<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

                   For the fiscal year ended December 31, 1999

                                       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: 0-24554

                       CANTERBURY PARK HOLDING CORPORATION
--------------------------------------------------------------------------------
                 (Name of small business issuer in its charter)

                 Minnesota                             41-1775532
       ----------------------------------     ----------------------------------
       (State or other jurisdiction                 (I.R.S. Employer
        of incorporation or organization)           Identification No.)

                              1100 Canterbury Road
                               Shakopee, MN 55379
                           ---------------------------
              (Address of principal executive offices and zip code)

       Registrant's telephone number, including area code: (612) 445-7223

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock,
                                                            $.01 par value

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       X                NO
                              --------                   --------

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B in this form, and no disclosure will 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-KSB or any amendment to
this Form 10-KSB. |X|

The Company's operating revenues for its most recent fiscal year were
$20,330,508.

On March 13, 2000, the Company had 3,429,599 shares of common stock, $.01 par
value, outstanding.

The aggregate market value of the shares of voting stock held by non-affiliates
of the Company (persons other than directors and officers) computed at the
NASDAQ closing price of $7.375 per share on March 13, 2000 was approximately
$11,425,000.

                       DOCUMENTS INCORPORATED BY REFERENCE

The Company's Proxy Statement for its 2000 Annual Meeting of Shareholders, to be
held on June 1, 2000, is incorporated by reference into Part III of this Form
10-KSB.

                                       1
<PAGE>

                       CANTERBURY PARK HOLDING CORPORATION
                            FORM 10-KSB ANNUAL REPORT
                      FOR THE YEAR ENDED DECEMBER 31, 1999

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                             Page
                                                                                                             ----
                                     PART I
<S>                   <C>                                                                                    <C>
ITEM 1.               Description of Business...............................................................   3
ITEM 2.               Description of Property...............................................................  12
ITEM 3.               Legal Proceedings.....................................................................  13
ITEM 4.               Submission of Matters to a Vote of Security Holders...................................  13

                                     PART II

ITEM 5.               Market for Common Equity and Related Stockholder Matters..............................  14
ITEM 6.               Management's Discussion and Analysis of Financial Condition
                          and Results of Operations ........................................................  15
ITEM 7.               Financial Statements..................................................................  21
ITEM 8.               Changes In and Disagreements With Accountants on Accounting
                           and Financial Disclosure.........................................................  36

                                    PART III

ITEM 9.               Directors, Executive Officers, Promoters and Control Persons; Compliance
                           With Section 16(a) of the Exchange Act...........................................  36
ITEM 10.              Executive Compensation................................................................  36
ITEM 11.              Security Ownership of Certain Beneficial Owners and Management........................  36
ITEM 12.              Certain Relationships and Related Transactions........................................  36
ITEM 13.              Exhibits and Reports on Form 8-K......................................................  36

SIGNATURES .................................................................................................  37

EXHIBIT INDEX...............................................................................................  38
</TABLE>


                                       2
<PAGE>

Item 1.  DESCRIPTION OF BUSINESS

(a)      BUSINESS DEVELOPMENT

         Canterbury Park Holding Corporation (the "Company") is engaged in the
business of conducting live Thoroughbred and Quarter Horse racing and related
pari-mutuel wagering operations at its facilities in Shakopee, Minnesota (the
"Racetrack"), as well as in conducting "simulcasting", which is pari-mutuel
wagering on races held at out-of-state racetracks that are televised
simultaneously at the Racetrack. Commencing on or about April 19, 2000, the
Company will begin operating its Card Club (as defined below). The Company also
derives revenues from related services and activities, such as concessions,
parking, admissions and programs, and from other entertainment events held at
the Racetrack.

         The Company was incorporated under the laws of Minnesota on March 24,
1994 and on March 29, 1994 acquired the Racetrack. On May 6, 1994 the Company
commenced simulcasting operations. In August 1994 the Company conducted a public
offering. With the proceeds from the public offering the Company retired debt
associated with its acquisition of the Racetrack. Since May 6, 1994 the Company
has been principally engaged in conducting its year-round simulcasting
operations, five to seven days per week and live horse racing ("live meets") on
a seasonal basis, generally from mid May to late August.

         On May 25, 1999, legislation authorizing new gaming authority for the
Company became law. This legislation will allow the Racetrack to host unbanked
card games whereby players compete against each other and not against the house.
Under the new gaming authority, the Racetrack will receive a percentage of the
wagers or a fee from the players as its revenue for providing the facility and
services. The new law specifies that the Racetrack's purse fund and the State of
Minnesota Breeders' Fund will receive a total of 10% to 14% of the gross revenue
generated by the Canterbury Card Club (the "Card Club"). The Minnesota Racing
Commission is authorized by the legislation to regulate Card Club operations.
The operating plan was approved by the Minnesota Racing Commission on January
19, 2000. The Company anticipates that the Card Club will begin operation on or
about April 19, 2000.

         As of March 30, 2000 the 15,828 square foot Card Club is under
construction within the Canterbury Park grandstand facility. The construction
project is on schedule to be completed in mid-April 2000. The Company hired a
general manager for the Card Club operation in November 1999 and has hired
additional management and supervisory personnel for the Card Club since that
time. The Company has conducted an eight-week training school for card dealers
which commenced in late January, 2000. Expenditures related to the construction
of the Card Club and enhancements to the facility are expected to be
approximately $2 million. Expenditures related to the acquisition of furniture,
fixtures, equipment and supplies will be approximately $700,000. The Company
has received a commitment from Bremer Bank to provide term financing for
approximately 75% of the total estimated costs of construction and 50% of
furniture, fixture and equipment costs of the Card Club. The remainder will be
funded from internal cash flow. The Company anticipates that operating expenses
for the Card Club in the year 2000 will exceed revenues and generate operating
losses, due to pre-opening expenses including the development of the
comprehensive operating plan, recruiting and training of Card Club dealers and
other personnel, acquisition of assets, and development of security,
surveillance and other internal control systems required to safeguard Card Club
assets and the public.

(b)      BUSINESS OF ISSUER

(i)      RACING OPERATIONS

         The Company's racing operations consist of year-round pari-mutuel
wagering on simulcast horse races ("simulcasting") and live meets held on a
seasonal basis beginning in May and concluding in late August or early
September. Thoroughbred and Quarter Horse racing is conducted during the live
meet. The Company also conducted three-day live harness racing meets over the
1997 and 1998 Labor Day weekends.

                                       3

<PAGE>

         SIMULCASTING.

         Simulcasting is the process by which live horse races held at one
facility (the "host track") are transmitted simultaneously to other locations
that allow patrons at each receiving location (the "guest track") to place
wagers on the race being broadcast. Monies are collected at the guest track and
the information with respect to the total amount wagered is electronically
transmitted to the host track. In effect, all of the amounts wagered at the
guest track are combined into the appropriate pools at the host track with the
final odds and payouts determined based upon all the monies in the pools.

         The Company offers "full card" simulcast racing (broadcasting of
another racetrack's entire daily live racing program) from up to 20 racetracks
per day, seven days a week, 364 days per year, including Churchill Downs,
Hollywood Park, Santa Anita, Gulfstream Park, Belmont Park and Saratoga
Racecourse. In addition, races of national interest, such as the Kentucky Derby,
Preakness Stakes and 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 which is feasible
to offer at the Racetrack.

         Under applicable provisions of federal and state law, the Racetrack
must obtain the consent of the state's regulatory authority and the organization
which represents the majority or the owners and trainers of the horses which
race at the Racetrack with respect to simulcast operations both as a host and
guest track. In Minnesota such consent must be obtained from the Minnesota
Horsemen's Benevolent and Protective Association (the "MHBPA") and the Minnesota
Racing Commission.

         LIVE RACING.

         The Company conducts live horse racing at its facility from May until
late August or early September each year. The first year the Company conducted
live racing was 1995 when it hosted 55 days of live horse racing. The Company
conducted 55 days of live racing in 1998, consisting of a 24-day mixed meet of
Thoroughbred and Quarter Horse racing, and a 28-day Thoroughbred only meet, plus
three days of live harness racing over the Labor Day weekend. In 1999, the
Company conducted 56 days of live racing, including 26 days of mixed
Thoroughbred and Quarter Horse racing, and 30 days of Thoroughbred only horse
racing. The Company plans a 59-day live race meet in the year 2000 beginning May
20th and ending September 4th, consisting of 30 days of mixed Thoroughbred and
Quarter Horse racing and 29 days of Thoroughbred only racing.

         Currently, Minnesota law requires the Racetrack to schedule a minimum
of 125 days of live racing annually, unless the MHBPA agrees to a lesser number
of live racing days. The MHBPA has agreed to waive the 125-day requirement for
years 1995 through 2000 and allow the Company to run a minimum of 50 days of
live racing each year. After 2000, no assurance can be given that the MHBPA
will agree to a shorter live meet than the 125-day statutory minimum.

(ii)     SPECIAL EVENTS

         While pari-mutuel horse racing is the Company's principal business, the
Company's facilities are capable of being used for multiple purposes. In an
effort to more fully utilize the property and to generate additional revenues,
the Company has, in each year of its operations, expanded the use of the
grandstand, grounds and parking lot for special events and rentals.

         From 1996 through 1999, a number of non-horseracing events were held,
including snowmobile races, two major arts and crafts shows per year, trade
shows, concerts, motorcycle races, fund raisers, automobile shows and
competitions and private parties. Lilith Fair, an outdoor music event, came to
Canterbury Park in August for three consecutive years: 1997, 1998 and 1999, each
year drawing approximately 30,000 people to the Racetrack. Lilith Fair will not
return to Canterbury Park in 2000 as 1999 was the last year for the national
tour. Two additional major concerts were conducted in September of 1998 and
1999.


                                       4

<PAGE>

         To date in 2000, the facility has hosted a snowmobile race weekend and
a number of trade shows. Canterbury Park maintains a reputation as one of the
premier snowmobile racing venues in the world.

         The construction and commencement of the Card Club operation in the
year 2000 has reduced the available square footage for special events occurring
within the grandstand facility, such as trade shows and craft shows. As a
result, the Company expects a reduction in the number and size of these types of
events and a corresponding reduction in special event revenues.


(iii)    SOURCES OF REVENUE

         GENERAL.

         The Company's revenues are principally derived from pari-mutuel
wagering. 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 amount wagered or "handle," 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 the Racetrack's primary source of
operating revenue. From the takeout, funds are paid to the State of Minnesota
for pari-mutuel taxes, with additional amounts set aside for purses and for the
"Breeders' Fund," which is a fund apportioned by the Minnesota Racing Commission
("Racing Commission") among various purposes related to Minnesota's horse
breeding and horse racing industries. 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" (a wager on one specific horse to finish first); "place" (a wager on one
specific horse to finish first or second); and "show" (a wager on one specific
horse to finish first, second or third). Examples of exotic wagers include:
"daily double" (a wager in which the bettor selects the horses that will win two
consecutive races); "exacta" (a wager in which the bettor selects the horses
that will finish first and second, in order); "trifecta" (a wager in which the
bettor selects the horses that will finish first, second and third, in order);
and "pick six" (a wager in which the bettor selects the horses that will finish
first in six consecutive races).

