employees to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014, 49,500 rights had vested.  The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  SARs have no effect on dilutive shares or shares outstanding as any appreciation of the Company’s common stock value over the grant price is paid in cash and not in common stock.  The SAR Agreement and all rights granted expire on December 31, 2022.  

The fair value of SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on the Company’s period-end stock price.  The expected term of the SARs granted is based on the contractual term.  Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the SARs.  The expected dividend yield is based on the Company’s anticipated dividend payments.  The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.   

The following weighted-average assumptions were used in calculating the fair value of SARs granted during the years ended December 31, 2014 and 2013, using the Black-Scholes valuation model:  

	2014		2013
Expected dividend yield	0.00	%	0.00	%
Expected weighted-average volatility	52.8	%	49.5	%
Risk-free interest rate	2.04	%	2.84	%
Expected term of SARs (in years)	8.00		9.00

There were no exercises during the years ended December 31, 2014 or 2013.  The total liability of the SARs at December 31, 2014 was $499,734.

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Changes to the Company’s non-vested SARs during the years ended December 31, 2014 and 2013, are as follows:  

	SARs		Weighted Average Fair Value
Non-vested SARs at December 31, 2012	148,500		$	5.24
Granted	—			—
Vested	(16,500	)		5.03
Cancellations	—			—
Non-vested SARs at December 31, 2013	132,000		$	5.41
Granted	—			—
Vested	(16,500	)		4.50
Cancellations	—			—
Non-vested SARs at December 31, 2014	115,500		$	4.50

6.     NET INCOME PER SHARE COMPUTATIONS

The following is a reconciliation of the numerator and denominator of the net income per common share computations for the years ended December 31, 2014 and 2013

	2014		2013
Net income (numerator) amounts used for basic and diluted per share computations:	$	2,411,155	$	1,016,712
Weighted average shares (denominator) of common stock outstanding:
Basic		4,180,547		4,164,437
Plus dilutive effect of stock options		14,406		25,052
Diluted		4,194,953		4,189,489
Net income per common share:
Basic	$	0.58	$	0.24
Diluted		0.57		0.24

Options to purchase 90,000 shares of common stock at an average of $14.06 per share were outstanding but not included in the computation of diluted net income per share at December 31, 2014 because the options were out of the money at December 31, 2014.

Options to purchase 104,500 shares of common stock at an average of $14.44 per share were outstanding but not included in the computation of diluted net income per share at December 31, 2013 because the options were out of the money at December 31, 2013.

7. GENERAL CREDIT AGREEMENT

The Company has a general credit and security agreement with Bremer Bank, which provides a revolving credit line of up to $3,000,000 and expires May 4, 2015.  The Company had no borrowings under the credit line during the years ended December 31, 2014 or 2013.  The credit agreement contains certain covenants requiring the Company to maintain certain financial ratios.  The Company was in compliance with these requirements as of December 31, 2014.

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8.     OPERATING LEASES AND COMMITMENTS

Purchase Obligations

In March 2014, the Company entered into a seven-year agreement for with a new totalizator provider. Pursuant to the agreement, the vendor provides totalizator equipment and related software which records and processes all wagers and calculates odds and payoffs. The amounts charged to operations for totalizator expenses for the years ended December 31, 2014 and 2013 were $226,000 and $225,000, respectively.

Operating Lease Obligations

The Company has entered into operating leases for rental of office equipment and for track equipment to maintain the Racetrack. Amounts charged to operations under these agreements for the years ended December 31, 2014 and 2013 were $140,000 and $130,000, respectively. All such leases expire in or before February 2018.

Future minimum operating lease payments and purchase obligations are as follows:

	Payment due by period
	Total Amount
Obligations	Committed		2015		2016		2017		2018		2019		Thereafter
Operating leases	$	108,300	$	49,400	$	29,200	$	27,300	$	2,400	$	—	$	—
Purchases	$	1,376,000	$	224,000	$	226,000	$	228,000	$	230,000	$	233,000	$	235,000

9.     CONTINGENCIES

Canterbury Park Holding Corporation was incorporated on March 24, 1994.  On March 29, 1994, the Company acquired all the outstanding securities of Jacobs Realty, Inc. (“JRI”) from Irwin Jacobs and IMR Fund, L.P. (an investment fund for various pension plans and trusts).  JRI was merged into the Company, and the acquisition was accounted for under the purchase method of accounting whereby the acquired assets and liabilities have been recorded at the Company’s cost.  The primary asset of JRI was Canterbury Downs Racetrack and the 325 acres of surrounding land.

On May 20, 1994, the Company adopted a plan of Reorganization pursuant to which the sole shareholder of Canterbury Park Concessions, Inc. (“CPC”), and majority shareholder of the Company, agreed to exchange his shares of CPC stock for 198,888 shares of the Company’s common stock concurrent with the closing of a public offering.  Pursuant to the Plan of Reorganization, CPC became a wholly-owned subsidiary of the Company in August 1994 when the Company completed the initial public offering of its common stock.  This reorganization was treated in a manner similar to a pooling of interests.  Net proceeds received by the Company from the public offering were approximately $4,847,000, which along with additional borrowings under the Company’s line of credit with the majority shareholder, were used to pay off the remaining notes payable from the acquisition of JRI.

In connection with the purchase of the Racetrack, the Company entered into an Earn Out Promissory Note dated March 29, 1994.  In accordance with the Earn Out Note, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years.  At this time, management believes that the likelihood that these two conditions will be met and that the Company will be required to pay these amounts is remote.  At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles.  The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation.  The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company.  Remaining payments would be made within 90 days of the end of each of the next four operating years.

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Additionally, the Company entered into Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”) which became effective on June 15, 2012 and amended in January 2015.  The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant.  At this time, management believes that the likelihood that the breach of a covenant will occur and that the Company will be required to pay the specified amount related to such covenant is remote.

In August 2012, NMHI initiated litigation against the MHBPA and the Company seeking to be relieved of its obligations to supplement purses at Canterbury Park under its Purse Supplement Agreement with the MHBPA.  The Company believed the theories asserted by NMHI in its complaint against them were without merit, and the Company and the MHBPA brought motions to dismiss NMHI’s lawsuit.  In addition, both the Company and the MHBPA moved for an order compelling arbitration of the claims in NMHI’s lawsuit, which is the only remedy permitted by the terms of the Purse Supplement Agreement. On May 2, 2013, the Fourth Judicial District Court ordered that NMHI’s claims against the Company be dismissed with prejudice.

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 December 31, 2014 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.

The Company has committed to payment of statutory distributions under a $500,000 bond issued to the Minnesota Racing Commission as required by Minnesota statute.  The Company was not required to make any payments related to this bond in 2014 or 2013, and there is no liability related to this bond on the balance sheet as of December 31, 2014.

10.   RELATED-PARTY TRANSACTIONS

The Company paid a combined total of $40,000 in 2013 to the Chairman and Vice Chairman of the Company as further director compensation for their additional responsibilities as described in consulting agreements with each individual.

11.   OPERATING SEGMENTS

The Company has three reportable operating segments: horse racing, Card Casino, and concessions.  The horse racing segment primarily represents simulcast and live horse racing operations.  The Card Casino segment represents operations of Canterbury Park’s Card Casino, and the concessions segment represents food and beverage operations provided during simulcast and live racing, in the Card Casino, and during special events.  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 processes to produce those products and services.  The Minnesota Racing Commission regulates the horse racing and Card Casino segments. 

Depreciation, interest expense and income taxes are allocated to the segments but no allocation is made to concessions for shared facilities.  However, the concessions 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.

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The following tables provide information about the Company’s operating segments (in 000’s):

	Year Ended December 31, 2014
	Horse Racing			Card Casino		Concessions		Total
Net revenues from external customers	$	14,460		$	27,030	$	6,980	$	48,470
Intersegment revenues		620			—		1,381		2,001
Net interest income		2			—		—		2
Depreciation		1,601			422		115		2,138
Segment (loss) income before income taxes		(433	)		5,238		1,018		5,823
	At December 31, 2014
Segment Assets	$	37,606		$	1,217	$	15,595	$	54,418

	Year Ended December 31, 2013
	Horse Racing			Card Casino		Concessions		Total
Net revenues from external customers	$	14,704		$	25,545	$	6,487	$	46,736
Intersegment revenues		635			—		1,499		2,134
Net interest income		3			—		—		3
Depreciation		1,198			540		124		1,862
Segment (loss) income before income taxes		(2,138	)		4,654		524		3,040
	At December 31, 2013
Segment Assets	$	34,870		$	1,640	$	13,845	$	50,355

The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals for the years ended December 31, 2014 and 2013 (in 000’s):

	2014			2013
Revenues
Total net revenue for reportable segments	$	50,471		$	48,870
Elimination of intersegment revenues		(2,001	)		(2,134	)
Total consolidated net revenues	$	48,470		$	46,736

Income before income taxes
Total segment income before income taxes	$	5,823		$	3,040
Elimination of intersegment income before income taxes		(1,721	)		(1,304	)
Total consolidated income before income taxes	$	4,102		$	1,736

	December 31,			December 31,
	2014			2013
Assets
Total assets for reportable segments	$	54,418		$	50,355
Elimination of intercompany receivables		(14,922	)		(13,242	)
Total consolidated assets	$	39,496		$	37,113

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12.    SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

	2014 Quarter Ended
	March 31		June 30		September 30		December 31
Net revenues	$	9,374,454	$	13,784,714	$	15,046,958	$	10,263,711
Operating expenses		8,681,623		13,032,832		13,982,105		8,673,352
Net income		406,007		442,934		623,306		938,908
Basic net income per share		0.10		0.11		0.15		0.22
Diluted net income per share		0.10		0.11		0.15		0.22

	2013 Quarter Ended
	March 31		June 30		September 30		December 31
Net revenues	$	9,144,568	$	13,280,950	$	14,274,459	$	10,036,460
Operating expenses		8,638,940		12,948,626		13,999,754		9,415,308
Net income		291,081		193,248		170,503		361,880
Basic net income per share		0.07		0.05		0.04		0.09
Diluted net income per share		0.07		0.05		0.04		0.09

13.   COOPERATIVE MARKETING AGREEMENT 

On June 4, 2012, the Company entered into the CMA with the SMSC.  The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry.  Under the CMA, this is achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA.  Such payments have no direct impact on the Company’s consolidated financial statements or operations.

Under the terms of the CMA, the SMSC paid the horsemen $5.8 million and $5.3 million for purse enhancements for the years ended December 31, 2014 and 2013, respectively.

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Under the CMA, 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.  Under the CMA, the SMSC paid the Company $660,000 and $600,000 for marketing purposes for the years ended December 31, 2014 and 2013, respectively.

Effective January 2015, the CMA was amended to adjust the payment amounts between the “Purse Enhancement Payments to Horsemen” and “Marketing Payments to Canterbury Park.”  Under the CMA as amended, SMSC agreed to make the following purse enhancement and marketing payments for 2015 through 2022: 

Year	Purse Enhancement Payments to 1 Horsemen		Marketing Payments to Canterbury Park
2015	$	6,316,200	$	943,800
2016		6,947,820		1,038,180
2017		7,642,602		1,141,998
2018		7,830,000		1,170,000
2019		7,830,000		1,170,000
2020		7,830,000		1,170,000
2021		7,830,000		1,170,000
2022		7,830,000		1,170,000
1 - Includes $100,000 each year to various horsemen associations

The amounts earned from the marketing payments are recorded as a component of other revenue and the related expenses are recorded as a component of advertising and marketing expense and depreciation in the Company’s consolidated statements of operations.  For the year ended December 31, 2014, the Company recorded $824,842 in other revenue and incurred $608,309 in advertising and marketing expense and $216,533 in depreciation related to the SMSC marketing payment.  For the year ended December 31, 2013, the Company recorded $595,628 in other revenue and incurred $490,072 in advertising and marketing expense and $105,556 in depreciation related to the SMSC marketing payment.  The excess of amounts received over revenue is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheets.

Under the CMA, the Company agreed 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.

As part of the CMA and pursuant to a related SAR Agreement dated June 14, 2012, the Company issued stock appreciation rights to the SMSC.  The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014, 49,500 rights had vested.   The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  The SAR Agreement and all rights granted expire on December 31, 2022.  The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the CMA.  Any excess expenses will be recognized as a component of other operating expenses. For the year ended December 31, 2014, the Company recognized $32,354 of expense related to these stock appreciation rights, of which $32,354 was recorded as an offset to other revenue.   For the year ended December 31, 2013, the Company recognized $227,592 of expense related to these stock appreciation rights, of which $227,592 was recorded as an offset to other revenue.  In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to other revenue and/or other operating expenses related to these changes.

