Canterbury Park Holding (CPHC) risk factors, FY2024 10-K

Other

1. 01We may not be successful at implementing our growth strategy
2. 02In 2023, we developed a five-year strategic plan focused on growing Casino revenue. As part of our execution on the five-year strategic plan, we are actively evaluating new opportunities that would diversify and grow our business, including through potential strategic transactions and initiatives
3. 03Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside of our control
4. 04We have experienced a decrease in revenue and profitability from live racing
5. 05We may not be able to attract a sufficient number of horses and trainers to achieve above average field sizes
6. 06We face significant competition, both directly from other racing and gaming operations and indirectly from other forms of entertainment and leisure time activities, which could have a material adverse effect on our operations
7. 07We also compete with tribal-owned casinos. These tribal facilities have the advantage of being exempt from some state and federal taxes and state regulation of indoor smoking, and have the ability to offer a wider variety of gaming products
8. 08Nationally, the popularity of horse racing has declined
9. 09A lack of confidence in the integrity of our core businesses could affect our ability to retain our customers and engage with new customers
10. 10Horse racing is an inherently dangerous sport and our racetrack is subject to personal injury litigation
11. 11Our business depends on using totalizator services
12. 12Inclement weather and other conditions may affect our ability to conduct live racing

Risks Related to Government Regulation of our Horse Racing and Gaming Generally

1. 13We 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
2. 14We are subject to extensive regulation from gaming authorities that could adversely affect us

Risks Related to our Real Estate Development Efforts

1. 15We rely on the efforts of our partner Doran for the development and profitable operation of our Triple Crown Residences at Canterbury Park joint venture
2. 16We rely on the efforts of our partner Greystone Construction for a development project
3. 17We may not be successful in executing our real estate development strategy
4. 18We are obligated to make improvements in the TIF district and will be reimbursed only to the extent of future tax revenue
5. 19We face competition from other real estate developers
6. 20We may be adversely affected by the effects of inflation
7. 21Our success may be affected if we are not able to attract, develop, and retain qualified personnel
8. 22The payment and amount of future dividends is subject to Board of Director discretion and to various risks and uncertainties
9. 23Our information technology and other systems are subject to cybersecurity risk including misappropriation of customer information or other information security incidents
10. 24We 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
11. 25While we maintain insurance coverage specific to cyber-insurance matters, any failure on our part to maintain adequate safeguards may subject us to significant liabilities
12. 26Provisions of Minnesota law, our articles of incorporation, our bylaws and other agreements may deter a change of control of our company and may have a possible negative effect on our stock price