         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
Breeders' Fund 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 is calculated as a percentage of
monies wagered (generally 2.50% to 4.50%) and is negotiated with the host track
and must comply with state laws governing the host track.

         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 Breeders' Fund.

         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. The
Breeders' Fund receives 1% of the handle. The pari-mutuel tax applicable to
wagering on all 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.


                                       5

<PAGE>

         The following table sets forth the percentage distribution of each
dollar wagered on live races at the Racetrack, as established by the Racing Act,
and the Racetrack's retainage:

<TABLE>
<CAPTION>

                                                                                   Live Racing
                                                                                   -----------
                                                                      Straight                     Exotic
                                                                      --------                     ------
<S>                                                         <C>       <C>          <C>             <C>
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)                         .17                         .23
     Racetrack Retainage (1)                                7.43                       13.37

Total Takeout                                                             17.00                      23.00
                                                                     ------------               -------------

Total Handle                                                             100.00%                    100.00%
                                                                     ============               =============
</TABLE>

-------------------

(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.

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
established 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 Breeders' Fund 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 an 8% expense factor, pari-mutuel taxes, payments to the
Breeders' Fund and host fee payments to the host racetrack.


                                       6

<PAGE>

         The following table sets forth the approximate percentage distribution
of each dollar wagered for races simulcast at the Racetrack and the Racetrack's
retainage:

<TABLE>
<CAPTION>

                                                              During Racing Season
                                                              --------------------
                                                                                 Not Concurrent
                                                      Concurrent with                  with                  Outside of
                                                         Live Card                  Live Card               Racing Season
                                                     ------------------         -----------------           -------------
<S>                                                  <C>                        <C>                         <C>
Returned to Winning Patrons (1)                              80.50%                    80.50%                      80.50%
     Minnesota Breeders' Fund                        1.00%                      1.10%                       1.10%
     Minnesota Pari-Mutuel Taxes (2)                  .19                        .19                         .19
     Purse (3)                                       8.40                       7.39                        1.70
     Host Track Fees (4)                             3.50                       3.50                        3.50
     Racetrack Retainage (3)                         6.41                       7.32                       13.01
Total Takeout                                                19.50                     19.50                       19.50
                                                     ----------------           ---------------            ----------------
Total Handle                                                100.00%                   100.00%                     100.00%
                                                     ================           ===============            ================
</TABLE>

-------------------

(1)      This amount will depend upon the takeout at the host racetrack. This
         percentage will be 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.

(3)      Although Minnesota law specifies a minimum, the actual percentage is
         determined by agreement between the Racetrack and the MHBPA. Any
         additional amounts paid for purses reduce the Racetrack's retainage.

(4)      Payments to the host track generally range from 2.5% to 4.5% of total
         handle, subject to negotiation with each host track. For purposes of
         this table, the host track fee is assumed to be 3.5%.

         CARD CLUB

         As discussed above under business development, beginning on or about
         April 19, 2000 the Company will derive revenue from its Card Club
         operation.

         OTHER REVENUE

         The Company also derives revenue from other activities such as
admissions and parking fees, as well as from the sale of food and beverage,
programs, and other racing publications. The Company offers advertising signage
space similar to that appearing at many sports stadiums. Finally, additional
revenues are derived from use of the facilities for events such as concerts,
trade and craft shows, snowmobile racing, business meetings, private parties,
horse expositions and sales, boat and automobile storage, community events, and
rental of the parking lot for various automobile activities and vehicle storage.


                                       7

<PAGE>

(iv)     COMPETITION

         The Company competes with other forms of gaming in the State of
Minnesota, particularly casino-style gambling located on Native American
reservations throughout the State of Minnesota, including a large casino located
approximately three miles from the Racetrack. In addition, the Company competes
against charitable gambling (bingo and pulltabs) and various state lottery
products. The Company also competes with a greyhound racetrack located
approximately 40 miles from the Racetrack at the eastern end of the
Minneapolis-Saint Paul metropolitan area. This greyhound track offers wagering
on live and simulcast dog racing, as well as wagering on simulcasting of
Thoroughbred horse racing. In addition, the Company faces increasing competition
from off-shore and out-of-state simulcast operations illegally marketing
internet and telephone account home wagering systems to Minnesota residents.

         The Racetrack also competes with other forms of entertainment in the
Minneapolis-Saint Paul metropolitan area, including a wide range of live and
televised professional and collegiate sporting events. Finally, live horse
racing competes with a wide variety of summer attractions, including amusements
parks, sporting events and other local activities.

         The Company also competes with racetracks located throughout the United
States in securing the better quality horses to run at the Racetrack. Attracting
the owners and trainers of better quality horses is largely influenced by the
ability to offer large purses. The Company experiences significant competition
for better quality horses from a racetrack located near Des Moines, Iowa, as
well as racetracks in Chicago, Illinois, which offer substantially larger purses
than the Company. This competition is expected to continue for the foreseeable
future.

(v)      MARKETING

         The Company's primary market is the seven county Minneapolis-Saint Paul
metropolitan area. Current demographic information indicates that approximately
2 million adults, age 21 and older, reside within a 50 mile radius of Shakopee
Minnesota. This information does not include adults ages 18 to 20 years of age
which are also patrons of the Racetrack.

         To support its primary business of pari-mutuel horse racing, the
Company maintains year-round marketing efforts which are focused on maintaining
the loyalty of live and simulcast patrons and attracting new customers. The
Company is planning substantial marketing of the Card Club using newspapers,
television, the internet, other print media, radio and direct mail. The Company
plans to combine its marketing efforts on communicating the excitement of
wagering on horse racing with card playing. In addition to its regular
advertising program, the Company conducts numerous special promotions and
handicapping contests to increase simulcast patronage.

         The 1999 and 1998 live racing advertising campaigns utilized print,
radio and television advertising to highlight the attractive, park-like
atmosphere of Canterbury Park, promoting activities for the entire family, as
well as the fun and excitement of live horse racing. In addition, the
development of a customer data base enabled the Company to increasingly utilize
direct mail advertising since 1997.

         Because wagering on horse racing is more complex than many other forms
of gaming, such as slot machines or the various lottery products, the Company
continues to develop and conduct various educational programs, such as tours of
the Racetrack, wagering classes and contests that it believes will make the
sport of horse racing and pari-mutuel wagering more understandable to the
general public.


                                       8

<PAGE>

(vi)     REGULATION

         GENERAL.

         The ownership and operation of a horse racetrack in Minnesota is
subject to significant regulation by the Racing Commission under the Racing Act
and the rules adopted by the Racing Commission. The Racing Act provides for the
allocation of each wagering pool to winning bettors, the racetrack, purses, the
State of Minnesota and the Breeders' Fund and empowers the Racing Commission to
license and regulate substantially all aspects of horse racing in the State. The
Racing Commission, among other things, grants operating licenses to racetracks
after an application process and public hearings, licenses all employees of a
racetrack, 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, totalizator contracts
and concessionaire agreements. Decisions by the Racing Commission in regard to
any one or more of the foregoing matters could adversely affect the Company's
operations.

         A federal statute, the Interstate Horse Racing Act of 1978, also
provides that a racetrack must obtain the consent of the group representing the
majority of the horsepersons (owners and trainers) of the horses racing at the
racetrack, and the consent of the state agency regulating the racetrack, in
order to transmit simulcast signals of its live races or to receive and use
simulcast signals from other racetracks. The Company has obtained the consent of
the MHBPA and Minnesota Racing Commission for receiving and sending simulcasting
signals.

         ISSUANCE OF CLASS A AND CLASS B LICENSES TO THE COMPANY.

         The Racing Commission issued a Class A License to the Company on April
27, 1994. The Class A License allows the Company to own and operate the
Racetrack. The Class A License is effective until revoked or suspended by the
Racing Commission, or relinquished by the licensee. The fee for a Class A
License is $10,000 per calendar year.

         The Racing Commission issued a Class B License to the Company on April
27, 1994. The Class B License 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 Racing Commission. The Class B License is renewable each year by the
Racing Commission after a public hearing (if required by the Racing Commission).
The Company's Class B License was renewed for the 2000 season in December 1999.
The fee for a Class B License is $100 for each assigned race day on which live
racing is actually conducted and $50 for each day on which simulcasting is
authorized and actually takes place.

         The Racing Commission issued an additional Class B License to the
Company on January 19, 2000. This Class B License allows the Company to host
unbanked card games. The Class B License is renewable each year by the Racing
Commission after a public hearing (if required by the Racing Commission). The
fee for this Class B License is $10,000 per calendar year.


                                       9

<PAGE>

         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 in the seven county
metropolitan area (the counties of Hennepin, Ramsey, Washington, Scott, Dakota,
Anoka and Carver), except the Racing Commission 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. Therefore, as long as the Company holds the Class
A License, only the Company may own and operate a racetrack in the seven county
metropolitan area where Thoroughbred Horses and Quarter Horses may be raced.

         LIMITATION ON OWNERSHIP AND MANAGEMENT OF AN ENTITY WHICH HOLDS A CLASS
A LICENSE AND/OR CLASS B LICENSE.

         The Racing Act requires prior Racing Commission 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 and 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 Racing Commission of
the changes within five days of this occurrence and provide the information
required by the Racing Act.

         CARD CLUB REGULATION.

         The Racing Commission is authorized by law to regulate Card Club
operations. The law required that the Company submit a plan of operation for
card playing activities to the Racing Commission prior to receiving its Class B
license to operate the Card Club. The operating plan received final approval and
the Class B license was granted on January 19, 2000. The law requires that the
Company reimburse the Racing Commission for it's actual costs, including
personnel costs, of regulating the Card Club.

         LOCAL REGULATION.

         The Racetrack is subject to state and local laws, regulations,
ordinances and other provisions affecting zoning 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 will, among
other things, be subject to applicable zoning ordinances and require approval by
the City of Shakopee and other authorities and there can be no assurance such
approvals will be obtained.

(vii)    EMPLOYEES

         At March 13, 2000, the Company had approximately 76 full-time employees
and 152 part-time employees, including 6 full-time employees for the Card Club.
On a seasonal basis the Company adds approximately 120 full-time and 450
part-time employees for live racing operations from early May until early
September. The Company estimates that it will require an additional 200
full-time and 150 part-time employees when the Card Club operation opens in
April 2000. The Company's management believes its employee relations are good.