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14.   INSURANCE RECOVERIES

During 2014, the Company incurred damage to buildings from multiple severe storms at the Racetrack and received $988,000 in total insurance proceeds. As of December 31, 2014, the Company recognized a $958,000 insurance recoveries gain in the Consolidated Statements of Operations as “Gain on insurance recoveries”.  The storms did not cause any material interruptions to the business or impact on the Company’s consolidated financial results of operations. Based on future events, the Company may receive additional insurance proceeds.  The Company has concluded that these additional funds represent contingent gains and have not, in accordance with U.S. GAAP, accounted for them in the Company’s 2014 consolidated financial statements.

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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not Applicable.

Item 9A. CONTROLS AND PROCEDURES

(a)               Evaluation of Disclosure Controls and Procedures:

The Company’s Chief Executive Officer, Randall D. Sampson, and Chief Financial Officer, David C. Hansen, 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 to ensure that information required to be disclosed in the reports that the Company files under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that the disclosure controls are also effective to ensure that information required to be disclosed in the Company’s Exchange Act reports is accumulated and communicated to management, including the chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

(b) Management’s annual report on internal control over financial reporting:

Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting of the Company.  This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

The Company’s internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting can only provide reasonable assurance and may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an evaluation of the effectiveness of the system of internal control over financial reporting as of December 31, 2014.  In making this evaluation, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework (2013).  Based on management’s evaluation and those criteria, management concluded that the Company’s system of internal control over financial reporting was effective as of December 31, 2014.

(c)   Changes in Internal Control Over Financial Reporting:

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934) that occurred during our fiscal quarter ended December 31, 2014, that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

52

Item 9B. OTHER INFORMATION

Not Applicable.

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information Incorporated by Reference.

Information required under Item 401 (except as noted below), 405, 406, and 407 (c) (3), (d) (4), and (d) (5) of Regulation S-K to the extent applicable to the Company will be set forth in the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on June 4, 2015 (the “2014 Proxy Statement”), a definitive copy of which will be filed with the Commission within 120 days of the close of the 2014 fiscal year, which information is incorporated herein by reference.  Information required under Item 402 of Regulation S-K regarding executive officers is presented under Item 1(c)(x) herein.

Code of Ethics

The Company has adopted a code of ethics applicable to all employees of and consultants to the Company.  A copy of the Code of Conduct can be obtained free of charge upon written request directed to the Company’s Secretary at the executive offices of the Company.

Item 11.     EXECUTIVE COMPENSATION

Information required under Item 402 of Regulation S-K to the extent applicable to the Company will be set forth in the Company’s 2014 Proxy Statement which information is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information required under Item 201(d) and 403 of Regulation S-K to the extent applicable to the Company will be set forth in the Company’s 2014 Proxy Statement which information is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information, if any, required by Item 404 of Regulation S-K to the extent applicable to the Company will be set forth in the Company’s 2014 Proxy Statement which information is incorporated herein by reference.

53

Item 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES

Information required by Item 14 of this Form 10-K and Item 9(e) of Schedule 14A will be set forth in a section entitled “The Company’s Auditors” in the Company’s 2014 Proxy Statement which information is incorporated herein by reference.

PART IV

Item 15.     EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a). The following Consolidated Financial Statements of Canterbury Park Holding Corporation and subsidiaries are included in Part II, Item 8 pages 31-51:

Reports of Independent Registered Public Accounting Firms

Consolidated Balance Sheets as of December 31, 2014 and 2013

Consolidated Statements of Operations for the years ended December 31, 2014 and 2013

Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2014 and 2013

Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013

Notes to Consolidated Financial statements

(b). The exhibits listed on the “Exhibits Index” on pages 56 & 57are filed with this Form 10-K or incorporated by reference in this report.

(c). No financial statement schedules are required by Item 8 and Item 15(c) of Form 10-K.

54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

Dated:  March 30, 2015	CANTERBURY PARK HOLDING CORPORATION
	By	/s/ Randall D. Sampson
		Randall D. Sampson
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, the following persons on behalf of the Registrant and in the capacities and the dates indicated have signed this report below.

Power of Attorney

Each person whose signature appears below constitutes and appoints CURTIS A. SAMPSON, DALE H. SCHENIAN and RANDALL D. SAMPSON as his true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any of all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Signature	Title	Date
/s/ Curtis A. Sampson	Chairman of the Board	March 30, 2015
Curtis A. Sampson
/s/ Dale H. Schenian	Vice Chairman; Director	March 30, 2015
Dale H. Schenian
/s/ Randall D. Sampson	Chief Executive Officer, President,	March 30, 2015
Randall D. Sampson	General Manager, Treasurer, and Director
/s/ Patrick R. Cruzen	Director	March 30, 2015
Patrick R. Cruzen
/s/ Burton F. Dahlberg	Director	March 30, 2015
Burton F. Dahlberg
/s/ Carin J. Offerman	Director	March 30, 2015
Carin J. Offerman
/s/ David C. Hansen	Chief Financial Officer* and Secretary	March 30, 2015
David C. Hansen

* Principal Accounting Officer

55

CANTERBURY PARK HOLDING CORPORATION

Exhibit Index To

Form 10-K for the Year Ended December 31, 2014

Exhibit Table Reference	Title of Document	Location in Consecutive Numbering System as Filed with the Securities and Exchange Commission
3.1	Articles of Incorporation, as amended.	Filed as Exhibit 3.1 to the Forms SB-2 Registration Statement of the Company, File No. 33-81262C, (the “SB-2 Registration Statement”) and incorporated herein by reference.
3.2	Bylaws, as amended	Filed as Exhibit 3.2 to the SB-2 Registration Statement and incorporated herein by reference.
10.1	Plan of Reorganization dated as of May 20, 1994 between Canterbury Park Holding Corporation and Canterbury Park Concessions, Inc.	Filed as Exhibit 10.1 to the SB-2 Registration Statement and incorporated herein by reference.
10.2	Restated Stock Purchase Agreement	Filed as Exhibit 10.2 to the SB-2 Registration Statement and incorporated herein by reference.
10.3	Letter dated April 4, 1994 from the Minnesota Horsemen’s Benevolent and Protective Association, Inc. to Minnesota Racing Commission waiving 125 day racing minimum	Filed as Exhibit 10.3 to the SB-2 Registration Statement and incorporated herein by reference.
10.5	Stock Option Plan, as amended*	Filed as Exhibit 4.1 to the Registration Statement on Form S-8 of the Company filed on August 28, 1997 (File No. 333-34509) and incorporated herein by reference.
10.6	Form of Non-qualified Stock Option Agreement	Filed as Exhibit 10.6 to the SB-2 Registration Statement and incorporated herein by reference.

*  Denotes an exhibit that covers management contracts or compensatory plans or arrangements.

56

Exhibit Table Reference	Title of Document	Location in Consecutive Numbering System as Filed with the Securities and Exchange Commission
10.7	Curtis A. Sampson Guaranty to HRA	Filed as Exhibit 10.7 to the SB-2 Registration Statement and incorporated herein by reference.
10.10	General Credit and Security Agreement dated as of June 3, 1998 between Canterbury Park Holding Corporation and Bremer Bank N.A. (previously First American Bank, N.A.)  This exhibit 10.10 replaces exhibit 10.10 filed previously as an exhibit to the SB-2 Registration Statement.	Filed as Exhibit 10.10 to the Form 10-KSB for the fiscal year ended December 31, 1998 and incorporated herein by reference.
10.11	Stock Purchase Savings Plan	Filed as Exhibit 10.11 to Form      10-KSB for the fiscal year ended December 31, 1997 and incorporated herein by reference.
10.13	Stock Option Plan for Non-Employee Consultants and Advisors	Filed as Exhibit 4.3 to the Registration Statement on Form S-8 of the Company filed on August 28, 1997 (File No. 333-34509) and incorporated herein by reference.
21	Subsidiaries of the Registrant	Filed herewith.
23.1	Consent of Independent Registered Public Accounting Firm	Filed herewith.
23.2	Consent of Independent Registered Public Accounting Firm	Filed herewith.
24	Power of Attorney	Included in signature page at page 55.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act 0f 2002	Filed herewith.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.

The exhibits referred to in this Exhibit will be supplied to a shareholder at a charge of $.25 per page upon written request directed to the Company’s Secretary at the executive offices of the Company.

57

EX-21

Exhibit 21

SUBSIDIARIES OF CANTERBURY PARK HOLDING CORPORATION

Subsidiaries	Jurisdiction of Incorporation
Canterbury Park Concessions, Inc.	Minnesota
Shakopee Valley RV Park Acquisition Company, LLC	Minnesota

The subsidiaries are 100%-owned directly by Canterbury Park Holding Corporation.  The financial statements of such subsidiaries are included in the Consolidated Financial Statements of Canterbury Park Holding Corporation.

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We have issued our report dated March 27, 2015, with respect to the consolidated financial statements included in the Annual Report of Canterbury Park Holding Corporation on Form 10-K for the year ended December 31, 2014. We hereby consent to the incorporation by reference of said report in the Registration Statements of Canterbury Park Holding Corporation on Forms S-8 (File No. 333-120377, File No. 333-97537, File No. 333-97533, File No. 333-34509, File No. 333-91591, File No. 333-150037, File No. 33-96582 and File No. 33-96580).

/s/ Wipfli LLP

Minneapolis, Minnesota

March 27, 2015

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated March 30, 2015, with respect to the consolidated financial statements included in the Annual Report of Canterbury Park Holding Corporation on Form 10-K for the year ended December 31, 2014.  We hereby consent to the incorporation by reference of said report in the Registration Statements of Canterbury Park Holding Corporation on Forms S-8 (File No. 333-120377, File No. 333-97537, File No. 333-97533, File No. 333-34509, File No. 333-91591, File No. 333-150037, File No. 33-96582 and File No. 33-96580).

/s/ Grant Thornton LLP

Minneapolis, Minnesota

March 30, 2015

EX-31.1

Exhibit 31.1

Certifications

I, Randall D. Sampson certify that:

1. I have reviewed this annual report on Form 10-K of Canterbury Park Holding Corporation;

2. 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;

3. 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;

4. The registrant’s other certifying officer and I are 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:

a. 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;

b. 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;

c. 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

d. 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 of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our 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 function):

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

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

Date: March 30, 2015	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer
	Canterbury Park Holding Corporation

EX-31.2

Exhibit 31.2

Certifications

I, David C. Hansen certify that:

1. I have reviewed this annual report on Form 10-K of Canterbury Park Holding Corporation;

2. 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;

3. 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;

4. The registrant’s other certifying officer and I are 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:

a. 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;

b. 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;

c. 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

d. 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 of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our 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 function):

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

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

Date: March 30, 2015	/s/ David C. Hansen
	David C. Hansen
	Vice President and Chief Financial Officer
	Canterbury Park Holding Corporation

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we the undersigned Chief Executive Officer and Chief Financial Officer, respectively, of Canterbury Park Holding Corporation (the “Company”), hereby certify that:

(1) The Annual Report of the Company on Form 10-K for the period ended December 31, 2014, (the “Report”) 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 Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: March 30, 2015	/s/ Randall D. Sampson
	Randall D. Sampson
	President and Chief Executive Officer
	Canterbury Park Holding Corporation

Date: March 30, 2015	/s/ David C. Hansen
	David C. Hansen
	Vice President and Chief Financial Officer
	Canterbury Park Holding Corporation

XML

Stock-Based Compensation (Summary Of Changes In Restricted Stock) (Details) (Restricted Stock [Member], USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-Vested, Beginning Balance	18,290	11,820
Stock Options, Granted	13,040	18,290
Stock Options, Vested	(18,290)	(11,820)
Stock Options, Forfeited
Non-Vested, Ending Balance	13,040	18,290
Non-Vested, Weighted Average Fair Value Per Share, Beginning Balance	$ 10.52	$ 12.69
Weighted Average Fair Value Per Share, Granted	$ 10.61	$ 10.52
Weighted Average Fair Value Per Share, Vested	$ 10.52	$ 12.69
Weighted Average Fair Value Per Share, Forfeited
Non-Vested, Weighted Average Fair Value Per Share, Ending Balance	$ 10.61	$ 10.52