                                       10

<PAGE>

(viii)   EXECUTIVE OFFICERS

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

<TABLE>
<CAPTION>

Name                                Age              Position With Company
----                                ---              ---------------------
<S>                                 <C>              <C>
Randall D. Sampson                  41               President, Chief Financial Officer, and
                                                     General Manager

Michael J. Garin                    44               Vice President of Hospitality

John R. Harty                       55               Vice President of Marketing

Mark A. Erickson                    43               Vice President of Facilities

Deborah D. Giardina                 47               Vice President of Card Club Operations
</TABLE>

-------------------

         Randall D. Sampson has been President and Chief Financial Officer since
the formation of the Company in March 1994 and General Manager since September
1995. Mr. Sampson has been active in horse racing industry associations, serving
on the Board of Directors of the Minnesota Thoroughbred Association from 1989 to
1993. Mr. Sampson has also been a member of the Minnesota Horsemen's Benevolent
and Protective Association, serving as Vice President of the organization from
1993 to 1994, and was a member of the Minnesota Racing Commission Breeders' Fund
Advisory Board from 1991 to 1997. He also serves as a director of the
Thoroughbred Racing Association of North America. Mr. Sampson is the son of
Curtis A. Sampson, the Company's Chairman of the Board who is a holder of
approximately 31% of the Company's common stock.

         Michael J. Garin has been Vice President of Hospitality since May of
1997. He had served as President of Canterbury Park Concessions, Inc. since
April of 1994. From September 1993 to April 1994, Mr. Garin was employed as Food
and Beverage Supervisor of Little Six, Inc.

         John R. Harty was hired as Vice President of Marketing in February
2000. John served as Vice President of Sales and Marketing for Kim and Sun
Hosiery in Philadephia prior to coming to Canterbury Park. He was employed by
Sun Hockey as its President from 1997 until 1998, and Vice President of Sales
and Marketing from 1992 through 1996.

         Mark A. Erickson has served as Vice President of Facilities since May
1997. He was the Director of Facilities from April 1994 until April 1997. From
May 1992 until employment with the Racetrack, Mr. Erickson served as Maintenance
Supervisor for the Mall of America in Bloomington, Minnesota.

         Deborah D. Giardina joined the Company in November 1999 as Vice
President of Card Club Operations. From June 1995 until November 1999 Deborah
was the Poker Room Manager for Grand Casino Coushatta in Kinder, Louisiana. From
May 1993 until June 1995, Deborah was the Poker Room Manager of Grand Casino in
Gulfport, Mississippi.


                                       11

<PAGE>

ITEM 2.  DESCRIPTION OF PROPERTY

         GENERAL.

         The Racetrack, which is operated under the name "Canterbury Park," is a
modern facility, generally comparable to other major racetracks located
throughout the country. The Racetrack has a patron capacity of approximately
10,000 within an enclosed grandstand, and a maximum patron capacity of over
30,000 including the 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 600 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 primarily
of a partially developed industrial park and farm land. However, 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 approximately 1.3 million visitors during the spring and
summer; the Renaissance Festival, a seven-weekend late summer attraction
attracting approximately 340,000 visitors, located about five miles from the
Racetrack; and Mystic Lake Casino, located about three miles from the Racetrack,
which draws approximately 5.2 million patrons annually. Approximately 20 miles
from the Racetrack is the Mall of America, the largest enclosed shopping mall in
the United States, which attracts approximately 42.5 million visitors per year.

         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 mile and one-quarter
front stretch chute, a 6-1/2 furlong backstretch chute and a quarter horse
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, the mutuels department,
concession and maintenance offices, first aid, mechanical and electrical rooms.
The Track Level includes mutuels windows, restrooms, a variety of concession
stands and other services. A large area of the track level is currently under
construction as the future location of the Card Club. The Card Club when
completed, will be 15,828 square feet. 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 mutuel
windows, restrooms, concession stands and other guest facilities. A portion of
the mezzanine level is currently being converted into a simulcast center to be
used 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 can
support a full dining menu for the track-side dining terraces on the Clubhouse
Level and to prepare food 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. An additional
feature of the Clubhouse Level is a special club area which includes 225 dining
seats, a party room and a large bar and lounge. The Press Box/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.


                                       12

<PAGE>

         OTHER VIEWING AREAS.

         In addition to the grandstand, patrons can watch races from the
following outdoor areas: the apron, or standee ramp, between the grandstand and
the racetrack and a large picnic area immediately north of the grandstand. These
areas have concession stands and mutuel windows nearby.

         GROUNDS; SADDLING PADDOCK AREA.

         The grounds surrounding the grandstand are extensively landscaped.
Located near the main entrance behind the grandstand is a European-style paddock
area where patrons can observe the jockey mounting and the post parade.

         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 216 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 half mile training track.

         PARKING.

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

         INSURANCE.

         The Company maintains insurance on its facilities in amounts it
believes are sufficient.

         OTHER PROPERTIES.

         Approximately 80 acres of the 355 acres owned by the Company are not
necessary for racing operations. This property, adjacent to the Racetrack, is
undeveloped and could be sold in whole or in part, depending upon future
opportunities. The 355 acres includes 30 acres of undeveloped land adjacent to
Canterbury Park which was purchased on August 18, 1997, for investment or future
development. 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
business of horse racing.

ITEM 3.  LEGAL PROCEEDINGS

         Not Applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         Not Applicable.


                                       13

<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a)      MARKET INFORMATION

         The Company's Common Stock is traded on the NASDAQ Stock Market under
the symbol TRAK. The table set forth below indicates the high and low trade
prices for the Common Stock for the years ended December 31, 1999 and 1998.
These prices indicate interdealer prices without retail markup, markdowns or
commissions.

<TABLE>
<CAPTION>

                                                                    1999                                     1998
                                                        ------------------------------           ------------------------------
                                                          High                 Low                 High                 Low
                                                        ----------           ---------           ---------            ---------

COMMON STOCK
<S>                                                <C>                    <C>                    <C>                  <C>
First Quarter                                      $    7 3/4             $  4 1/8               3 3/8                2 1/2
Second Quarter                                          6 1/4                3 1/2               3 1/2                2 3/8
Third Quarter                                           5 1/2                4 11/16             3 3/32               2 5/8
Fourth Quarter                                          6 1/8                4 7/8               5                    2 13/16
</TABLE>

(b)      HOLDERS

         At March 13, 2000, the Company had approximately 404 holders of record
of its common stock. In addition, on that date a depository company held
approximately 1,735,000 shares as nominees for an estimated 1,700 beneficial
holders.

(c)      DIVIDENDS

         The Company has not paid any dividends on its common stock and does not
anticipate paying any in the foreseeable future. The Company's current loan
arrangements with a commercial bank prohibit the payment of dividends without
the bank's consent.


                                       14

<PAGE>

ITEM 6   MANAGEMENT'S DISCUSSION AND ANALYSIS

GENERAL

         Canterbury Park Holding Corporation (the "Company") owns and operates
Canterbury Park (the "Racetrack"), the only pari-mutuel horse racing facility in
the State of Minnesota. The Company's revenues for the years ended December 31,
1999 and 1998 were derived primarily from pari-mutuel take-out on live races and
races simulcast year-round to Canterbury Park from racetracks throughout the
country. In addition the Company earned pari-mutuel take-out during live race
meets featuring thoroughbred, quarter horse and harness racing. During 1999 the
Company conducted 364 days of simulcast racing, including 56 days of live
racing. In 1998 the Company conducted 364 days of simulcast racing including 55
days of live racing. The live race meets in 1999 and 1998 commenced in the month
of May and concluded in August of 1999 and September of 1998 (including three
days of harness racing over the Labor Day weekend.) During live race meets, the
Company televises its races to out-of-state racetracks around the country. The
Company earns additional pari-mutuel revenue on wagers placed at out-of-state
racetracks. In addition to pari-mutuel revenues, the Company generates revenues
from admissions, parking, publication sales, concession sales, special events,
facility rental, advertising and other sources.

         On May 25, 1999, legislation authorizing new gaming authority for the
Company became law. This legislation will allow the Racetrack to host unbanked
card games whereby players compete against each other and not against the house.
Under the new gaming authority, the Racetrack will receive a percentage of the
wagers or a fee from the players as its revenue for providing the facility and
services. The new law specifies that the Racetrack's purse fund and the State of
Minnesota Breeders' Fund will receive a total of 10% to 14% of the gross revenue
generated by the Canterbury Card Club (the "Card Club"). The Minnesota Racing
Commission is authorized by the legislation to regulate Card Club operations.
The operating plan was approved by the Minnesota Racing Commission on January
19, 2000. The Company anticipates that the Card Club will begin operation on or
about April 19, 2000.

         As of March 30, 2000 the 15,828 square foot Card Club is under
construction within the Canterbury Park grandstand facility. The construction
project is on schedule to be completed in mid-April 2000. The Company hired a
general manager for the Card Club operation in November 1999 and has hired
additional management and supervisory personnel for the Card Club since that
time. The Company has conducted an eight-week training school for card dealers
which commenced in late January, 2000. Expenditures related to the construction
of the Card Club and enhancements to the facility are expected to be
approximately $2 million. Expenditures related to the acquisition of furniture,
fixtures, equipment and supplies will be approximately $700,000. The Company has
received a commitment from Bremer Bank to provide term financing for
approximately 75% of the total estimated costs of construction and 50% of
furniture, fixture and equipment costs of the Card Club. The remainder will be
funded from internal cash flow. The Company anticipates that operating expenses
for the Card Club in the year 2000 will exceed revenues and generate operating
losses, due to pre-opening expenses including the development of the
comprehensive operating plan, recruiting and training of Card Club dealers and
other personnel, acquisition of assets, and development of security,
surveillance and other internal control systems required to safeguard Card Club
assets and the public.


                                       15

<PAGE>

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1999 AND DECEMBER 31,
1998

         Total operating revenues for the year ended December 31, 1999 were
$20,330,508, an increase of 5.9% compared to total operating revenues of
$19,195,577 for the year ended December 31, 1998. Pari-mutuel revenues increased
6.9% in fiscal year 1999 compared to fiscal year 1998. Discussion of the change
in pari-mutuel revenues follows the Summary of Operating Data below.

         Concession revenues increased 15.2% during the year ended December 31,
1999 compared to the year ended December 31, 1998. The increase is due primarily
to increased concession sales during special events hosted by the Racetrack. The
remaining increase is attributable to higher racing attendance in 1999 compared
to 1998, and a slight increase in the price of certain food stand items in May
1999.

         Other operating revenue decreased $101,000 (11.5%) to $772,000 in
fiscal year 1999. This decrease was primarily related to revenues from leasing
underutilized areas of the Racetrack grounds for vehicle storage, which
decreased from approximately $400,000 in 1998 to $296,000 in 1999.

The following table summarizes operating data for the years ended December 31,
1999 and December 31, 1998:

SUMMARY OF OPERATING DATA:

<TABLE>
<CAPTION>

                                                                        YEAR                           YEAR
                                                                        ENDED                          ENDED
                                                                     DECEMBER 31,                   DECEMBER 31,
                                                                        1999                           1998
<S>                                                             <C>                            <C>
       RACING DAYS
            Simulcast only days                                              308                            309
            Live and simulcast days                                           56                             55
                                                                ----------------------         -----------------------
                                      TOTAL RACING DAYS                      364                            364

       ATTENDANCE
            Simulcast only days                                          133,000                        132,000
            Live and simulcast days                                      209,000                        193,000
                                                                ----------------------         -----------------------
                                      TOTAL ATTENDANCE                   342,000                        325,000

       ON-TRACK HANDLE
            Simulcast only days                                 $     45,549,000               $     43,819,000
            Live and simulcast days
                Live racing                                           13,898,000                     12,013,000
                Simulcast racing                                      12,779,000                     12,876,000
       OUT-OF-STATE LIVE HANDLE                                       10,427,000                      7,985,000
                                                                ----------------------         -----------------------
                                      TOTAL HANDLE              $     82,653,000               $     76,693,000

       AVERAGE DAILY ATTENDANCE
            Simulcast only days                                              432                            427
            Live and simulcast days                                        3,732                          3,509

       ON-TRACK PER CAPITA WAGERING
            Simulcast only days                                 $            342               $            332
            Live and simulcast days                                          128                            129

       ON-TRACK AVERAGE DAILY HANDLE
            Simulcast only days                                 $        147,886               $        141,809
            Live and simulcast days                                      476,375                        452,527
</TABLE>


                                       16

<PAGE>

         Total pari-mutuel revenues increased 6.85% to approximately $15,438,000
in 1999 from $14,448,000 in 1998. Total attendance for live and simulcast racing
increased by 5.2% to 342,000 during the twelve months ended December 31, 1999,
from 325,000 during the twelve months ended December 31, 1998. The total
on-track per capita wager for fiscal year 1999 of $211 was unchanged from fiscal
year 1998. Total on-track handle increased approximately 5.1% to $72,226,000 in
1999 from $68,708,000 in 1998. Handle wagered at out-of-state locations
increased 30.6% or $2,442,000 compared to 1998, due primarily to approximately
$1.4 million wagered by out-of-state locations on the Claiming Crown races on
August 7th .

         Pari-mutuel revenues related to simulcast racing increased 4.1% to
$11,858,000 in 1999 from $11,394,000 in 1998. This change was consistent with
the change in total simulcast handle, which increased to $58,328,000 in 1999, up
from $56,695,000 in 1998.

         On-track wagering on live races at the Racetrack increased by
$1,885,000, or 15.7%, to $13,898,000 in 1999 from $12,013,000 in 1998, causing
pari-mutuel revenue to increase by 14.9% to $2,913,000 in 1999 from $2,535,000
in 1998. An increase of 6.36% in average daily attendance in 1999 compared to
1998 on days when both simulcast and live racing were conducted resulted in an
increase in average daily handle of $23,848 or 5.3%.

         Pari-mutuel revenue from simulcasting the Racetrack's live races to
out-of-state locations totalled approximately $280,000 in 1999 compared to
$230,000 in 1998. The Racetrack receives amounts ranging from 2.50% to 3.00% of
amounts wagered at out-of-state racetracks as a "guest fee". The increase in
revenues is attributable to the increase in out-of-state handle as discussed
above.

         Revenues recognized for proceeds from winning pari-mutuel tickets which
were not presented for payment within one year of the end of the respective race
meets increased to approximately $387,000 in 1999 compared to $286,000 in 1998.

         Total operating expenses increased 5.7% to $19,766,000 in 1999 from
$18,698,000 in 1998. An increase of 10.6% in pari-mutuel expenses in fiscal year
1999, compared to fiscal year 1998, is directly related to the increase in
handle. Salary and benefit expenses increased 5.6% in 1999 compared to 1998, due
to increased labor costs associated with generating increased revenues,
additional full-time positions added in 1999 related to the Card Club and
supporting functions, and additional employee benefit and recruitment expenses
in 1999.

         Depreciation expense decreased in 1999 due to certain assets becoming
fully depreciated in 1999.

         Advertising and marketing costs increased in 1999 compared to 1998
primarily due to increased expenditures related to live racing and special
events. In addition, the Claiming Crown resulted in additional expenditures,
particularly in its inaugural year.

         Minnesota law requires the Company to allocate a portion of funds
received from wagering on simulcast and live horse races for future payment as
purses for live horse races or other uses of Minnesota's horsepersons'
associations. This purse expense is one of the Company's largest single expense
items. The minimum percentage required by law to be set aside for purses from
simulcasting varies substantially depending on the time of year the simulcasting
is conducted. For the 25-week period beginning in early May, which is the
statutorily established "Racing Season," 50% of net pari-mutuel revenue, before
deducting for purses, is allocated to a fund for the payment of purses during
the live meet. For the remaining 27 weeks of the racing year, November through
April, funds accumulate at the rate of 25% of net pari-mutuel revenue, before
deducting for purses, but after deducting an 8% expense factor. Purse expense as
a percentage of the Company's pari-mutuel commission and breakage revenues
increased to 29.6% in 1999 compared to 27.5% in 1998 due to a $280,000 purse
guarantee related to the Claiming Crown races. Excluding the Claiming Crown
purse guarantee, the 1999 purse expense percentage was 27.7%.

          The Company incurred incremental purse expense due to Claiming Crown
purse guarantees of $280,000 which is included in pari-mutuel statutory purse
expense in the 1999 statement of operations. While the Company anticipated that
the full amounts incurred for purses and other costs to organize and promote
this national event


                                       17

<PAGE>

would not be recovered fully through pari-mutuel and other revenues in its
inaugural year, management expects to profit from the event in future years. The
Racetrack is the scheduled site of the Claiming Crown for the next two years and
a total of six of the first ten years the event is held.

         Amounts paid to the Minnesota Breeders' Fund are a function of on-track
handle and the increase to $773,000 in 1999 compared to $728,000 in 1998 is
attributable to and consistent with the increase in total on-track handle.

          Host track fees remained steady at 3.42% of simulcast handle in 1999
compared to 3.45% in 1998. The host fee is calculated as a percentage of monies
wagered on out-of-state racetracks (generally 2.50% to 4.50%) and is negotiated
with each host track. While the average fee rate remained steady, the Company
benefited by entering into a Hub Services Agreement with certain racetracks in
Chicago Illinois (the "Chicago Hub") in February 1999. This agreement benefits
the Racetrack by reducing simulcasting related expenses such as data
transmission costs and tote fees.

         Interest expense decreased 71.0% to $34,208 in 1999 compared to
$118,151 in 1998. Interest expense relates primarily to amounts due under line
of credit agreements and to amounts due on advances from the MHBPA. The Company
operated under a line of credit agreement with the Company's Chairman until June
11, 1998 when it was replaced with a commercial revolving credit line with
Bremer Bank N.A. The average daily balance of borrowings under the line credit
was $47,000 in 1999. The line of credit was last utilized in March 1999. The
combined average daily balance of the lines of credit utilized in 1998 was
approximately $823,000. The weighted average rate of interest on the lines of
credit was 7.75% and 8.53% for 1999 and 1998, respectively. Interest charged to
operations under the line of credit with the Chairman was $43,349 in fiscal year
1998. Amounts charged to operations in 1999 and 1998 for interest expense on the
line of credit with Bremer Bank were $3,657 and $26,843, respectively. The
average daily balance of amounts due under advances with the MHBPA was
approximately $383,000 in 1999 compared to $558,000 in 1998. The weighted
average rate of interest on the amounts due to the MHBPA was 7.96% for fiscal
year 1999, compared to 8.49% for fiscal year 1998. The interest rate on the line
of credit and the MHBPA advances was 8.50% at December 31, 1999 compared to
7.75% at December 31, 1998. Interest charged to operations on advances with the
MHBPA was $30,530 in fiscal year 1999, compared to $47,416 in fiscal year 1998.

         Interest income was $27,951 in fiscal year 1999 compared to $7,587 in
fiscal year 1998. The Company's cash balances have exceeded its cash
requirements since March of 1999 when the Company was able to pay off an
outstanding balance on its line of credit with Bremer Bank. All cash balances of
the Company are "swept" into a single account at the close of every business day
to maximize earnings and float. The cash balances are invested in an overnight
repurchase agreement on a daily basis, collateralized by mortgage-backed
securities. The average daily balance of amounts in the cash account was
approximately $491,000 in 1999. The average interest rate earned on the cash
balances was 4.33%.

         The 1999 operating results include $125,000 of pre-operating expenses
related to the development of the Card Club which the Company anticipates will
open in April of 2000. Of that amount, $76,000 of professional fee expenses,
primarily related to consulting fees and market research, are included in other
operating expense. In addition, $15,000 is included in salaries and benefits
expense and $34,000 is in other expense categories. An additional $49,000 was
capitalized in construction in progress for building improvements related to the
Card Club. No expenses were incurred in 1998 related to the Card Club.

         Real estate tax expense was $231,070 in 1999 compared to $417,003 in
1998. The Company estimates and accrues property tax expense each year for taxes
due and payable the following year, based on estimates received from the taxing
authorities. Actual property tax payments in 1999 were $292,546 compared to
$354,022 in 1998.

         Pretax net income for the horse racing segment of the Company was
$545,000 for fiscal year 1999 compared to $377,000 for fiscal year 1998. Pretax
net income for the concessions segment of the Company was $191,000 compared to
$62,000 in 1998.


                                       18

<PAGE>

         Net income for the year ended December 31, 1999 was $437,291, compared
to net income of $433,747 for the year ended December 31, 1998. Income before
income taxes was $558,461 in 1999 compared to $386,619 in 1998. The Company
incurred income tax expense of $121,170 in 1999 compared to an income tax
benefit in 1998 of $47,128. The income tax benefit in 1998 was the net result of
a $208,000 deferred tax benefit due to a reduction of it's valuation allowance,
offset by current income tax expense of $161,000 for the year. Since acquisition
of the Company in 1994, the Company had fully offset any deferred tax assets
with a valuation allowance due to the uncertainty of realization of the benefits
in future periods. At December 31, 1998, management reduced it's valuation
allowance to $130,000. At December 31, 1999, management determined that based on
recent and projected profitability, it was more likely than not that the
deferred tax asset would be fully utilized in the future and thus completely
eliminated it's valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES:

         During the year ended December 31, 1999, cash provided by operating
activities was $1,018,339, which resulted principally from net income of
$437,291 and depreciation and amortization of $776,680, partially offset by the
increase in the deferred tax asset of $122,800 and a decrease in accrued
interest of $92,914. During the year ended December 31, 1998, cash provided by
operating activities was $1,383,697, which resulted principally from net income
of $433,747, depreciation and amortization of $901,443, and an increase in
income taxes payable of $160,875, partially offset by an increase in the
deferred tax asset of $208,000.