XML

Operating Segments (Reconciliation Of Assets) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	$ 39,495,679	$ 37,112,632
Reportable Segment [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	54,418,000	50,355,000
Elimination Of Intersegment [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Total consolidated assets	$ (14,922,000)	$ (13,242,000)

XML

Contingencies (Details) (USD $)	12 Months Ended
	Dec. 31, 2014 item acre
Contingencies [Abstract]
Area of land	325
Number of shares agreed to exchange	198,888
Proceeds from issuance Initial Public Offering	$ 4,847,000
Off-track betting payment to the IMR Fund, L.P., per operating year	700,000
Off-track betting payment to the IMR Fund, L.P. as percentage of net pretax profit	20.00%
Earn out note conditions	2
Number of years defined by off-track betting agreement	5 years
Minimum number of payments to IMR Fund, L.P.	5
Maximum term for first payment to be made to IMR Fund, L.P.	90 days
Maximum term for remaining payments to be made to the IMR Fund, L.P.	90 days
Remaining years, payments to the IMR Fund, L.P.	4 years
Bond face amount	$ 500,000

XML

Supplementary Financial Information (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Supplementary Financial Information [Abstract]
Net revenues	$ 10,263,711	$ 15,046,958	$ 13,784,714	$ 9,374,454	$ 10,036,460	$ 14,274,459	$ 13,280,950	$ 9,144,568	$ 48,469,837	$ 46,736,437
Operating expenses	8,673,352	13,982,105	13,032,832	8,681,623	9,415,308	13,999,754	12,948,626	8,638,940	44,369,912	45,002,628
Net income	$ 938,908	$ 623,306	$ 442,934	$ 406,007	$ 361,880	$ 170,503	$ 193,248	$ 291,081	$ 2,411,155	$ 1,016,712
Basic net income per share	$ 0.22	$ 0.15	$ 0.11	$ 0.10	$ 0.09	$ 0.04	$ 0.05	$ 0.07	$ 0.58	$ 0.24
Diluted net income per share	$ 0.22	$ 0.15	$ 0.11	$ 0.10	$ 0.09	$ 0.04	$ 0.05	$ 0.07	$ 0.57	$ 0.24

XML

Operating Leases And Commitments (Narrative) (Details) (USD $)	1 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2014	Dec. 31, 2013
Operating Leases And Commitments [Abstract]
Length of service agreement to totalizator provider	7 years
Service agreement charges		$ 226,000	$ 225,000
Operating lease rent expense charged to operations		$ 140,000	$ 130,000

XML

Income Taxes (Income Tax Expense (Benefit)) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Current, Federal	$ 1,070,360	$ 179
Current, State	307,117	156,002
Current, Total	1,377,477	156,181
Deferred, primarily Federal	313,700	563,600
Income tax expense (benefit)	$ 1,691,177	$ 719,781

XML

Cooperative Marketing Agreement (Purse Enhancement And Marketing Payments) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Cooperative Marketing Agreement [Abstract]
2015, Purse Enhancement	$ 6,316,200
2016, Purse Enhancement	6,947,820
2017, Purse Enhancement	7,642,602
2018, Purse Enhancement	7,830,000
2019, Purse Enhancement	7,830,000
2020, Purse Enhancement	7,830,000
2021, Purse Enhancement	7,830,000
2022, Purse Enhancement	7,830,000
2015, Marketing Payment	943,800
2016, Marketing Payment	1,038,180
2017, Marketing Payment	1,141,998
2018, Marketing Payment	1,170,000
2019, Marketing Payment	1,170,000
2020, Marketing Payment	1,170,000
2021, Marketing Payment	1,170,000
2022, Marketing Payment	1,170,000
Amount to various horsemen associations included in purse enhancement payments to horsemen	$ 100,000

XML

Net Income Per Share Computations (Tables)

12 Months Ended

Dec. 31, 2014

Net Income Per Share Computations [Abstract]

Schedule Of Earnings Per Share Reconciliation

	2014		2013
Net income (numerator) amounts used for basic and diluted per share computations:	$	2,411,155	$	1,016,712
Weighted average shares (denominator) of common stock outstanding:
Basic		4,180,547		4,164,437
Plus dilutive effect of stock options		14,406		25,052
Diluted		4,194,953		4,189,489
Net income per common share:
Basic	$	0.58	$	0.24
Diluted		0.57		0.24

XML

Operating Segments (Narrative) (Details)	12 Months Ended
	Dec. 31, 2014 segment
Operating Segments [Abstract]
Number of reportable operating segments	3
Percent of gross concession segment revenue paid to horse racing segment	25.00%

XML

Stock-Based Compensation (Stock Appreciation Rights Award Activity) (Details) (Stock Appreciation Rights (SARs) [Member], USD $)	0 Months Ended	12 Months Ended
	Jun. 14, 2012	Dec. 31, 2014	Dec. 31, 2013
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested, Beginning Balance		132,000	148,500
Granted	165,000
Vested		(16,500)	(16,500)
Cancellations
Non-vested, Ending Balance		115,500	132,000
Non-vested, Weighted Average Fair Value, Beginning Balance		$ 5.41	$ 5.24
Granted, Weighted Average Fair Value
Vested, Weighted Average Fair Value		$ 4.50	$ 5.03
Cancellations, Weighted Average Fair Value
Non-vested, Weighted Average Fair Value, Ending Balance		$ 4.50	$ 5.41

XML

Stock-Based Compensation (Stock Options Activity) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stock-Based Compensation [Abstract]
Outstanding at beginning of year, Number of Shares	271,752	292,267
Granted, Number of Shares
Exercised, Number of Shares	(2,000)	(5,515)
Expired/Forfeited, Number of Shares	(14,500)	(15,000)
Outstanding at end of period, Number of Shares	255,252	271,752
Exercisable, Number of Shares	255,252	272,142
Outstanding beginning of year, Weighted Average Exercise Price	$ 9.99	$ 10.13
Granted, Weighted Average Exercise Price
Exercised, Weighted Average Exercise Price	$ 6.57	$ 7.14
Expired/Forfeited, Weighted Average Exercise Price	$ 16.78	$ 13.86
Outstanding at end of period, Weighted Average Exercise Price	$ 9.63	$ 9.99
Exercisable, Weighted Average Exercise Price	$ 9.63	$ 9.99

XML

Operating Segments (Reconciliation Of Revenues) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues	$ 10,263,711	$ 15,046,958	$ 13,784,714	$ 9,374,454	$ 10,036,460	$ 14,274,459	$ 13,280,950	$ 9,144,568	$ 48,469,837	$ 46,736,437
Reportable Segment [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues									50,471,000	48,870,000
Elimination Of Intersegment [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total consolidated net revenues									$ (2,001,000)	$ (2,134,000)

XML

Operating Leases And Commitments (Schedule Of Future Minimum Operating Lease Payments And Purchase Obligations) (Details) (USD $)	Dec. 31, 2014
Operating Leases And Commitments [Abstract]
Operating leases, Total Amount Committed	$ 108,300
Operating leases, 2015	49,400
Operating leases, 2016	29,200
Operating leases, 2017	27,300
Operating leases, 2018	2,400
Operating leases, 2019
Operating leases, Thereafter
Purchases, Total Amount Committed	1,376,000
Purchases, 2015	224,000
Purchases, 2016	226,000
Purchases, 2017	228,000
Purchases, 2018	230,000
Purchases, 2019	233,000
Purchases, Thereafter	$ 235,000

XML

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Income Taxes

3.INCOME TAXES

A reconciliation between income taxes computed at the statutory federal income tax rate and the effective tax rate for the years ended December 31, 2014 and 2013 is as follows:

	2014		2013
Federal tax expense at statutory rates	$	1,394,793	$	587,367
Nondeductible lobbying expense		29,518		29,115
State expense, net of federal impact		280,263		128,146
Stock option expense		(364)		12,465
Other		(13,033)		(37,312)
	$	1,691,177	$	719,781

Income tax expense for the years ended December 31, 2014 and 2013 consists of the following:

	2014		2013
Current
Federal	$	1,070,360	$	179
State		307,117		156,002
		1,377,477		156,181
Deferred, primarily Federal		313,700		563,600
	$	1,691,177	$	719,781

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2014 and 2013 are as follows:

	2014		2013
Deferred tax assets
Vacation accrual	$	73,300	$	68,400
Player rewards program accrual		202,100		269,600
Stock options and stock appreciation rights		404,300		339,300
Total deferred tax assets	$	679,700	$	677,300
Deferred tax liabilities
Tax depreciation greater than book depreciation	$	(2,254,200)	$	(1,961,400)
Deferred gain on sale of land		(104,000)		(104,000)
Other		(28,000)		(4,700)
Total deferred tax liabilities	$	(2,386,200)	$	(2,070,100)

The Company is subject to U.S. and Minnesota taxation.  The Company is no longer subject to U.S. federal, state, or local examinations by tax authorities for years before 2010.

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Net Income Per Share Computations (Narrative) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Net Income Per Share Computations [Abstract]
Number of common stock shares to purchase under stock options	90,000	104,500
Average price of common shares under stock options	$ 14.06	$ 14.44

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Cooperative Marketing Agreement (Tables)

12 Months Ended

Dec. 31, 2014

Cooperative Marketing Agreement [Abstract]

Purse Enhancement And Marketing Payments

Year	Purse Enhancement Payments to Horsemen		1	Marketing Payments to Canterbury Park
2015	$	6,316,200		$	943,800
2016		6,947,820			1,038,180
2017		7,642,602			1,141,998
2018		7,830,000			1,170,000
2019		7,830,000			1,170,000
2020		7,830,000			1,170,000
2021		7,830,000			1,170,000
2022		7,830,000			1,170,000
1  - Includes $100,000 each year to various horsemen associations

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Supplementary Financial Information (Tables)

12 Months Ended

Dec. 31, 2014

Supplementary Financial Information [Abstract]

Schedule Of Supplementary Financial Information

	2014 Quarter Ended
	March 31	June 30	September 30	December 31
Net revenues	$ 9,374,454	$ 13,784,714	$ 15,046,958	$ 10,263,711
Operating expenses	8,681,623	13,032,832	13,982,105	8,673,352
Net income	406,007	442,934	623,306	938,908
Basic net income per share	0.10	0.11	0.15	0.22
Diluted net income per share	0.10	0.11	0.15	0.22

	2013 Quarter Ended
	March 31	June 30	September 30	December 31
Net revenues	$ 9,144,568	$ 13,280,950	$ 14,274,459	$ 10,036,460
Operating expenses	8,638,940	12,948,626	13,999,754	9,415,308
Net income	291,081	193,248	170,503	361,880
Basic net income per share	0.07	0.05	0.04	0.09
Diluted net income per share	0.07	0.05	0.04	0.09

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Cooperative Marketing Agreement (Narrative) (Details) (USD $)	3 Months Ended								12 Months Ended		0 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Jun. 14, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Obligation under the Agreement to enhance purses for live horse racing meet due current									$ 5,800,000	$ 5,300,000
Obligation under Agreement to support joint marketing activities due current									660,000	600,000
Revenues related to marketing payment									824,842	595,628
Advertising and marketing expenses related to marketing payment									608,309	490,072
Depreciation related to marketing payment									216,533	105,556
Stock based compensation expense									217,000	270,000
Expense recorded as an offset to revenue	10,263,711	15,046,958	13,784,714	9,374,454	10,036,460	14,274,459	13,280,950	9,144,568	48,469,837	46,736,437
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, other than options granted											165,000
Benefit from appreciation in the value of common stock, per share											$ 14.30
Number of shares of stock each right represents											1
Percentage of the Rights vested											10.00%
Number of the Rights vested									49,500		16,500
Number of remaining Rights vest per year									16,500		16,500
Stock based compensation expense									32,354	227,592
Expense recorded as an offset to revenue									$ 32,354	$ 227,592

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Net Income Per Share Computations (Schedule Of Earnings Per Share Reconciliation) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net Income Per Share Computations [Abstract]
Net income (numerator) amounts used for basic and diluted per share computations	$ 938,908	$ 623,306	$ 442,934	$ 406,007	$ 361,880	$ 170,503	$ 193,248	$ 291,081	$ 2,411,155	$ 1,016,712
Weighted average shares (denominator) of common stock outstanding:
Basic									4,180,547	4,164,437
Plus dilutive effect of stock options									14,406	25,052
Diluted									4,194,953	4,189,489
Net income per common share:
Basic	$ 0.22	$ 0.15	$ 0.11	$ 0.10	$ 0.09	$ 0.04	$ 0.05	$ 0.07	$ 0.58	$ 0.24
Diluted	$ 0.22	$ 0.15	$ 0.11	$ 0.10	$ 0.09	$ 0.04	$ 0.05	$ 0.07	$ 0.57	$ 0.24

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Summary Of Significant Accounting Policies (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014 item	Dec. 31, 2013
Summary Of Significant Accounting Policies [Line Items]
Casino open, number of hours daily									24 hours
Casino open, number of days weekly									7 days
Minnesota State law, maximum number of game tables									80
Pari-mutuel Revenue									$ 10,193,239	$ 11,179,285
Income From Operations									4,099,925	1,733,809
Net income	938,908	623,306	442,934	406,007	361,880	170,503	193,248	291,081	2,411,155	1,016,712
Due to Minnesota Horsemen's Benevolent and Protective Association, Inc.									5,850,000	6,325,000
Property, plant and equipment, minimum cost capitalization									1,000
Restatement Adjustment [Member]
Summary Of Significant Accounting Policies [Line Items]
Liability for outstanding pari-mutuel vouchers										(412,286)
Pari-mutuel Revenue										412,286
Income From Operations										412,286
Net income										$ 239,150
Earnings per basic and diluted common share										$ 0.06
Minimum [Member] | Furniture, Fixtures And Equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life									5 years
Minimum [Member] | Building [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life									15 years
Maximum [Member] | Furniture, Fixtures And Equipment [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life									7 years
Maximum [Member] | Building [Member]
Summary Of Significant Accounting Policies [Line Items]
Property, plant and equipment, useful life									39 years

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Land, Buildings And Equipment (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Gross	$ 52,086,617	$ 47,444,272
Accumulated depreciation	(24,010,738)	(22,314,286)
Net	28,075,879	25,129,986
Land [Member]
Property, Plant and Equipment [Line Items]
Gross	6,673,076	6,673,076
Building And Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Gross	26,522,813	22,107,644
Furniture And Equipment [Member]
Property, Plant and Equipment [Line Items]
Gross	$ 18,890,728	$ 18,663,552

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Land, Buildings And Equipment

12 Months Ended

Dec. 31, 2014

Land, Buildings And Equipment [Abstract]

Land, Buildings And Equipment

2.LAND, BUILDINGS AND EQUIPMENT

Land, buildings and equipment, at cost, consist of the following at December 31, 2014 and 2013:

	2014		2013
Land	$	6,673,076	$	6,673,076
Buildings and building improvements		26,522,813		22,107,644
Furniture and equipment		18,890,728		18,663,552
		52,086,617		47,444,272
Accumulated depreciation		(24,010,738)		(22,314,286)
	$	28,075,879	$	25,129,986

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Income Taxes (Reconciliation Of Effective Tax Rate) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Federal tax expense at statutory rates	$ 1,394,793	$ 587,367
Nondeductible lobbying expense	29,518	29,115
State expense, net of federal impact	280,263	128,146
Stock option expense	(364)	12,465
Other	(13,033)	(37,312)
Income tax expense (benefit)	$ 1,691,177	$ 719,781

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Stock-Based Compensation (Summary Of Changes In Employee Deferred Stock Award Grants) (Details) (Employee Deferred Stock Award [Member], USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Employee Deferred Stock Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Non-vested, Beginning Balance	16,125	20,500
Granted	23,000	2,000
Vested	(4,375)	(4,375)
Forfeited		(2,000)
Non-vested, Ending Balance	34,750	16,125
Non-vested, Weighted Average Fair Value, Beginning Balance	$ 9.87	$ 9.84
Granted, Weighted Average Fair Value	$ 10.46	$ 10.10
Vested, Weighted Average Fair Value	$ 9.84	$ 9.84
Forfeited, Weighted Average Fair Value		$ 9.84
Non-vested, Weighted Average Fair Value, Ending Balance	$ 10.27	$ 9.87

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Operating Segments (Reconciliation Of Income Before Income Taxes) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes	$ 4,102,332	$ 1,736,493
Reportable Segment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes	5,823,000	3,040,000
Elimination Of Intersegment [Member]
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Total consolidated income before income taxes	$ (1,721,000)	$ (1,304,000)

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Consolidated Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 8,761,925	$ 8,739,209
Restricted cash	1,069,181	1,139,003
Short-term investments	204,525	203,902
Accounts receivable, net of allowance of $22,294 and $40,268, respectively	192,674	338,971
Inventory	231,545	244,281
Prepaid expenses	541,822	624,553
Due from Minnesota horsemen associations	125,828	2,355
Deferred income taxes (Note 3)	265,900	333,300
Income taxes receivable		330,672
Total current assets	11,393,400	11,956,246
LONG-TERM ASSETS
Deposits	26,400	26,400
Land, buildings and equipment, net (Note 2)	28,075,879	25,129,986
Total assets	39,495,679	37,112,632
CURRENT LIABILITIES
Accounts payable	2,174,466	3,502,871
Card Casino accruals	1,401,336	1,546,123
Accrued wages and payroll taxes	1,198,705	946,111
Accrued property taxes	653,385	650,797
Payable to horsepersons	211,571	8,201
Income taxes payable	388,910
Total current liabilities	6,028,373	6,654,103
LONG-TERM LIABILITIES
Deferred income taxes (Note 3)	1,972,400	1,726,100
Stock appreciation rights (Note 5)	499,734	467,380
Total long-term liabilities	2,472,134	2,193,480
Total Liabilities	8,500,507	8,847,583
STOCKHOLDERS' EQUITY (Notes 4 and 5)
Common stock, $.01 par value, 10,000,000 shares authorized, 4,201,371 and 4,177,951, respectively, shares issued and outstanding	42,013	41,779
Additional paid-in capital	17,589,349	17,270,615
Retained earnings	13,363,810	10,952,655
Total stockholders' equity	30,995,172	28,265,049
Total liabilities and stockholders' equity	$ 39,495,679	$ 37,112,632

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General Credit Agreement (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
General Credit Agreement [Abstract]
Revolving credit line maximum borrowing amount	$ 3,000,000
Borrowings under credit line	$ 0	$ 0

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Consolidated Statements Of Cash Flows (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Operating Activities:
Net income	$ 2,411,155	$ 1,016,712
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	2,137,778	1,861,702
Stock-based compensation expense	217,094	270,074
Stock appreciation rights	32,354	227,592
Deferred income taxes	313,700	563,601
Tax expense (benefit) from exercise of stock-based awards	(7,895)	1,893
Gain on disposal of assets	(500)	(23,752)
Gain on insurance proceeds	(957,597)
(Increase) decrease in cash resulting from changes in operating assets:
Restricted cash	69,822	466,786
Accounts receivable	146,297	73,469
Other current assets	95,467	(167,763)
Income taxes receivable/payable	727,477	(328,819)
Increase (decrease) in cash resulting from changes in operating liabilities:
Accounts payable and accrued wages and payroll taxes	(532,739)	63,360
Card Casino accruals	(144,787)	66,454
Accrued property taxes	2,588	1,610
Payable to horsepersons	203,370	(15,174)
Due from MHBPA	(123,473)	(533,826)
Net cash provided by operating activities	4,590,111	3,543,919
Investing Activities:
Additions to buildings and equipment	(5,657,743)	(4,311,011)
Proceeds from sale of assets	500	28,700
Proceeds from insurance claims	988,597
Purchase of investments	(623)	(707)
Net cash used in investing activities	(4,669,269)	(4,283,018)
Financing Activities
Common stock repurchases		(7,509)
Proceeds from issuance of common stock	93,979	102,727
Tax benefit (expense) from exercise of stock-based awards	7,895	(1,893)
Net cash provided by financing activities	101,874	93,325
Net increase (decrease) in cash and cash equivalents	22,716	(645,774)
Cash and cash equivalents at beginning of year	8,739,209	9,384,983
Cash and cash equivalents at end of year	8,761,925	8,739,209
Supplemental disclosure of non-cash investing and financing activities:
Additions to buildings and equipment funded through accounts payable	46,157	589,229
Supplemental disclosure of cash flow information:
Income taxes paid, net of refunds	$ 650,000	$ 485,000

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Stockholders' Equity (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Aug. 24, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares repurchased, value		$ 7,509
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Minimum hours per week required to participate in ESPP	15 hours
Period of intervals after which common stock may be purchased by employees	3 months
Percentage of fair market value of common stock purchased at by employees	90.00%
Number of shares purchased by employees under Employee Stock Purchase Plan	8,380	7,212
Shares issued for Employee Stock Purchase Plan	268,331
Shares available under plan	350,000
KSOP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period of service required to be eligible for KSOP	6 months
Employer contributions to 401(k) plan	154,000	134,000
Stock Repurchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of additional shares authorized for repurchase			100,000
Shares repurchased	0	809
Shares repurchased, price per share		$ 9.28
Shares repurchased, value		$ 7,509

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Land, Buildings And Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Land, Buildings And Equipment [Abstract]

Land, Buildings And Equipment, At Cost

	2014		2013
Land	$	6,673,076	$	6,673,076
Buildings and building improvements		26,522,813		22,107,644
Furniture and equipment		18,890,728		18,663,552
		52,086,617		47,444,272
Accumulated depreciation		(24,010,738)		(22,314,286)
	$	28,075,879	$	25,129,986

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Stock-Based Compensation (Narrative) (Details) (USD $)	0 Months Ended	12 Months Ended
	Jun. 14, 2012	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense		$ 217,000	$ 270,000
Number of options granted
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available under plan		1,450,000
Share-based compensation shares available for grant		159,100
Share-based compensation, expiration period		10 years
Period options become exercisable		4 years
Outstanding and exercisable options grant date fair value		908,000	1,063,000
Outstanding and exercisable options weighted average remaining contractual term		3 years 10 months 24 days
Number of options granted		0	0
Fair value of options exercised		3,500	13,000
Total income tax expense (benefit) for stock-based compensation arrangements		(8,000)	2,000
Employee Deferred Stock Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, other than options granted		23,000	2,000
Share-based compensation, vesting period		4 years
Unrecognized compensation costs		365,000
Recognition period for unrecognized compensation costs		2 years 2 months 12 days
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock, percentage that will vest		100.00%
Share-based compensation, vesting period		1 year
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense		32,354	227,592
Share-based compensation, other than options granted	165,000
Benefit from appreciation in the value of common stock, per share	$ 14.30
Number of shares of stock each right represents	1
Percentage of the Rights vested	10.00%
Number of the Rights vested	16,500	49,500
Number of remaining Rights vest per year	16,500	16,500
Exercised, SARs		0	0
Total liability of SARs vested		$ 499,734

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation [Abstract]

Stock Options Activity

	2014				2013
			Weighted				Weighted
			Average				Average
	Number of		Exercise		Number of		Exercise
	Shares		Price		Shares		Price
Outstanding at beginning of year		271,752	$	9.99		292,267	$	10.13
Granted		-		-		-		-
Exercised		(2,000)		6.57		(5,515)		7.14
Expired/Forfeited		(14,500)		16.78		(15,000)		13.86
Outstanding at end of year		255,252	$	9.63		271,752	$	9.99
Options exercisable at end of year		255,252	$	9.63		272,142	$	9.99

Stock Options By Exercise Price Range

		Options Outstanding						Options Exercisable
			Weighted		Weighted					Weighted
			Average		Average		Aggregate			Average		Aggregate
Range of		Number	Life		Exercise		Intrinsic	Number		Exercise		Intrinsic
Exercise Price		Outstanding	Remaining		Price		Value	Exercisable		Price		Value
$	6.00 - 7.05	88,002	4.4	$	6.23	$	119,962	88,002	$	6.23	$	119,962
$	8.28 - 9.15	77,250	5.2	$	8.34		291,878	77,250	$	8.34		291,878
$	11.35 - 14.55	75,000	2.7	$	13.45		-	75,000	$	13.45		-
$	16.68 - 17.25	15,000	0.1	$	17.1		-	15,000	$	17.1		-
	Total	255,252	3.9	$	9.63	$	411,840	255,252	$	9.63	$	411,840

Summary Of Changes In Restricted Stock

			Weighted
			Average
	Restricted		Fair Value
	Stock		Per Share
Non-Vested Balance, December 31, 2012		11,820	$	12.69
Granted		18,290		10.52
Vested		(11,820)		12.69
Forfeited		-		-
Non-Vested Balance, December 31, 2013		18,290	$	10.52
Granted		13,040		10.61
Vested		(18,290)		10.52
Forfeited		-		-
Non-Vested Balance, December 31, 2014		13,040	$	10.61

Summary Of Changes In Employee Deferred Stock Award Grants

			Weighted
			Average
	Deferred		Fair Value
	Stock		Per Share
Non-Vested Balance, December 31, 2012		20,500	$	9.84
Granted		2,000		10.10
Vested		(4,375)		9.84
Forfeited		(2,000)		9.84
Non-Vested Balance, December 31, 2013		16,125	$	9.87
Granted		23,000		10.46
Vested		(4,375)		9.84
Forfeited		-		-
Non-Vested Balance, December 31, 2014		34,750	$	10.27

Stock Appreciation Rights Valuation Assumptions

	2014		2013
Expected dividend yield	0.00	%	0.00	%
Expected weighted-average volatility	52.8	%	49.5	%
Risk-free interest rate	2.04	%	2.84	%
Expected term of SARs (in years)	8.00		9.00

Stock Appreciation Rights Award Activity

	SARs		Weighted Average Fair Value
Non-vested SARs at December 31, 2012		148,500	$	5.24
Granted		-		-
Vested		(16,500)		5.03
Cancellations		-		-
Non-vested SARs at December 31, 2013		132,000	$	5.41
Granted		-		-
Vested		(16,500)		4.50
Cancellations		-		-
Non-vested SARs at December 31, 2014		115,500	$	4.50

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Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated on March 24, 1994 and conducts pari-mutuel wagering operations and hosts “unbanked” card games at its Canterbury Park Racetrack and Card Casino facility (the “Racetrack”) in Shakopee, Minnesota.