         For fiscal 1999, net cash used in investing activities was $470,416 for
capital expenditures. In 1999 the Company invested $100,000 in improvements to
facilitate conducting large outdoor special events, $49,000 for Card Club
investments in construction in progress, and $75,000 in computer equipment and
upgrades. The remaining balance of expenditures of $246,000 in 1999 compares to
$221,439 for capital expenditures for fiscal 1998 which was partially offset by
proceeds from the sale of property and equipment of $33,091. The Company
estimates that it will spend approximately $400,000 for capital expenditures
during fiscal year 2000 excluding capital expenditures for the Card Club.
Current Card Club estimates project that the Company will invest approximately
$800,000 in the year 2000 representing 25% of the total cost of construction and
50% of furniture, fixtures and equipment purchases.

         Cash provided by financing activities was $429,958 for the year ended
December 31, 1999, which includes proceeds of $1,217,810 from the issuance of
common stock. These common stock issuances resulted from the exercise of stock
options by employees and the Chairman of the Board and to the issuance of common
stock pursuant to the Company's employee stock purchase plan. In addition, the
underwriters exercised warrants to acquire 120,000 shares at $4.80 prior to
their expiration in August 1999. These cash inflows were partly offset by net
payments on the borrowings under the credit agreement of $608,449 and $179,403
net payments on the advance with the MHBPA. During 1998, cash used in financing
activities was $1,154,301, which included the pay off of the Company's line of
credit with its Chairman of the Board of $1,651,942 on June 11, 1998. This net
payment was offset by the proceeds from borrowings under the new commercial
revolving credit line of $608,449. Net payments on the advance from the MHBPA
used net cash of $163,159 in 1998. The Company was provided cash of $52,351 in
1998 upon the issuance of common stock, due primarily to the exercise of options
and to the issuance of common stock pursuant to the Company's employee stock
purchase plan.

         Pursuant to an agreement with the MHBPA, the Company transferred into a
trust account or paid directly to the MHBPA, approximately $3,975,000 and
$3,650,000 in purse funds for the years ended December 31, 1999 and 1998,
respectively. Minnesota Statutes specify that amounts transferred into trust are
the property of the trust and not of the Company. Unpaid purse fund obligations
due the MHBPA were $367,011 and $546,414 at December 31, 1999 and 1998,
respectively. The interest rates on any statutory purses accrued but not
transferred into the trust (which are guaranteed by the Company's Chairman of
the Board) were 8.50% and 7.75% at December 31, 1999 and 1998, respectively.

         At January 1, 1998 the Company had a $3,000,000 line of credit
arrangement with the Chairman of the Board, of which $1,651,942 was outstanding.
The interest rate for borrowings under the line of credit was the


                                       19

<PAGE>

prime rate. This line of credit was paid off on June 11, 1998 and was replaced
by a commercial revolving credit line with Bremer Bank, N.A.

         The Company entered into a general credit and security agreement with
Bremer Bank, N.A., a financial institution located in South Saint Paul,
Minnesota, on June 3, 1998. Borrowings under the credit agreement include a
commercial revolving credit line which provides for maximum advances of
$2,250,000 with interest at the prime rate (8.50% at December 31, 1999). No
borrowings under the credit line were outstanding at December 31, 1999.
Borrowings under the credit line were $608,449 at December 31, 1998.

         Cash balances at December 31, 1999 were $1,350,052 compared to $372,171
at December 31, 1998. The significant increase is due primarily to cash inflows
from operations and the sale of common stock due to option and warrant exercises
in 1999 totaling $1,217,810.

         Management believes that funds available in its cash accounts, amounts
available under the general credit and security agreement, term loan commitments
to fund Card Club construction, along with funds generated from operations, will
be sufficient to satisfy its liquidity and capital resource requirements during
2000. The Company anticipates total Card Club construction and pre-opening
expenses of approximately $3 million. Net of the anticipated Card Club term loan
proceeds of approximately $1,800,000, the Company expects to use cash reserves
of approximately $1,200,000 prior to the commencement of Card Club operations in
the year 2000.

OPERATING PLAN:

         In 1999 the Company successfully conducted its fifth live race meet.
The Company plans a 59-day live race meet in 2000 consisting of 30 days of mixed
Thoroughbred and Quarter Horse racing and a 29-day Thoroughbred only meet. The
Company competes with racetracks located throughout the United States in
securing the better quality horses to run at the Racetrack. Attracting the
owners and trainers of better quality horses is largely influenced by the
ability to offer large purses. Over the past five years, the Company has offered
consistent levels of purse monies from year to year by limiting the number of
live racing days and utilizing purse monies from simulcasting and live race
wagering. However, the Company continues to experience stiff competition for
better quality horses from a racetrack located near Des Moines, Iowa, as well as
racetracks in Chicago, Illinois which offer substantially larger purses.

         The Canterbury Card Club is expected to significantly contribute to
purse fund monies once the Card Club begins operations in April 2000. The
legislation mandates that 10% of the first $6,000,000 of Card Club gross
revenues be paid to horseperson organizations for the payment of purses during
the Company's live race meets. This percentage increases to 14% after the first
$6,000,000 of revenues. However, the legislation mandated that the Minnesota
Breeders' Fund receive 10% of the amounts above for its purposes. Because the
Card Club is not opening until shortly before the commencement of the 2000 live
race meet, the increased contributions to the purse fund are expected to have a
minimal impact on the amounts paid out for purses during the 2000 meet. The
Company anticipates that the Company will be in a more competitive position for
better quality horses beginning in the year 2001, when increased purse
contributions have had an opportunity to accumulate.

                  The Company's profitably in the year 2000 is dependent
primarily upon the results of operations of the Card Club and the related
concessions operation. The Company anticipates that operating expenses for the
Card Club in the year 2000 will exceed revenues and generate operating losses,
due to pre-opening expenses related to the development of the comprehensive
operating plan, recruiting and training of Card Club dealers and other
personnel, acquisition of assets, and development of security and surveillance
systems required to safeguard Card Club assets. However, if the racetrack is
able to maintain levels of attendance and handle for live and simulcast racing
at levels similar to previous years while maintaining the levels of expenses
previously experienced for racing operations, the Company has the potential to
generate operating income in the year 2000. An additional consideration for 2000
is that the Company's revenues in 1999 were significantly impacted by special
event and facility rental revenues. While the Company plans to continue its
emphasis on its use as an outdoor concert venue


                                       20

<PAGE>

and maintaining 1999 levels of vehicle storage revenues, there can be no
guarantee that 1999 levels of these revenues will continue into the future.

         Management intends to continue pursuing legislation for additional
potential sources of revenue. These efforts could result in increased
legislative related expenses in the future.

FACTORS AFFECTING FUTURE PERFORMANCE:

                  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, the Company may comment on anticipated
future financial performance. Such forward looking statements, including
statements contained in this Report on Form 10-KSB, are subject to risks and
uncertainties which may adversely affect future financial performance,
including, but not limited to, fluctuations in attendance at the Racetrack,
changes in the level of wagering by patrons, legislative and regulatory changes,
the impact of wagering products introduced by competitors, higher than expected
expenses, unprofitable operations of new initiatives launched by the Company in
future periods, and other risks applicable to the gaming and horse racing
industries generally.

ITEM 7.  FINANCIAL STATEMENTS

         The following financial statements of the Company are set forth on
pages 22 through 35 of the Form 10-KSB:

<TABLE>
<CAPTION>

                                                                                                                      Page
                                                                                                                  -------------

<S>                                                                                                                   <C>
Independent Auditors' Report................................................................................           22

Consolidated Balance Sheets as of December 31, 1999 and 1998 ...............................................           23

Consolidated Statements of Operations for the years ended December 31, 1999 and
December 31, 1998 ..........................................................................................           24

Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 1999 and December 31, 1998 ....................................................................           25

Consolidated Statements of Cash Flows for the years ended December 31, 1999 and
December 31, 1998 ..........................................................................................           26

Notes to Consolidated Financial Statements for the years ended December 31, 1999 and
December 31, 1998 ..........................................................................................           27
</TABLE>


                                       21

<PAGE>

INDEPENDENT AUDITORS' REPORT

Board of Directors
Canterbury Park Holding Corporation
Shakopee, Minnesota

We have audited the accompanying consolidated balance sheets of Canterbury Park
Holding Corporation and subsidiary (the Company) as of December 31, 1999 and
1998 and the related consolidated statements of operations, stockholders'
equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide 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 subsidiary as of December 31, 1999 and 1998 and the
results of their operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

Deloitte & Touche LLP



March 14, 2000
Minneapolis, Minnesota


                                       22

<PAGE>

CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                           1999                  1998
<S>                                                                                   <C>                   <C>
ASSETS

CURRENT ASSETS:
     Cash                                                                             $    1,350,052        $      372,171
     Accounts receivable                                                                     187,463               215,296
     Inventory                                                                                72,908                89,640
     Deposits                                                                                 20,000                20,000
     Prepaid expenses                                                                        136,686               121,859
     Income tax refund receivable                                                              6,693
                                                                                      ----------------      ----------------
         Total current assets                                                              1,773,802               818,966

PROPERTY AND EQUIPMENT, net  (Note 2)                                                      8,084,431             8,386,439

DEFERRED TAX ASSET  (Note 3)                                                                 330,800               208,000

INTANGIBLE ASSETS, net of accumulated amortization of $20,113                                                        4,256

                                                                                      ----------------      ----------------
                                                                                      $   10,189,033        $    9,417,661
                                                                                      ================      ================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                                 $      816,020        $      760,132
     Accrued wages and payroll taxes                                                         154,665               166,898
     Accrued interest                                                                          7,453               100,367
     Advance from MHBPA (Note 1)                                                             367,011               546,414
     Borrowings under credit agreement (Note 6)                                                                    608,449
     Accrued property taxes                                                                  292,546               354,022
     Income taxes payable                                                                                          160,875
     Payable to horsepersons                                                                 100,538                70,805
                                                                                      ----------------      ----------------
         Total current liabilities                                                         1,738,233             2,767,962

COMMITMENTS AND CONTINGENCIES (Notes 7 and 8)

STOCKHOLDERS' EQUITY (Note 4):
     Common stock, $.01 par value, 10,000,000 shares authorized, 3,371,999
         and 3,020,167, respectively, shares issued and outstanding                           33,720                30,202
     Additional paid-in capital                                                            9,493,101             8,132,809
     Accumulated deficit                                                                  (1,076,021)           (1,513,312)
                                                                                      ----------------      ----------------
         Total stockholders' equity                                                        8,450,800             6,649,699
                                                                                      ----------------      ----------------
                                                                                      $   10,189,033        $    9,417,661
                                                                                      ================      ================
</TABLE>

See notes to consolidated financial statements.