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 until 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 Card Casino at the Racetrack.  The Card Casino operates 24 hours a day, seven days a week.  The Card 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.

The consolidated financial statements include the accounts of the Company, Canterbury Park Concessions, Inc. (CPC), and Shakopee Valley RV Park Acquisition Company, LLC after elimination of intercompany accounts and transactions.

Revenue Recognition – The Company’s revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete.  Pari-mutuel revenues are 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.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.  All sales taxes are presented on a net basis and are excluded from revenue.

Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates. 

Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. 

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. 

Short-term Investments – Securities are classified as held to maturity when the Company has the positive intent and ability to hold them to maturity, and are measured at amortized cost.  At December 31, 2014 and 2013, all investments were classified as held-to-maturity.  The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary.  If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings.  Short-term investments consist of certificates of deposit at December 31, 2014 and 2013.  Amortized cost approximated fair value for both periods. 

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events.  Credit is granted in the normal course of business without collateral.  Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.  Accounts that are outstanding longer than the contractual terms are considered past due.  When determining the allowances for doubtful accounts, the Company takes several factors into consideration including the overall composition of the accounts receivable aging, its prior history of accounts receivable write-offs, the type of customers and its day-to-day knowledge of specific customers.  The Company writes off accounts receivable when they become uncollectible.  Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in the Company’s consolidated statements of operations.

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and is recorded at the lower of cost (first-in, first-out) or market. 

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively.  As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment.  The Company recognizes revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote.  While the Company continues to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued.  In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in the Company’s consolidated statements of operations. 

During 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate.  The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods.  For the year ended December 31, 2013, the change in accounting estimate decreased the Company’s liability for outstanding pari-mutuel vouchers and increased pari-mutuel revenue in its consolidated statements of operations for the period by approximately $412,286 (pre-tax difference), increasing income from operations by this amount as well.  Net income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 net income per basic and diluted common share. 

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.  The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card 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’ associations.  Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $5,850,000 and $6,325,000 for the years ended December 31, 2014 and 2013, respectively, related to thoroughbred races.  Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company.   

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  Management has determined that no impairment of these assets exists at December 31, 2014. 

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred.  The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost.  Repair and maintenance costs are charged to operations when incurred.  Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years.  Building improvements are amortized using the straight-line method over the useful life of the assets.   

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino.  These amounts, along with amounts earned by the player pool, promotional pools, and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date.

Income Taxes – Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense.  For the years ended December 31, 2014 and 2013, the Company did not recognize any expense related to interest and penalties. 

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options.

FairValues of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock-Based Employee Compensation – The Company accounts for share-based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period).  The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. For more information on the Company’s stock-based compensation plans, see Note 5.

Recent Accounting Pronouncement – In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which explicitly requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. Management will be required to assess, in each interim and annual period, if there is substantial doubt of an entity's ability to continue as a going concern as evidenced by relevant known or knowable conditions including an entity's ability to meet its future obligations. Management will be required to provide disclosures regardless of whether substantial doubt is alleviated by management's plans. The guidance will become effective for annual fiscal periods ending after December 15, 2016.

In May, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 is a new comprehensive standard for revenue recognition that is based on the core principle that revenue be recognized in a manner that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures relating to the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is prohibited. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact of the amended revenue recognition guidance on the Company’s consolidated financial statements but does not believe it will have a significant impact.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance	$ 22,294	$ 40,268
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares issued	4,201,371	4,177,951
Common stock, shares outstanding	4,201,371	4,177,951

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Operating Segments

12 Months Ended

Dec. 31, 2014

Operating Segments [Abstract]

Operating Segments

11.OPERATING SEGMENTS

The Company has three reportable operating segments: horse racing, Card Casino, and concessions.  The horse racing segment primarily represents simulcast and live horse racing operations.  The Card Casino segment represents operations of Canterbury Park’s Card Casino, and the concessions segment represents food and beverage operations provided during simulcast and live racing, in the Card Casino, and during special events.  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 processes to produce those products and services.  The Minnesota Racing Commission regulates the horse racing and Card Casino segments. 

Depreciation, interest expense and income taxes are allocated to the segments but no allocation is made to concessions for shared facilities.  However, the concessions 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. 

The following tables provide information about the Company’s operating segments (in 000’s):

	Year Ended December 31, 2014
	Horse Racing		Card Casino		Concessions		Total
Net revenues from external customers	$	14,460	$	27,030	$	6,980	$	48,470
Intersegment revenues		620		-		1,381		2,001
Net interest income		2		-		-		2
Depreciation		1,601		422		115		2,138
Segment (loss) income before income taxes		(433)		5,238		1,018		5,823
	At December 31, 2014
Segment Assets	$	37,606	$	1,217	$	15,595	$	54,418

	Year Ended December 31, 2013
	Horse Racing		Card Casino		Concessions		Total
Net revenues from external customers	$	14,704	$	25,545	$	6,487	$	46,736
Intersegment revenues		635		-		1,499		2,134
Net interest income		3		-		-		3
Depreciation		1,198		540		124		1,862
Segment (loss) income before income taxes		(2,138)		4,654		524		3,040
	At December 31, 2013
Segment Assets	$	34,870	$	1,640	$	13,845	$	50,355

The following are reconciliations of reportable segment revenues, income before income taxes, and assets, to the Company’s consolidated totals for the years ended December 31, 2014 and 2013 (in 000’s):

	2014		2013
Revenues
Total net revenue for reportable segments	$	50,471	$	48,870
Elimination of intersegment revenues		(2,001)		(2,134)
Total consolidated net revenues	$	48,470	$	46,736

Income before income taxes
Total segment income before income taxes	$	5,823	$	3,040
Elimination of intersegment income before income taxes		(1,721)		(1,304)
Total consolidated income before income taxes	$	4,102	$	1,736

	December 31,		December 31,
	2014		2013
Assets
Total assets for reportable segments	$	54,418	$	50,355
Elimination of intercompany receivables		(14,922)		(13,242)
Total consolidated assets	$	39,496	$	37,113

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Document And Entity Information (USD $)	12 Months Ended
	Dec. 31, 2014	Mar. 15, 2015	Jun. 30, 2014
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	CANTERBURY PARK HOLDING CORP
Entity Central Index Key	0000926761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		4,213,877
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 24,073,872

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Supplementary Financial Information

12 Months Ended

Dec. 31, 2014

Supplementary Financial Information [Abstract]

Supplementary Financial Information

12.SUPPLEMENTARY FINANCIAL INFORMATION (UNAUDITED)

	2014 Quarter Ended
	March 31	June 30	September 30	December 31
Net revenues	$ 9,374,454	$ 13,784,714	$ 15,046,958	$ 10,263,711
Operating expenses	8,681,623	13,032,832	13,982,105	8,673,352
Net income	406,007	442,934	623,306	938,908
Basic net income per share	0.10	0.11	0.15	0.22
Diluted net income per share	0.10	0.11	0.15	0.22

	2013 Quarter Ended
	March 31	June 30	September 30	December 31
Net revenues	$ 9,144,568	$ 13,280,950	$ 14,274,459	$ 10,036,460
Operating expenses	8,638,940	12,948,626	13,999,754	9,415,308
Net income	291,081	193,248	170,503	361,880
Basic net income per share	0.07	0.05	0.04	0.09
Diluted net income per share	0.07	0.05	0.04	0.09

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Consolidated Statements Of Operations (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
OPERATING REVENUES:
Pari-mutuel	$ 10,193,239	$ 11,179,285
Card Casino	27,029,750	25,546,328
Concessions	6,971,222	6,470,088
Other	4,445,210	3,792,471
Total Revenues	48,639,421	46,988,172
Less: Promotional allowances	(169,584)	(251,735)
Net Revenues	48,469,837	46,736,437
OPERATING EXPENSES:
Purse expense	6,283,788	6,314,867
Minnesota Breeders' Fund	831,063	851,482
Other pari-mutuel expenses	1,575,154	1,635,663
Salaries and benefits	19,648,677	19,843,631
Cost of concession and other sales	3,497,938	3,499,312
Depreciation	2,137,778	1,861,702
Utilities	1,333,141	1,326,179
Advertising and marketing	1,901,646	1,728,192
Gain on disposal of assets	(500)	(23,752)
Gain on insurance recoveries (Note 14)	(957,597)
Other operating expenses	8,118,824	7,965,352
Total Operating Expenses	44,369,912	45,002,628
INCOME FROM OPERATIONS	4,099,925	1,733,809
OTHER INCOME:
Interest income	2,407	2,684
INCOME BEFORE INCOME TAXES	4,102,332	1,736,493
INCOME TAX EXPENSE (Note 3)	(1,691,177)	(719,781)
NET INCOME	$ 2,411,155	$ 1,016,712
NET INCOME PER COMMON SHARE DATA (Note 6):
Basic	$ 0.58	$ 0.24
Diluted	$ 0.57	$ 0.24

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Net Income Per Share Computations

12 Months Ended

Dec. 31, 2014

Net Income Per Share Computations [Abstract]

Net Income Per Share Computations

6.NET INCOME PER SHARE COMPUTATIONS

The following is a reconciliation of the numerator and denominator of the net income per common share computations for the years ended December 31, 2014 and 2013:

	2014		2013
Net income (numerator) amounts used for basic and diluted per share computations:	$	2,411,155	$	1,016,712
Weighted average shares (denominator) of common stock outstanding:
Basic		4,180,547		4,164,437
Plus dilutive effect of stock options		14,406		25,052
Diluted		4,194,953		4,189,489
Net income per common share:
Basic	$	0.58	$	0.24
Diluted		0.57		0.24

Options to purchase 90,000 shares of common stock at an average of $14.06 per share were outstanding but not included in the computation of diluted net income per share at December 31, 2014 because the options were out of the money at December 31, 2014.  

Options to purchase 104,500 shares of common stock at an average of $14.44 per share were outstanding but not included in the computation of diluted net income per share at December 31, 2013 because the options were out of the money at December 31, 2013.  

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Stock-Based Compensation [Abstract]

Stock-Based Compensation

5.STOCK-BASED COMPENSATION

Stock-based compensation is recorded at fair value as of the date of grant and included in the salaries and benefits expense line item on the consolidated statements of operations and amounted to $217,000 and $270,000 for the years ended December 31, 2014 and 2013, respectively. 

Stock Options:

The Company’s 1994 Stock Plan (the “Plan”) provides for the granting of awards in the form of stock options, restricted stock, stock appreciation rights, and deferred stock to key employees and non-employees, including directors of and consultants to the Company and any subsidiary, to purchase up to a maximum of 1,450,000 shares of common stock.  The Company currently has 159,100 shares available for grant under the Plan.  The Plan is administered by the Board of Directors which determines the persons who are to receive awards under the Plan, the type of award to be granted, the number of shares subject to each award and, if an option, the exercise price of each option. 

The Plan provides that payment of the exercise price may be made in the form of unrestricted shares of common stock already owned by the optionee. The Company calculates the fair market value of unrestricted shares as the average of the high and low sales prices on the date of exercise. The Company’s common stock is purchased upon the exercise of stock options, and restricted stock awards are settled in shares of the Company’s common stock.

Stock option activity related to the Plan during the years ended December 31, 2014 and 2013 is summarized below:

	2014				2013
			Weighted				Weighted
			Average				Average
	Number of		Exercise		Number of		Exercise
	Shares		Price		Shares		Price
Outstanding at beginning of year		271,752	$	9.99		292,267	$	10.13
Granted		-		-		-		-
Exercised		(2,000)		6.57		(5,515)		7.14
Expired/Forfeited		(14,500)		16.78		(15,000)		13.86
Outstanding at end of year		255,252	$	9.63		271,752	$	9.99
Options exercisable at end of year		255,252	$	9.63		272,142	$	9.99

The grant-date fair value of options outstanding and exercisable at December 31, 2014 and 2013 was $908,000 and $1,063,000, respectively.  The weighted average remaining contractual term of these options is 3.9.

There were no options granted in 2014 or 2013.  The total fair value of options exercised during the years ended December 31, 2014 and 2013 was $3,500 and $13,000, respectively.  The total income tax expense (benefit) recognized in the consolidated statements of operations for stock-based compensation arrangements was $(8,000) and $2,000for 2014 and 2013, respectively.

The following table summarizes information concerning all options outstanding and options exercisable as of December 31, 2014:

		Options Outstanding						Options Exercisable
			Weighted		Weighted					Weighted
			Average		Average		Aggregate			Average		Aggregate
Range of		Number	Life		Exercise		Intrinsic	Number		Exercise		Intrinsic
Exercise Price		Outstanding	Remaining		Price		Value	Exercisable		Price		Value
$	6.00 - 7.05	88,002	4.4	$	6.23	$	119,962	88,002	$	6.23	$	119,962
$	8.28 - 9.15	77,250	5.2	$	8.34		291,878	77,250	$	8.34		291,878
$	11.35 - 14.55	75,000	2.7	$	13.45		-	75,000	$	13.45		-
$	16.68 - 17.25	15,000	0.1	$	17.1		-	15,000	$	17.1		-
	Total	255,252	3.9	$	9.63	$	411,840	255,252	$	9.63	$	411,840

Board of Directors Stock Option and Restricted Stock Grants

The Company’s Stock Plan was amended to authorize annual grantsto non-employee members of the Board of Directorsof restricted stock or stock options, or both, as determined by the Board.  Options granted under the Plan generally expire ten years after the grant date and generally become exercisable over a four year period. Generally the restricted stock vests100%after one year and is subject to restrictions on resale for an additional year. 

Restricted stock awards are subject to forfeiture if a board member terminates prior to the shares vesting. A summary of changes in Board of Directors restricted stock as December 31, 2014:

			Weighted
			Average
	Restricted		Fair Value
	Stock		Per Share
Non-Vested Balance, December 31, 2012		11,820	$	12.69
Granted		18,290		10.52
Vested		(11,820)		12.69
Forfeited		-		-
Non-Vested Balance, December 31, 2013		18,290	$	10.52
Granted		13,040		10.61
Vested		(18,290)		10.52
Forfeited		-		-
Non-Vested Balance, December 31, 2014		13,040	$	10.61

Employee Deferred Stock Award Grants

Employee deferred stock awards are subject to forfeiture if an employee terminates prior to the vesting. Generally, the awards vest ratably over a four-year period and compensation costs are recognized over the vesting period. Compensation costs are recorded in “Salaries and benefits” on the Consolidated Statements of Operations.

A summary of the changes in employee deferred stock award grants as of December 31, 2014, is as follows:

			Weighted
			Average
	Deferred		Fair Value
	Stock		Per Share
Non-Vested Balance, December 31, 2012		20,500	$	9.84
Granted		2,000		10.10
Vested		(4,375)		9.84
Forfeited		(2,000)		9.84
Non-Vested Balance, December 31, 2013		16,125	$	9.87
Granted		23,000		10.46
Vested		(4,375)		9.84
Forfeited		-		-
Non-Vested Balance, December 31, 2014		34,750	$	10.27

At December 31, 2014, there was approximately $365,000 of total unrecognized stock-based compensation expense related to unvested restricted stock and deferred stock awards the Company expects to recognize over a weighted-average period of 2.2 years.

Stock Appreciation Rights (“SARs”)

As part of the Cooperative Marketing Agreement discussed in Note 13, on June 14, 2012, the Company signed a Stock Appreciation Rights Agreement (the “SAR Agreement”) and issued SARs to non-employees.  The SAR Agreement granted rights to non-employees to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014,  49,500 rights had vested.  The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  SARs have no effect on dilutive shares or shares outstanding as any appreciation of the Company’s common stock value over the grant price is paid in cash and not in common stock.  The SAR Agreement and all rights granted expire on December 31, 2022.  

The fair value of SARs is revalued (mark-to-market) each reporting period using the Black-Scholes valuation model based on the Company’s period-end stock price.  The expected term of the SARs granted is based on the contractual term.  Expected volatility is based on the historical volatility of the Company’s stock for the length of time corresponding to the expected term of the SARs.  The expected dividend yield is based on the Company’s anticipated dividend payments.  The risk-free interest rate is based on the U.S. treasury yield curve in effect as of the reporting date for the length of time corresponding to the expected term of the SARs.   

The following weighted-average assumptions were used in calculating the fair value of SARs granted during the years ended December 31, 2014 and 2013, using the Black-Scholes valuation model:  

	2014		2013
Expected dividend yield	0.00	%	0.00	%
Expected weighted-average volatility	52.8	%	49.5	%
Risk-free interest rate	2.04	%	2.84	%
Expected term of SARs (in years)	8.00		9.00

There were no exercises during the years ended December 31, 2014 or 2013.  The total liability of the SARs at December 31, 2014 was $499,734. 

Changes to the Company’s non-vested SARs during the years ended December 31, 2014 and 2013, are as follows:  

	SARs		Weighted Average Fair Value
Non-vested SARs at December 31, 2012		148,500	$	5.24
Granted		-		-
Vested		(16,500)		5.03
Cancellations		-		-
Non-vested SARs at December 31, 2013		132,000	$	5.41
Granted		-		-
Vested		(16,500)		4.50
Cancellations		-		-
Non-vested SARs at December 31, 2014		115,500	$	4.50

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes [Abstract]

Reconciliation Of Effective Tax Rate

	2014		2013
Federal tax expense at statutory rates	$	1,394,793	$	587,367
Nondeductible lobbying expense		29,518		29,115
State expense, net of federal impact		280,263		128,146
Stock option expense		(364)		12,465
Other		(13,033)		(37,312)
	$	1,691,177	$	719,781

Income Tax Expense (Benefit)

	2014		2013
Current
Federal	$	1,070,360	$	179
State		307,117		156,002
		1,377,477		156,181
Deferred, primarily Federal		313,700		563,600
	$	1,691,177	$	719,781

Deferred Tax Assets And Liabilities

	2014		2013
Deferred tax assets
Vacation accrual	$	73,300	$	68,400
Player rewards program accrual		202,100		269,600
Stock options and stock appreciation rights		404,300		339,300
Total deferred tax assets	$	679,700	$	677,300
Deferred tax liabilities
Tax depreciation greater than book depreciation	$	(2,254,200)	$	(1,961,400)
Deferred gain on sale of land		(104,000)		(104,000)
Other		(28,000)		(4,700)
Total deferred tax liabilities	$	(2,386,200)	$	(2,070,100)

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Cooperative Marketing Agreement

12 Months Ended

Dec. 31, 2014

Cooperative Marketing Agreement [Abstract]

Cooperative Marketing Agreement

13. COOPERATIVE MARKETING AGREEMENT 

On June 4, 2012, the Company entered into the CMA with the SMSC.  The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s horse industry.  Under the CMA, this is achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA.  Such payments have no direct impact on the Company’s consolidated financial statements or operations.

Under the terms of the CMA, the SMSC paid the horsemen $5.8 million and $5.3 million for purse enhancements for the years ended December 31, 2014 and 2013, respectively. 

Under the CMA, 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.  Under the CMA, the SMSC paid the Company $660,000 and $600,000 for marketing purposes for the years ended December 31, 2014 and 2013, respectively. 

Effective January 2015, the CMA was amended to adjust the payment amounts between the “Purse Enhancement Payments to Horsemen” and “Marketing Payments to Canterbury Park.”  Under the CMA as amended, SMSC agreed to make the following purse enhancement and marketing payments for 2015 through 2022:     

Year	Purse Enhancement Payments to Horsemen		1	Marketing Payments to Canterbury Park
2015	$	6,316,200		$	943,800
2016		6,947,820			1,038,180
2017		7,642,602			1,141,998
2018		7,830,000			1,170,000
2019		7,830,000			1,170,000
2020		7,830,000			1,170,000
2021		7,830,000			1,170,000
2022		7,830,000			1,170,000
1  - Includes $100,000 each year to various horsemen associations

 The amounts earned from the marketing payments are recorded as a component of other revenue and the related expenses are recorded as a component of advertising and marketing expense and depreciation in the Company’s consolidated statements of operations.  For the year ended December 31, 2014, the Company recorded $824,842 in other revenue and incurred $608,309 in advertising and marketing expense and $216,533 in depreciation related to the SMSC marketing payment.  For the year ended December 31, 2013, the Company recorded $595,628 in other revenue and incurred $490,072 in advertising and marketing expense and $105,556 in depreciation related to the SMSC marketing payment.  The excess of amounts received over revenue is reflected as deferred revenue which is included in accounts payable on the consolidated balance sheets.

Under the CMA, the Company agreed 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.

As part of the CMA and pursuant to a related SAR Agreement dated June 14, 2012, the Company issued stock appreciation rights to the SMSC.  The SAR Agreement granted rights to the SMSC to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share, a price agreed upon by the two parties.  Each right represents the right to be paid the appreciation in the value of one share of stock above $14.30.  Ten percent of the rights (16,500 rights) vested immediately and the remaining rights vest at the rate of 16,500 per year beginning in January 2013.  As of December 31, 2014, 49,500 rights had vested.   The SAR Agreement provides for the cash payment of the excess of the fair market value of Canterbury Park Holding Corporation’s common stock price on the date of exercise over the grant price.  The SAR Agreement and all rights granted expire on December 31, 2022.  The liability related to these stock appreciation rights is recorded as a long-term liability and the Company recognizes the income or expense related to the fluctuation in the value of the stock appreciation rights against the revenues recorded relating to the marketing payment due to the nature of the CMA.  Any excess expenses will be recognized as a component of other operating expenses. For the year ended December 31, 2014, the Company recognized $32,354 of expense related to these stock appreciation rights, of which $32,354 was recorded as an offset to other revenue.   For the year ended December 31, 2013, the Company recognized $227,592 of expense related to these stock appreciation rights, of which $227,592 was recorded as an offset to other revenue.  In the future, changes in the fair value of these stock appreciation rights will increase or decrease the stock appreciation rights liability, and the Company will recognize an additional offset to other revenue and/or other operating expenses related to these changes.

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Contingencies

12 Months Ended

Dec. 31, 2014

Contingencies [Abstract]

Contingencies

9.CONTINGENCIES

Canterbury Park Holding Corporation was incorporated on March 24, 1994.  On March 29, 1994, the Company acquired all the outstanding securities of Jacobs Realty, Inc. (“JRI”) from Irwin Jacobs and IMR Fund, L.P. (an investment fund for various pension plans and trusts).  JRI was merged into the Company, and the acquisition was accounted for under the purchase method of accounting whereby the acquired assets and liabilities have been recorded at the Company’s cost.  The primary asset of JRI was Canterbury Downs Racetrack and the 325 acres of surrounding land.

On May 20, 1994, the Company adopted a plan of Reorganization pursuant to which the sole shareholder of Canterbury Park Concessions, Inc. (“CPC”), and majority shareholder of the Company, agreed to exchange his shares of CPC stock for 198,888 shares of the Company’s common stock concurrent with the closing of a public offering.  Pursuant to the Plan of Reorganization, CPC became a wholly-owned subsidiary of the Company in August 1994 when the Company completed the initial public offering of its common stock.  This reorganization was treated in a manner similar to a pooling of interests.  Net proceeds received by the Company from the public offering were approximately $4,847,000, which along with additional borrowings under the Company’s line of credit with the majority shareholder, were used to pay off the remaining notes payable from the acquisition of JRI.