                                       23

<PAGE>


CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND  1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                            1999                    1998
<S>                                                                                   <C>                     <C>
OPERATING REVENUES:
     Pari-mutuel                                                                      $    15,438,261         $    14,448,354
     Concessions                                                                            2,971,195               2,578,262
     Admissions and parking                                                                   469,821                 563,091
     Publications                                                                             679,036                 733,075
     Other operating revenue                                                                  772,195                 872,795
                                                                                      ------------------      ------------------
                                                                                           20,330,508              19,195,577

OPERATING EXPENSES:
     Pari-mutuel expenses:
         Statutory purses                                                                   4,373,040               3,828,864
         Host track fees                                                                    1,992,624               1,953,901
         Pari-mutuel taxes                                                                    148,706                  78,020
         Minnesota Breeders' Fund                                                             772,996                 728,387
     Salaries and benefits                                                                  4,968,519               4,703,506
     Cost of sales related to concessions                                                     824,225                 772,290
     Cost of sales related to publications                                                    803,193                 783,256
     Depreciation and amortization                                                            776,680                 901,443
     Repairs, maintenance and supplies                                                        707,734                 725,497
     Property taxes                                                                           231,070                 417,003
     Advertising and marketing                                                              1,137,374                 863,213
     Utilities                                                                                731,116                 692,992
     Other operating expenses                                                               2,298,513               2,250,022
                                                                                      ------------------      ------------------
                                                                                           19,765,790              18,698,394

NONOPERATING (EXPENSES) REVENUES:
     Interest expense (Note 6)                                                                (34,208)               (118,151)
     Other, net                                                                                27,951                   7,587
                                                                                      ------------------      ------------------
                                                                                               (6,257)               (110,564)
                                                                                      ------------------      ------------------

INCOME BEFORE INCOME TAX EXPENSE                                                              558,461                 386,619
     Income tax (expense) benefit  (Note 3)                                                  (121,170)                 47,128
                                                                                      ------------------      ------------------
NET INCOME                                                                            $       437,291         $       433,747
                                                                                      ==================      ==================


WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING                                         3,178,426               3,005,164
                                                                                      ==================      ==================

BASIC NET INCOME PER COMMON SHARE (Note 5)                                            $            .14        $            .14
                                                                                      ==================      ==================

DILUTED NET INCOME PER COMMON SHARE (Note 5)                                          $            .13        $            .14
                                                                                      ==================      ==================
</TABLE>

See notes to consolidated financial statements.


                                       24

<PAGE>

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998

--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                        Additional     Unearned
                                           Number         Common         Paid-in        Compen-       Accumulated
                                         of Shares         Stock         Capital         sation         Deficit           Total
                                        -------------   ------------   -------------  ------------   ---------------  --------------
<S>                                      <C>            <C>            <C>            <C>            <C>              <C>
BALANCE,  DECEMBER  31, 1997              2,998,848     $   29,989     $  8,061,875   $   (22,044)   $ (1,947,059)    $  6,122,761

Exercise of stock options                     8,775             88           20,276                                         20,364

Issuance and amortization of
     compensatory stock options                                              18,796        22,044                           40,840

Shares issued under Employee Stock
     Purchase Plan                           12,544            125           31,862                                         31,987

Net income                                                                                                433,747          433,747
                                        -------------   ------------   -------------  ------------   ---------------  --------------


BALANCE,  DECEMBER 31, 1998               3,020,167     $   30,202     $  8,132,809   $          0   $ (1,513,312)    $  6,649,699

Exercise of stock options                   213,050          2,130          591,786                                        593,916

Tax benefit of stock option exercises                                       146,000                                        146,000

Exercise of underwriter warrants            120,000          1,200          574,800                                        576,000

Shares issued under Employee Stock
     Purchase Plan                           18,782            188           47,706                                         47,894

Net income                                                                                                437,291          437,291
                                        -------------   ------------   -------------  ------------   ---------------  --------------

BALANCE,  DECEMBER 31, 1999               3,371,999     $   33,720     $   9,493,101  $          0   $ (1,076,021)    $  8,450,800
                                        =============   ============   =============  ============   ===============  ==============
</TABLE>

See notes to consolidated financial statements.


                                       25

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                                               1999                    1998
<S>                                                                                      <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                          $      437,291        $       433,747
     Adjustments to reconcile net income to net cash provided by operations:
         Depreciation and amortization                                                          776,680                901,443
         Increase in deferred income taxes                                                     (122,800)              (208,000)
         Stock options issued for consulting services                                                                   40,840
         Decrease (increase) in accounts receivable                                              27,833                (29,828)
         Increase in other current assets                                                        (4,788)               (28,461)
         (Decrease) increase in income taxes payable                                            (14,875)               160,875
         Increase in accounts payable and accrued expenses                                       43,655                 11,026
         Decrease in accrued interest                                                           (92,914)                (2,817)
         (Decrease) increase in accrued property taxes                                          (61,476)                48,990
         Increase in payable to horsepersons                                                     29,733                 55,882
                                                                                         ------------------     -------------------
              Net cash provided by operations                                                 1,018,339              1,383,697

CASH FLOWS FROM INVESTING ACTIVITIES:
     Additions to property and equipment and other assets                                      (470,416)              (254,530)
     Proceeds from sale of property and equipment                                                                       33,091
                                                                                         ------------------     -------------------
         Net cash used in investing activities                                                 (470,416)              (221,439)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net (payments on) proceeds from borrowings under credit agreement                         (608,449)               608,449
     Net payments on advance from MHBPA                                                        (179,403)              (163,159)
     Proceeds from issuance of common stock                                                   1,217,810                 52,351
     Net payments on advance from shareholder                                                                       (1,651,942)
                                                                                         ------------------     -------------------
         Net cash provided by (used in) financing activities                                    429,958             (1,154,301)
                                                                                         ------------------     -------------------

NET INCREASE IN CASH                                                                            977,881                  7,957

CASH AT BEGINNING OF YEAR                                                                       372,171                364,214
                                                                                         ------------------     -------------------

CASH AT END OF YEAR                                                                      $    1,350,052        $       372,171
                                                                                         ==================     ===================

INTEREST PAID                                                                            $      127,101        $       120,968
                                                                                         ==================     ===================

INCOME TAXES PAID                                                                        $      213,748        $         4,700
                                                                                         ==================     ===================
</TABLE>

See notes to consolidated financial statements.


                                       26

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND  1998
--------------------------------------------------------------------------------

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         BUSINESS - Canterbury Park Holding Corporation (the Company) 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.

         The consolidated financial statements include the accounts of the
         Company and CPC after elimination of intercompany accounts and
         transactions.

         OPERATIONS - The Company's revenues are derived primarily from
         pari-mutuel wagering on simulcast and live horse races.

         ESTIMATES - The preparation of the consolidated financial statements in
         conformity with generally accepted accounting principles 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.

         DEPRECIATION - Property and equipment are depreciated on a
         straight-line basis over the estimated useful lives of the assets,
         generally 5 to 39 years.

         INTANGIBLE ASSETS - Intangible assets consist of organization and
         trademark costs and are amortized on a straight-line basis over 60
         months.

         UNCASHED WINNING TICKETS - Pari-mutuel tickets which are not cashed
         within one year of the end of the respective race meet become the
         property of the Company. The Company records revenue associated with
         the uncashed winning tickets at the time that, based on historical
         experience, management can reasonably estimate the amount of additional
         winning tickets from a race meet that will be presented for payment.

         PARI-MUTUEL TAXES - The first $12 million of pari-mutuel revenue is
         exempt from the 6% pari-mutuel tax. Pari-mutuel taxes are estimated for
         each 12 month period from July 1 through June 30, and an estimated
         annual effective tax rate is applied to all pari-mutuel commission
         revenues.


                                       27

<PAGE>

         ADVANCE FROM THE MINNESOTA HORSEMEN'S BENEVOLENT AND PROTECTIVE
         ASSOCIATION, INC. (THE "MHBPA") - The Minnesota Pari-Mutuel Horse
         Racing Act specifies that the Company is required to segregate a
         portion of funds (recorded as statutory purses in the statements of
         operations), received from 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 Minnesota
         Horsemens Benevolent and Protective Association (the "MHBPA"), the
         Company has transferred into a trust account or paid directly to the
         MHBPA, approximately $3,975,000 and $3,650,000 for the years ended
         December 31, 1999 and 1998, respectively, related to thoroughbred
         races. Amounts due to the MHBPA are guaranteed by the Chairman of the
         Board. Minnesota Statutes specify that amounts transferred into the
         trust account are the property of the trust and not of the Company. The
         interest rates on any statutory purses accrued but not transferred into
         the trust were 8.50% and 7.75% at December 31, 1999 and 1998,
         respectively.

         SHORT-TERM BORROWINGS - The weighted average interest rates on
         short-term borrowings at December 31, 1999 and 1998 are 8.50% and
         7.75%, respectively. The weighted average rates for 1999 and 1998 were
         7.93% and 8.51%, respectively.

         INCOME TAXES - Prior to the completion of the Company's initial public
         offering of its common stock, the Company was taxed as a "small
         business corporation" under Subchapter S of the Internal Revenue Code.
         As a result, any income tax liability or benefit was being passed
         through to the individual shareholders and no income taxes payable or
         income tax expenses were recorded in the consolidated financial
         statements. Simultaneous with the Company's completion of the public
         offering of its common stock, the Company's Subchapter S election was
         terminated. A portion of the losses accumulated prior to the public
         offering is not available to offset future earnings. The Company
         currently accounts for income taxes in accordance with Statement of
         Financial Accounting Standards (SFAS) No. 109, ACCOUNTING FOR INCOME
         TAXES.

         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 and
         warrants.

         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 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. To
         date, management has determined that no impairment of these assets
         exists.

         COMPREHENSIVE INCOME - Effective January 1,1998 the Company adopted
         Statement of Financial Accounting Standards (SFAS) No. 130, REPORTING
         COMPREHENSIVE INCOME, which establishes standards for reporting and
         display of comprehensive income and its components in a full set of
         financial statements. Comprehensive income includes all changes in
         stockholders' equity except those resulting from investments by and
         distributions to owners. SFAS No. 130 is not currently applicable for
         the Company because the Company did not have any items of other
         comprehensive income in any of the periods presented.


                                       28

<PAGE>

         RECENTLY ISSUED ACCOUNTING STANDARDS - SFAS No. 133, ACCOUNTING FOR
         DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, was issued in June 1998.
         SFAS No. 133 provides a comprehensive standard for the recognition and
         measurement of derivatives and hedging activities. The standard
         requires all derivatives to be recorded on the balance sheet at fair
         value and establishes special accounting for three types of hedges.
         SFAS No. 133 is effective for the Company year beginning January 1,
         2001. The Company is currently assessing the impact on the Company's
         financial position and results of operations.