In connection with the purchase of the Racetrack, the Company entered into an Earn Out Promissory Note dated March 29, 1994.  In accordance with the Earn Out Note, if (i) off-track betting becomes legally permissible in the State of Minnesota and (ii) the Company begins to conduct off-track betting with respect to or in connection with its operations, the Company will be required to pay to the IMR Fund, L.P. the greater of $700,000 per operating year, as defined, or 20% of the net pretax profit, as defined for each of five operating years.  At this time, management believes that the likelihood that these two conditions will be met and that the Company will be required to pay these amounts is remote.  At the date (if any) that these two conditions are met, the five minimum payments will be discounted back to their present value and the sum of those discounted payments will be capitalized as part of the purchase price in accordance with generally accepted accounting principles.  The purchase price will be further increased if payments become due under the “20% of Net Pretax Profit” calculation.  The first payment is to be made 90 days after the end of the third operating year in which off-track betting is conducted by the Company.  Remaining payments would be made within 90 days of the end of each of the next four operating years.

Additionally, the Company entered into Cooperative Marketing Agreement (the “CMA”) with the Shakopee Mdewakanton Sioux Community (“SMSC”) which became effective on June 15, 2012 and amended in January 2015.  The CMA contains certain covenants which, if breached, would trigger an obligation to repay a specified amount related to such covenant.  At this time, management believes that the likelihood that the breach of a covenant will occur and that the Company will be required to pay the specified amount related to such covenant is remote. 

In August 2012, NMHI initiated litigation against the MHBPA and the Company seeking to be relieved of its obligations to supplement purses at Canterbury Park under its Purse Supplement Agreement with the MHBPA.  The Company believed the theories asserted by NMHI in its complaint against them were without merit, and the Company and the MHBPA brought motions to dismiss NMHI’s lawsuit.  In addition, both the Company and the MHBPA moved for an order compelling arbitration of the claims in NMHI’s lawsuit, which is the only remedy permitted by the terms of the Purse Supplement Agreement. On May 2, 2013, the Fourth Judicial District Court ordered that NMHI’s claims against the Company be dismissed with prejudice. 

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 December 31, 2014 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.

The Company has committed to payment of statutory distributions under a $500,000 bond issued to the Minnesota Racing Commission as required by Minnesota statute. The Company was not required to make any payments related to this bond in 2014 or 2013, and there is no liability related to this bond on the balance sheet as of December 31, 2014.

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General Credit Agreement

12 Months Ended

Dec. 31, 2014

General Credit Agreement [Abstract]

General Credit Agreement

7.GENERAL CREDIT AGREEMENT

The Company has a general credit and security agreement with Bremer Bank, which provides a revolving credit line of up to $3,000,000 and expires May 4, 2015.  The Company had no borrowings under the credit line during the years ended December 31, 2014 or 2013.  The credit agreement contains certain covenants requiring the Company to maintain certain financial ratios.  The Company was in compliance with these requirements as of December 31, 2014. 

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Operating Leases And Commitments

12 Months Ended

Dec. 31, 2014

Operating Leases And Commitments [Abstract]

Operating Leases And Commitments

8.OPERATING LEASES AND COMMITMENTS

Purchase Obligations

In March 2014, the Company entered into a seven-year agreement for with a new totalizator provider. Pursuant to the agreement, the vendor provides totalizator equipment and related software which records and processes all wagers and calculates odds and payoffs. The amounts charged to operations for totalizator expenses for the years ended December 31, 2014 and 2013 were $226,000 and $225,000, respectively.

Operating Lease Obligations

The Company has entered into operating leases for rental of office equipment and for track equipment to maintain the Racetrack. Amounts charged to operations under these agreements for the years ended December 31, 2014 and 2013 were $140,000 and $130,000, respectively. All such leases expire in or before February 2018.

Future minimum operating lease payments and purchase obligations are as follows:

	Payment due by period
	Total Amount
Obligations	Committed		2015		2016		2017		2018		2019		Thereafter
Operating leases	$	108,300	$	49,400	$	29,200	$	27,300	$	2,400	$	-	$	-
Purchases	$	1,376,000	$	224,000	$	226,000	$	228,000	$	230,000	$	233,000	$	235,000

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Related-Party Transactions

12 Months Ended

Dec. 31, 2014

Related-Party Transactions [Abstract]

Related-Party Transactions

10.RELATED-PARTY TRANSACTIONS

The Company paid a combined total of $40,000 in2013 to the Chairman and Vice Chairman of the Company as further director compensation for their additional responsibilities as described in consulting agreements with each individual. 

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Income Taxes (Deferred Tax Assets And Liabilities) (Details) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Abstract]
Vacation accrual	$ 73,300	$ 68,400
Player rewards program accrual	202,100	269,600
Stock options and stock appreciation rights	404,300	339,300
Total deferred tax assets	679,700	677,300
Tax depreciation greater than book depreciation	(2,254,200)	(1,961,400)
Deferred gain on sale of land	(104,000)	(104,000)
Other	(28,000)	(4,700)
Total deferred tax liabilities	$ (2,386,200)	$ (2,070,100)

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Operating Segments (Schedule Of The Company's Operating Segments) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Net revenues	$ 10,263,711	$ 15,046,958	$ 13,784,714	$ 9,374,454	$ 10,036,460	$ 14,274,459	$ 13,280,950	$ 9,144,568	$ 48,469,837	$ 46,736,437
Net interest income									2,000	3,000
Depreciation									2,137,778	1,861,702
Segment (loss) income before income taxes									5,823,000	3,040,000
Assets	39,495,679				37,112,632				39,495,679	37,112,632
Intersegment [Member]
Segment Reporting Information [Line Items]
Net revenues									2,001,000	2,134,000
Horse Racing [Member]
Segment Reporting Information [Line Items]
Net revenues									14,460,000	14,704,000
Net interest income									2,000	3,000
Depreciation									1,601,000	1,198,000
Segment (loss) income before income taxes									(433,000)	(2,138,000)
Horse Racing [Member] | Intersegment [Member]
Segment Reporting Information [Line Items]
Net revenues									620,000	635,000
Card Casino [Member]
Segment Reporting Information [Line Items]
Net revenues									27,030,000	25,545,000
Depreciation									422,000	540,000
Segment (loss) income before income taxes									5,238,000	4,654,000
Concessions [Member]
Segment Reporting Information [Line Items]
Net revenues									6,980,000	6,487,000
Depreciation									115,000	124,000
Segment (loss) income before income taxes									1,018,000	524,000
Concessions [Member] | Intersegment [Member]
Segment Reporting Information [Line Items]
Net revenues									1,381,000	1,499,000
Reportable Segment [Member]
Segment Reporting Information [Line Items]
Net revenues									50,471,000	48,870,000
Assets	54,418,000				50,355,000				54,418,000	50,355,000
Reportable Segment [Member] | Horse Racing [Member]
Segment Reporting Information [Line Items]
Assets	37,606,000				34,870,000				37,606,000	34,870,000
Reportable Segment [Member] | Card Casino [Member]
Segment Reporting Information [Line Items]
Assets	1,217,000				1,640,000				1,217,000	1,640,000
Reportable Segment [Member] | Concessions [Member]
Segment Reporting Information [Line Items]
Assets	$ 15,595,000				$ 13,845,000				$ 15,595,000	$ 13,845,000

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Summary Of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2014

Summary Of Significant Accounting Policies [Abstract]

Business

Business – Canterbury Park Holding Corporation (the “Company”) was incorporated on March 24, 1994 and conducts pari-mutuel wagering operations and hosts “unbanked” card games at its Canterbury Park Racetrack and Card Casino facility (the “Racetrack”) in Shakopee, Minnesota.

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 until 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 Card Casino at the Racetrack.  The Card Casino operates 24 hours a day, seven days a week.  The Card 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.

The consolidated financial statements include the accounts of the Company, Canterbury Park Concessions, Inc. (CPC), and Shakopee Valley RV Park Acquisition Company, LLC after elimination of intercompany accounts and transactions.

Revenue Recognition

Revenue Recognition – The Company’s revenues are derived primarily from the operations of a Card Casino, pari-mutuel wagering on simulcast and live horse races, concession sales, and related activities.  Collection revenue from Card Casino operations, a set percentage of wagers, is recognized at the time that the wagering process is complete.  Pari-mutuel revenues are 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.  Revenues related to concession and publication sales and parking and admission fees are recognized as revenue when the service has been performed or the product has been delivered.  All sales taxes are presented on a net basis and are excluded from revenue.

Estimates

Estimates – The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from these estimates. 

Cash and Cash Equivalents

Cash and Cash Equivalents – Cash and cash equivalents include all investments with original maturities of three months or less or which are readily convertible into known amounts of cash and are not legally restricted.  The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. 

Restricted Cash

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. 

Short-Term Investments

Short-term Investments – Securities are classified as held to maturity when the Company has the positive intent and ability to hold them to maturity, and are measured at amortized cost.  At December 31, 2014 and 2013, all investments were classified as held-to-maturity.  The Company continually reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary.  If the decline in fair value is judged to be other than temporary, the cost basis of the security is written down to fair value and the amount of the write-down is included in earnings.  Short-term investments consist of certificates of deposit at December 31, 2014 and 2013.  Amortized cost approximated fair value for both periods. 

Accounts Receivable

Accounts Receivable – Accounts receivable are initially recorded for amounts due from other tracks for simulcast revenue, net of amounts due to other tracks, and for amounts due from customers related to special events.  Credit is granted in the normal course of business without collateral.  Accounts receivable are stated net of allowances for doubtful accounts, which represent estimated losses resulting from the inability of customers to make the required payments.  Accounts that are outstanding longer than the contractual terms are considered past due.  When determining the allowances for doubtful accounts, the Company takes several factors into consideration including the overall composition of the accounts receivable aging, its prior history of accounts receivable write-offs, the type of customers and its day-to-day knowledge of specific customers.  The Company writes off accounts receivable when they become uncollectible.  Changes in the allowances for doubtful accounts are recorded as bad debt expense and are included in other operating expenses in the Company’s consolidated statements of operations.

Inventory

Inventory – Inventory consists primarily of food and beverages, small wares and supplies and retail goods and is recorded at the lower of cost (first-in, first-out) or market. 

Unredeemed Pari-Mutuel Tickets

Unredeemed Pari-mutuel Tickets – The Company records a liability for winning tickets and vouchers upon the completion of a race and when a voucher is printed, respectively.  As uncashed winning tickets and vouchers are redeemed, this liability is reduced for the respective cash payment.  The Company recognizes revenue associated with the uncashed winning tickets and vouchers when the likelihood of redemption, based on historical experience, is remote.  While the Company continues to honor all winning tickets and vouchers presented for payment, management may determine the likelihood of redemption to be remote due to the length of time that has elapsed since the ticket was issued.  In these circumstances, if management also determines there is no requirement for remitting balances to government agencies under unclaimed property laws, uncashed winning tickets and vouchers may then be recognized as revenue in the Company’s consolidated statements of operations. 

During 2013, the Company reevaluated the likelihood of redemption relating to outstanding vouchers and through this assessment, the Company decreased the projected redemption rate.  The Company has determined that this adjustment to the likelihood of redemption relating to vouchers is a change in accounting estimate and has accounted for the change prospectively; i.e. the accounting change impacts interim reporting periods within fiscal year 2013 and future periods.  For the year ended December 31, 2013, the change in accounting estimate decreased the Company’s liability for outstanding pari-mutuel vouchers and increased pari-mutuel revenue in its consolidated statements of operations for the period by approximately $412,286 (pre-tax difference), increasing income from operations by this amount as well.  Net income increased approximately $239,150 (after taking income taxes into account), or by approximately $0.06 net income per basic and diluted common share. 

Promotional Allowances

Promotional Allowances – The Company offers certain promotional allowances at no charge to patrons who participate in its player rewards program.  The retail value of these promotional items is shown as a deduction from total revenues on the Company’s consolidated statements of operations.

Due to Minnesota Horsemen's Benevolent and Protective Association, Inc. ("MHBPA")

Due to Minnesota Horsemen’s Benevolent and Protective Association, Inc. (“MHBPA”) – The Minnesota Pari-mutuel Horse Racing Act specifies that the Company is required to segregate a portion of funds (recorded as purse expense in the statements of operations), received from Card 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’ associations.  Pursuant to an agreement with the MHBPA, the Company transferred into a trust account or paid directly to the MHBPA, approximately $5,850,000 and $6,325,000 for the years ended December 31, 2014 and 2013, respectively, related to thoroughbred races.  Minnesota Statutes specify that amounts transferred into the trust account are the property of the trust and not of the Company.   

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets – Management of the Company periodically reviews the carrying value of property and equipment for potential impairment by comparing the carrying value of these assets with their related expected undiscounted future net cash flows.  Should the sum of the related expected future net cash flows be less than the carrying value, management will determine whether an impairment loss should be recognized.  An impairment loss would be measured by the amount by which the carrying value of the asset exceeds the fair value of the asset.  Management has determined that no impairment of these assets exists at December 31, 2014. 

Advertising and Marketing

Advertising and Marketing – Advertising and marketing costs are charged to expense as incurred.  The related amounts are presented separately in the Company’s consolidated statements of operations.

Land, Buildings, and Equipment

Land, Buildings, and Equipment – Land, buildings, equipment, and building improvements are capitalized at a level of $1,000 or greater and are recorded at cost.  Repair and maintenance costs are charged to operations when incurred.  Furniture, fixtures, and equipment are depreciated using the straight-line method over estimated useful lives ranging from 5 – 7 years, while buildings are depreciated over 15 – 39 years.  Building improvements are amortized using the straight-line method over the useful life of the assets.   

Card Casino Accruals

Card Casino Accruals – Minnesota law allows the Company to collect amounts from patrons to fund progressive jackpot pools in the Card Casino.  These amounts, along with amounts earned by the player pool, promotional pools, and the outstanding chip liability, are accrued as short-term liabilities at each balance sheet date.

Income Taxes

Income Taxes – Income taxes are accounted for under the asset and liability method.  Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to reverse.

The Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Interest and penalties associated with uncertain income tax positions are presented in income tax expense.  For the years ended December 31, 2014 and 2013, the Company did not recognize any expense related to interest and penalties. 

Net Income Per Share

Net Income Per Share – Basic net income per common share is based on the weighted average number of common shares outstanding during each year.  Diluted net income per common share takes into effect the dilutive effect of potential common shares outstanding.  The Company’s only potential common shares outstanding are stock options.

Fair Values of Financial Instruments

FairValues of Financial Instruments – Due to the current classification of all financial instruments of the Company and given the short-term nature of the related account balances, carrying amounts reported in the consolidated balance sheets approximate fair value.

Stock-Based Employee Compensation

Stock-Based Employee Compensation – The Company accounts for share-based compensation awards on a fair value basis. The estimated grant date fair value of each stock-based award is recognized as expense over the requisite service period (generally the vesting period).  The estimated fair value of each option is calculated using the Black-Scholes option-pricing model. For more information on the Company’s stock-based compensation plans, see Note 5.

Recent Accounting Pronouncement

Recent Accounting Pronouncement – In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which explicitly requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. Management will be required to assess, in each interim and annual period, if there is substantial doubt of an entity's ability to continue as a going concern as evidenced by relevant known or knowable conditions including an entity's ability to meet its future obligations. Management will be required to provide disclosures regardless of whether substantial doubt is alleviated by management's plans. The guidance will become effective for annual fiscal periods ending after December 15, 2016.

In May, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 is a new comprehensive standard for revenue recognition that is based on the core principle that revenue be recognized in a manner that depicts the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures relating to the nature, amount, timing, and uncertainty of revenues and cash flows arising from contracts with customers. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is prohibited. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is evaluating the impact of the amended revenue recognition guidance on the Company’s consolidated financial statements but does not believe it will have a significant impact.

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Operating Leases And Commitments (Tables)

12 Months Ended

Dec. 31, 2014

Operating Leases And Commitments [Abstract]

Schedule Of Future Minimum Operating Lease Payments And Purchase Obligations

	Payment due by period
	Total Amount
Obligations	Committed		2015		2016		2017		2018		2019		Thereafter
Operating leases	$	108,300	$	49,400	$	29,200	$	27,300	$	2,400	$	-	$	-
Purchases	$	1,376,000	$	224,000	$	226,000	$	228,000	$	230,000	$	233,000	$	235,000

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Related-Party Transactions (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Related-Party Transactions [Abstract]
Amounts paid to related parties	$ 40,000

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Stock-Based Compensation (Stock Appreciation Rights Valuation Assumptions) (Details) (Stock Appreciation Rights (SARs) [Member])	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Stock Appreciation Rights (SARs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	0.00%	0.00%
Expected weighted-average volatility	52.80%	49.50%
Risk-free interest rate	2.04%	2.84%
Expected term of SARs (in years)	8 years	9 years

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Consolidated Statements Of Changes In Stockholders' Equity (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2012	$ 41,477	$ 16,903,245	$ 9,940,216	$ 26,884,938
Balance, shares at Dec. 31, 2012	4,147,743
Exercise of stock options	55	39,300		39,355
Exercise of stock options, shares	5,515
Stock-based compensation		270,074		270,074
Tax (expense) benefit from exercise of stock-based awards		(1,893)		(1,893)
Common stock repurchases	(8)	(3,228)	(4,273)	(7,509)
Common stock repurchases, shares	(809)
Issuance of restricted stock	183	(183)
Issuance of restricted stock, shares	18,290
Shares issued under Employee Stock Purchase Plan	72	63,300		63,372
Shares issued under Employee Stock Purchase Plan, shares	7,212
Net income			1,016,712	1,016,712
Balance at Dec. 31, 2013	41,779	17,270,615	10,952,655	28,265,049
Balance, shares at Dec. 31, 2013	4,177,951
Exercise of stock options	20	13,120		13,140
Exercise of stock options, shares	2,000
Stock-based compensation		217,094		217,094
Tax (expense) benefit from exercise of stock-based awards		7,895		7,895
Issuance of restricted stock	130	(130)
Issuance of restricted stock, shares	13,040
Shares issued under Employee Stock Purchase Plan	84	80,755		80,839
Shares issued under Employee Stock Purchase Plan, shares	8,380
Net income			2,411,155	2,411,155
Balance at Dec. 31, 2014	$ 42,013	$ 17,589,349	$ 13,363,810	$ 30,995,172
Balance, shares at Dec. 31, 2014	4,201,371

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Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity [Abstract]

Stockholders' Equity

4.STOCKHOLDERS’ EQUITY

Employee Stock Purchase Plan:

The Company offers an Employee Stock Purchase Plan (the “ESPP”) that is open to all employees working more than 15 hours per week.  Shares of the Company’s common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees purchased 8,380 and 7,212 shares in 2014 and 2013, respectively.  As of December 31, 2014, a total of 268,331 shares have been issued since inception out of the 350,000 shares authorized. 

KSOP:

During the first quarter of 2013, the Company’s Board of Directors approved an action to combine theEmployee Stock Ownership Plan (the “ESOP”) with the 401(k) Plan to create a KSOP Plan (the “KSOP”).  The KSOP allows the Company to use Company stock to match contributions from its employees should it so choose.  This combination became effective on July 15, 2013.  The KSOP is available to eligible employees who had completed six months of service.  There was no match of Company stock to the KSOP in 2014or2013.Employer contributions charged to operations for the years ended December 31, 2014 and 2013 were$154,000 and $134,000, respectively, for cash matching of employee contributions.

Stock Repurchase Plan:

On August 24, 2012, the Company announced that its Board of Directors had authorized the repurchase of up to 100,000 shares of the Company’s common stock.  During 2013, the Company repurchased 809 shares of common stock at an average price of $9.28 for an aggregate purchase price of $7,509.  No shares were repurchased in 2014.

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Insurance Recoveries (Details) (USD $)	12 Months Ended
	Dec. 31, 2014
Insurance Recoveries [Abstract]
Total insurance proceeds	$ 988,000
Insurance recoveries gain	$ 957,597

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Operating Segments (Tables)

12 Months Ended

Dec. 31, 2014

Operating Segments [Abstract]

Schedule Of The Company's Operating Segments

	Year Ended December 31, 2014
	Horse Racing		Card Casino		Concessions		Total
Net revenues from external customers	$	14,460	$	27,030	$	6,980	$	48,470
Intersegment revenues		620		-		1,381		2,001
Net interest income		2		-		-		2
Depreciation		1,601		422		115		2,138
Segment (loss) income before income taxes		(433)		5,238		1,018		5,823
	At December 31, 2014
Segment Assets	$	37,606	$	1,217	$	15,595	$	54,418

	Year Ended December 31, 2013
	Horse Racing		Card Casino		Concessions		Total
Net revenues from external customers	$	14,704	$	25,545	$	6,487	$	46,736
Intersegment revenues		635		-		1,499		2,134
Net interest income		3		-		-		3
Depreciation		1,198		540		124		1,862
Segment (loss) income before income taxes		(2,138)		4,654		524		3,040
	At December 31, 2013
Segment Assets	$	34,870	$	1,640	$	13,845	$	50,355

Reconciliation Of Revenues

	2014		2013
Revenues
Total net revenue for reportable segments	$	50,471	$	48,870
Elimination of intersegment revenues		(2,001)		(2,134)
Total consolidated net revenues	$	48,470	$	46,736

Reconciliation Of Income Before Income Taxes

Income before income taxes
Total segment income before income taxes	$	5,823	$	3,040
Elimination of intersegment income before income taxes		(1,721)		(1,304)
Total consolidated income before income taxes	$	4,102	$	1,736

Reconciliation Of Assets

	December 31,		December 31,
	2014		2013
Assets
Total assets for reportable segments	$	54,418	$	50,355
Elimination of intercompany receivables		(14,922)		(13,242)
Total consolidated assets	$	39,496	$	37,113

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Stock-Based Compensation (Stock Options By Exercise Price Range) (Details) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding	255,252	271,752	292,267
Weighted Average Remaining Contractual Life in Years	3 years 10 months 24 days
Weighted Average Exercise Price	$ 9.63	$ 9.99	$ 10.13
Options Outstanding, Aggregate Intrinsic Value	$ 411,840
Options Exercisable	255,252
Weighted Average Exercise Price	$ 9.63	$ 9.99
Options Exercisable, Aggregate Intrinsic Value	411,840
$6.00 - 7.05 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 6.00
Exercise Price Range, Upper Range Limit	$ 7.05
Options Outstanding	88,002
Weighted Average Remaining Contractual Life in Years	4 years 4 months 24 days
Weighted Average Exercise Price	$ 6.23
Options Outstanding, Aggregate Intrinsic Value	119,962
Options Exercisable	88,002
Weighted Average Exercise Price	$ 6.23
Options Exercisable, Aggregate Intrinsic Value	119,962
$8.28 - 9.15 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 8.28
Exercise Price Range, Upper Range Limit	$ 9.15
Options Outstanding	77,250
Weighted Average Remaining Contractual Life in Years	5 years 2 months 12 days
Weighted Average Exercise Price	$ 8.34
Options Outstanding, Aggregate Intrinsic Value	291,878
Options Exercisable	77,250
Weighted Average Exercise Price	$ 8.34
Options Exercisable, Aggregate Intrinsic Value	$ 291,878
$11.35 - 14.55 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 11.35
Exercise Price Range, Upper Range Limit	$ 14.55
Options Outstanding	75,000
Weighted Average Remaining Contractual Life in Years	2 years 8 months 12 days
Weighted Average Exercise Price	$ 13.45
Options Exercisable	75,000
Weighted Average Exercise Price	$ 13.45
$16.68 - 17.25 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price Range, Lower Range Limit	$ 16.68
Exercise Price Range, Upper Range Limit	$ 17.25
Options Outstanding	15,000
Weighted Average Remaining Contractual Life in Years	1 month 6 days
Weighted Average Exercise Price	$ 17.10
Options Exercisable	15,000
Weighted Average Exercise Price	$ 17.10

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Insurance Recoveries

12 Months Ended

Dec. 31, 2014

Insurance Recoveries [Abstract]

Insurance Recoveries

14.INSURANCE RECOVERIES

During 2014, the Company incurred damage to buildings from multiple severe storms at the Racetrack and received $988,000 in total insurance proceeds. As of December 31, 2014, the Company recognized a $958,000 insurance recoveries gain in the Consolidated Statements of Operations as “Gain on insurance recoveries”.  The storms did not cause any material interruptions to the business or impact on the Company’s consolidated financial results of operations. Based on future events, the Company may receive additional insurance proceeds.  The Company has concluded that these additional funds represent contingent gains and have not, in accordance with U.S. GAAP, accounted for them in the Company’s 2014 consolidated financial statements.