2.       PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>

                                                                                      1999                     1998
           <S>                                                                <C>                       <C>
           Land                                                               $        3,617,865        $        3,617,865
           Buildings and building improvements                                         2,998,705                 2,883,817
           Furniture and equipment                                                     5,920,083                 5,588,999
                                                                              ---------------------     --------------------
                                                                                      12,536,653                12,090,681
           Accumulated depreciation                                                   (4,452,222)               (3,704,242)
                                                                              ---------------------     --------------------
                                                                              $        8,084,431        $        8,386,439
                                                                              ---------------------     --------------------
</TABLE>

3.       INCOME TAXES

         A reconciliation between income taxes computed at the statutory federal
         income tax rate and the effective tax rate is as follows:

<TABLE>
<CAPTION>

                                                                                         1999                     1998
           <S>                                                                    <C>                      <C>
           Federal tax expense computed at statutory rate                         $          195,000       $          135,000
           Decrease in valuation allowance                                                  (130,000)                (217,000)
           Nondeductible lobbying expense                                                     34,000                   27,000
           State expense, net of federal impact                                               35,000                   30,000
           Other                                                                             (13,000)                 (22,000)
                                                                                  --------------------     --------------------
                                                                                  $          121,000       $          (47,000)
                                                                                  --------------------     --------------------
</TABLE>

         Income tax expense for the years ended December 31, 1999 and December
         31, 1998 consists of the following:

<TABLE>
<CAPTION>

                                                                                         1999                     1998
           <S>                                                                    <C>                      <C>
           Current
                Federal                                                           $          197,800       $          132,000
                State                                                                         46,000                   29,000
                                                                                  --------------------     --------------------
                                                                                             243,800                  161,000
           Deferred, primarily Federal                                                      (122,800)                (208,000)
                                                                                  --------------------     --------------------
                                                                                  $          121,000       $          (47,000)
                                                                                  --------------------     --------------------
</TABLE>


                                       29

<PAGE>

         Temporary differences, tax carryforwards and the valuation allowance at
         December 31 are as follows:

<TABLE>
<CAPTION>

                                                                                         1999                     1998
           <S>                                                                    <C>                      <C>
           Operating loss carryforward                                            $          127,000       $          262,000
           Federal / State AMT Benefit                                                       256,800                  165,000
           Tax depreciation greater than book depreciation                                  (131,000)                (174,000)
           Repairs capitalized                                                                 8,000                   10,000
           Other                                                                              70,000                   75,000
           Valuation allowance                                                                                       (130,000)
                                                                                  --------------------     --------------------
                                                                                  $          330,800       $          208,000
                                                                                  --------------------     --------------------
</TABLE>

         The benefit of deferred tax assets was offset by a valuation allowance
         at December 31, 1998 of $130,000 because future realization was
         uncertain. At December 31, 1999, management determined that based on
         recent and projected profitability, it was more likely than not that
         the deferred tax asset would be utilized in the future and thus
         eliminated it's valuation allowance. The Company has federal income tax
         net operating loss carryforwards of approximately $307,000 at December
         31, 1999 which expire in 2010 through 2011.

4.       STOCKHOLDERS' EQUITY

         EMPLOYEE STOCK PURCHASE PLAN:

         On April 3, 1995, the Board of Directors adopted the 1995 Employee
         Stock Purchase Plan. The plan, which is open to all employees of the
         Company working more than 15 hours per week, commenced on April 15,
         1995 and will continue for ten years. The plan consists of one-year
         phases. The phases commence on October 1 of each year. Under the terms
         of the plan, employees may set aside a portion of their payroll
         earnings to purchase shares of the Company's common stock at the lower
         of 85% of the fair market value of the shares on the commencement date
         of each phase or 85% of the fair market value on the termination date
         of each phase. The plan provides for the sale of up to 100,000 shares.
         The plan issued 18,782 and 12,544 shares in 1999 and 1998,
         respectively.

         401(k) PLAN:

         On June 1, 1998 the Company established a defined contribution savings
         plan for employees who had completed one year of service, as defined in
         the Plan document. The defined contribution savings plan allows for
         employee compensation deferral contributions under Section 401(k) of
         the Internal Revenue Code and discretionary contributions by the
         Company. Employer contributions charged to operations in 1999 and 1998
         were approximately $26,000 and $15,000, respectively.

         STOCK OPTIONS:

         The Company has a stock option plan (the Stock Option Plan) which
         provides for the granting of awards in the form of stock options,
         restricted stock, stock appreciation rights, and deferred stock to key
         employees and nonemployees, including directors of and consultants to
         the Company and any subsidiary, to purchase up to a maximum of 850,000
         shares of common stock. Options that are granted under the plan may be
         either options that qualify as "incentive stock options" within the
         meaning of Section 422 of the Internal Revenue Code of 1986, as amended
         (Incentive Stock Options), or those that do not qualify as Incentive
         Stock Options (Non-Qualified Stock Options). The plan is administered
         by the Board of Directors, or a committee designated by the Board,
         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
         also provides for formula grants of Non-Qualified Stock Options to
         nonemployee directors of the Company.


                                       30

<PAGE>

         Stock option activity related to the Plan during the years ended
         December 31, 1999 and 1998 is summarized below:

<TABLE>
<CAPTION>
                                                          1999                                          1998
                                        ------------------------------------------    ------------------------------------------
                                                                   Weighted
                                                                   Average                                   Weighted Average
                                            Shares              Exercise Price             Shares             Exercise Price
                                        ----------------     ---------------------    -----------------    ---------------------
           <S>                              <C>              <C>                           <C>            <C>
           Outstanding at
             beginning of year                 367,725       $            2.50               263,500       $            2.47

           Granted                             147,000                    4.35               112,000                    2.55
           Exercised                           (81,225)                   2.63                (6,275)                   2.05
           Canceled                             (7,000)                   4.13                (1,500)                   2.50
                                        ----------------     ---------------------    -----------------    ---------------------

           Outstanding at end of
             year                              426,500       $            3.09               367,725       $            2.50
                                        ================     =====================    =================    =====================

           Options exercisable at
             end of year                       355,000       $            2.81               313,225       $            2.49
                                        ================     =====================    =================    =====================
</TABLE>

         In addition to options granted under the plan, in June 1994 the Company
         issued options to purchase 73,000 shares of common stock to certain
         individuals who were instrumental in assisting the Company commence
         operations. During 1999, 67,500 of the 69,500 options outstanding were
         exercised prior to their expiration in August 1999.

         In 1997, the Company issued an option to purchase 50,000 shares of
         common stock at an exercise price of $3.75 per share, for consulting
         services. The option was valued at $88,176, of which $22,044 was
         recognized in the 1998 statement of operations and $66,132 was
         recognized in 1997. The option expires March 31, 2000.

         The Company also issued options in 1998 and 1997 to purchase 15,000 and
         12,500 shares of common stock, respectively, to a Board member for
         consulting services. The exercise prices of the options are $2.625 and
         $3.25 per share, respectively. The options were valued at $18,796 and
         $19,926 and were recognized in the 1998 and 1997 statements of
         operations, respectively. The option issued in 1997 was exercised
         during 1999. The option issued in 1998 expires in September 2001.

         In 1994, the Chairman of the Board was granted an option to purchase
         51,825 shares at $2.64 per share. This option was exercised during
         1999.

         At December 31, 1999, the weighted average remaining contractual life
         of all options was 79 months, and the range of exercise prices was
         $1.75 to $6.00.

         The following table summarizes information concerning options
         outstanding and exercisable options as of December 31, 1999:

<TABLE>
<CAPTION>
                                                     Weighted
                                                     Average         Weighted
                                                     Remaining       Average                          Weighted
                                        Shares       Contractual     Exercise       Shares            Average
          Range of Exercise Price     Outstanding    Life in Years   Price          Exercisable    Exercise Price
          --------------------------------------------------------------------------------------------------------
          <S>                         <C>            <C>             <C>            <C>            <C>
              $     1.75 - 2.50          222,400             6.94     $     2.16        222,400     $     2.16
          --------------------------------------------------------------------------------------------------------
                    2.50 - 4.00          137,600             3.48           3.53        137,600           3.53
          --------------------------------------------------------------------------------------------------------
                    4.00 - 6.00          131,500             9.18           4.38         60,000           4.31
          --------------------------------------------------------------------------------------------------------
</TABLE>

                                       31
<PAGE>

         In 1996, the Company adopted Statement of Financial Accounting
         Standards No. 123 (SFAS 123), "Accounting for Stock-Based
         Compensation." As permitted by SFAS 123, the Company has elected to
         continue following the guidance of APB 25 for measurement and
         recognition of stock-based transactions with employees. No compensation
         cost has been recognized for stock options issued under the Stock
         Option Plan because the exercise price of all options granted was at
         least equal to the fair value of the common stock at the date of grant.
         If compensation cost for the Company's stock option and employee stock
         purchase plans had been determined based on the fair value at the grant
         dates, consistent with the method provided in SFAS 123, the Company's
         net income and earnings per share would have been as follows:

<TABLE>
<CAPTION>

                                                                        1999                      1998
                                                                ---------------------     ---------------------
           <S>                                                  <C>                       <C>
           Net Income:
                As reported                                     $        437,291          $        433,747
                Pro forma                                                106,181                   212,052

           Basic Earnings Per Share:
                As reported                                     $            .14          $            .14
                Pro forma                                                    .03                       .07

           Diluted Earnings Per Share:
                As reported                                     $            .13          $            .14
                Pro forma                                                    .03                       .07
</TABLE>

         The fair value of options granted under the Stock Option Plan during
         1999 and 1998 were estimated on the date of grant using the
         Black-Scholes option-pricing model with the following weighted average
         assumptions and results:

<TABLE>
<CAPTION>

                                                                        1999                      1998
                                                                ---------------------     ---------------------
           <S>                                                      <C>                       <C>
           Dividend yield                                                  None                      None
           Expected volatility                                              41%                       78%
           Risk-free interest rate                                        5.50%                     5.86%
           Expected life of option                                      120 mo.                   120 mo.
           Fair value of options on grant date                      $   442,098               $   245,173
</TABLE>

         WARRANTS:

         In 1994, the Company issued warrants to purchase 400,000 shares of
         common stock at an exercise price of $4.00 to the Company's founders in
         consideration for services performed. The warrants expired in August
         1998 unexercised. Also, warrants to purchase 1,437,300 shares of common
         stock related to the initial public offering which were exercisable at
         $4.88 per share expired in August 1998 unexercised.

         In 1999, the Company's selling agents exercised warrants to purchase
         120,000 shares of common stock at an exercise price of $4.80 per share
         in August 1999, and the remaining five thousand warrants expired
         unexercised.

         The Company's Articles of Incorporation provide that the Company may
         redeem, at fair market value, securities held by any person or entity
         whose status as a security holder, in the opinion of the Board of
         Directors of the Company, may result in the disapproval, modification,
         or nonrenewal of any contract or the loss or nonreinstatement from any
         governmental agency of any license or franchise held by the Company or
         any of its subsidiaries, which license or franchise is conditioned upon
         some or all of the holders of capital stock meeting certain criteria.


                                       32

<PAGE>

5.       EARNINGS PER SHARE

<TABLE>
<CAPTION>

                                             Year Ended December 31, 1999                     Year Ended December 31,1998
                                     ----------------------------------------------  ----------------------------------------------
                                        Income           Shares         Per Share       Income           Shares         Per Share
                                     (Numerator)     (Denominator)       Amount       (Numerator)     (Denominator)      Amount
                                     -------------   ---------------   ------------  --------------  ----------------  ------------
          <S>                        <C>             <C>               <C>           <C>              <C>              <C>
          Net Income                 $   437,291                                     $   433,747
                                     =============                                   ==============

          Basic EPS
          ---------
          Income available
            to common
            stockholders                 437,291         3,178,426     $      .14        433,747         3,005,164     $      .14
                                     =============                     ============  ==============                    ============

          Effect of dilutive
          ------------------
          securities
          ----------
          Stock options                                    168,206                                          83,889
                                                     ---------------                                 ----------------

          Diluted EPS
          -----------
          Income available
            to common stock-
            holders                  $   437,291         3,346,632     $      .13    $   433,747         3,089,053     $      .14
                                     =============   ===============   ============  ==============  ================  ============
</TABLE>

         Options to purchase 6,000 shares of common stock at a weighted average
         exercise price of $6.00 per share were outstanding during 1999 but were
         not included in the computation of diluted EPS because the options'
         exercise prices were greater than the average market price of the
         common shares

6.       LINES OF CREDIT

         On June 11, 1998 the Company paid off its line of credit with the
         Chairman of the Board and terminated its line of credit agreement. This
         line of credit was replaced by a commercial revolving credit line with
         Bremer Bank, N.A.. Interest charged to operations under the line of
         credit with the Chairman of the Board was approximately $43,000 for the
         period ended December 31, 1998.

         The Company entered into a general credit and security agreement with
         Bremer Bank, N.A., a financial institution located in South Saint Paul,
         Minnesota, on June 3, 1998. Borrowings under the credit agreement
         include a commercial revolving credit line which provides for maximum
         advances of $2,250,000 with interest at the prime rate (8.50% at
         December 31, 1999). Interest charged to operations under this line of
         credit was approximately $4,000 and $27,000, for the periods ended
         December 31, 1999 and December 31, 1998, respectively. The weighted
         average interest rate on the line of credit was 7.75% in 1999 compared
         to 8.53% for all lines of credit utilized in 1998. The credit agreement
         contains covenants requiring the Company to maintain certain financial
         ratios. The Company was in compliance with these requirements as of
         December 31, 1999. The Company's current loan arrangements prohibit the
         payment of dividends without the bank's consent.

7.       OPERATING LEASES AND COMMITMENTS

         The Company leases certain copying equipment under an operating lease,
         which requires monthly payments of $5,560. Future payments of the
         lease, which expires in February 2001, are $72,280. Rental expenses
         charged to operations were approximately $61,160 for the period ended
         December 31, 1999.

         In addition, in January 1999 the Company entered into a five-year
         totalizator services agreement with Autotote Systems, Inc. (Autotote).
         Pursuant to the agreement, Autotote provides totalizator equipment and
         computer programs which record and process all wagers and calculate the
         odds and payoffs. For such services, Autotote receives a fee of
         approximately .45% of the gross monies wagered. Amounts charged to
         operations under this agreement for the years ended December 31, 1999
         and 1998 were approximately


                                       33

<PAGE>

         $325,000 and $306,000, respectively. During the 1999 and 1998 live race
         meets, Autotote provided uplink services which enabled the Company to
         simulcast horse races held at Canterbury Park to out-of-state
         racetracks. These services resulted in an amount charged to operations
         in 1999 and 1998 of approximately $115,000 and $102,000, respectively.
         A director of the Company is the regional sales manager of Autotote.

8.       CONTINGENCIES

         In connection with the purchase of JRI (note 1), 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 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 recorded as an increase to the
         purchase price. 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.

9.       RELATED-PARTY TRANSACTIONS

         The president/director and two other directors have guaranteed
         performance by the Company under a $500,000 bond issued to the
         Minnesota Racing Commission.

         In 1999 and 1998, the Company paid $40,000 to a Board member for
         advertising and marketing services provided to the Company. This Board
         member was also granted 15,000 stock options in 1998 and 12,500 stock
         options in 1997 (refer to Note 4).

10.      OPERATING SEGMENTS

         The Company has two reportable operating segments: horse racing and
         concessions. The horse racing segment includes simulcast and live
         racing operations. The concessions segment provides concessions during
         simulcast racing, live racing and 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 horse
         racing segment is regulated by the State of Minnesota Racing
         Commission.

         The accounting policies of the operating segments are the same as those
         described in the summary of significant accounting policies.

         All depreciation, interest expense and income taxes are recorded in the
         horse racing segment and no allocation is made to concessions for
         shared facilities. However, the concessions segment pays approximately
         25% of gross revenues to the horse racing segment for use of the
         facilities.


                                       34

<PAGE>

         The following table provides information about the Company's operating
         segments (in 000's):

<TABLE>
<CAPTION>

                                             Year Ended December 31, 1999                   Year Ended December 31,1998
                                     ---------------------------------------------  --------------------------------------------
                                     Horse Racing     Concessions       Total       Horse Racing    Concessions        Total
                                     --------------  --------------  -------------  -------------  ---------------  -------------
          <S>                        <C>              <C>               <C>         <C>             <C>                <C>
          Revenues from external
               customers                 $17,255           $3,076       $20,331        $16,494        $2,701           $19,195
          Intersegment revenues              806                            806            725                             725
          Net interest expense                (6)                            (6)          (111)                           (111)
          Depreciation and
               amortization                  777                            777            901                             901
          Segment income before
               income taxes                  545              191           736            377            62               439

          Segment Assets                 $10,135             $411       $10,546         $9,347          $240            $9,587
                                     ==============  ==============  =============  =============  ===============  =============
</TABLE>

         Included in horse racing segment revenues for the years ended December
         31, 1999 and 1998 is approximately $616,000 and $680,000, respectively,
         for rental of the racing facility for special events and storage.

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

<TABLE>
<CAPTION>

                                                                                    1999                    1998
                                                                             -------------------     -------------------
         <S>                                                                 <C>                     <C>
         REVENUES
           Total revenue for reportable segments                                        $21,137                 $19,920
           Elimination of intersegment revenues                                            (806)                   (725)
                                                                             ===================     ===================
                    Total consolidated revenues                                          20,331                  19,195
                                                                             ===================     ===================

         INCOME BEFORE INCOME TAXES
           Total segment income before income taxes                                        $736                    $439
           Elimination of intersegment income before income taxes                          (178)                    (53)
                                                                             ===================     ===================
                    Total consolidated income before income taxes                           558                     386
                                                                             ===================     ===================

                                                                             December 31, 1999       December 31, 1998
                                                                             -------------------     -------------------
         ASSETS
           Total assets for reportable segments                                         $10,546                  $9,587
           Elimination of intercompany receivables                                         (357)                   (169)
                                                                             ===================      ==================
                    Total consolidated assets                                            10,189                   9,418
                                                                             ===================      ==================
</TABLE>


                                       35

<PAGE>



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not Applicable.

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

         Information required under this item with respect to the directors will
         be set forth in a section captioned "Election of Directors" in the
         Company's Proxy Statement for the Annual Meeting of Shareholders to be
         held on June 1, 2000 (the "2000 Proxy Statement"), a definitive copy of
         which will be filed with the Commission within 120 days of the close of
         the 1999 fiscal year, which information is incorporated herein by
         reference. Information regarding executive officers is presented under
         Item 1 herein.

ITEM 10. EXECUTIVE COMPENSATION

         Information required under this item will be set forth in a section
         entitled "Executive Compensation" in the Company's 2000 Proxy Statement
         which information is incorporated herein by reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Information required under this item will be set forth in a section
         entitled "Shareholdings of Principal Shareholders and Management" in
         the Company's 2000 Proxy Statement which information is incorporated
         herein by reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information required under this item will be set forth in a section
         entitled "Certain Transactions" in the Company's 2000 Proxy Statement
         which information is incorporated herein by reference.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      EXHIBITS. See Exhibit Index at page 38 which is incorporated herein by
         reference. Exhibits that cover management contracts or compensatory
         plans or arrangements are marked with an asterisk (*) on the Exhibit
         Index.

(b)      REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the
         fourth quarter of 1999.


                                       36

<PAGE>

                                   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, 2000                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,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the date set forth above.

                                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 or all amendments to this Annual Report on
Form 10-KSB 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.

<TABLE>
<CAPTION>

             SIGNATURE                                        TITLE                                       DATE
             ---------                                        -----                                       ----
<S>                                            <C>                                                 <C>
/s/Curtis A. Sampson                           Chairman of the Board                               March 30, 2000
-------------------------------------
Curtis A. Sampson

/s/ Dale H. Schenian                           Director; Vice Chairman                             March 30, 2000
-------------------------------------
Dale H. Schenian

/s/ Randall D. Sampson                         Chief Executive Officer, President,                 March 30, 2000
-------------------------------------          Chief Financial Officer, General
Randall D. Sampson                             Manager, Treasurer and Director

/s/ Brian C. Barenscheer                       Director                                            March 30, 2000
-------------------------------------
Brian C. Barenscheer

/s/ Gibson Carothers                           Director                                            March 30, 2000
-------------------------------------
Gibson Carothers

/s/ Terence McWilliams                         Director                                            March 30, 2000
-------------------------------------
Terence McWilliams

/s/ Carin Offerman                             Director                                            March 30, 2000
-------------------------------------
Carin Offerman

/s/ Judith M. Dahlke                           Chief Accounting Officer                            March 30, 2000
-------------------------------------
Judith M. Dahlke
</TABLE>


                                       37

<PAGE>

               CANTERBURY PARK HOLDING CORPORATION AND SUBSIDIARY

                                Exhibit Index To
                Form 10-KSB for the Year Ended December 31, 1999

<TABLE>
<CAPTION>

   Regulation S-B                                                                   Location in Consecutive Numbering
   Exhibit Table                                                                    System as Filed with the Securities and
     Reference             Title of Document                                        Exchange Commission
---------------------      --------------------------------------------------       --------------------------------------------
   <S>                     <C>                                                      <C>
        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.

        4.1                Warrant Agreement between the Company and the            Filed as Exhibit 4.1 to the SB-2
                           Warrant Agent                                            Registration Statement and incorporated
                                                                                    herein by reference.

        10.1               Plan of Reorganization dated as of May 20, 1994          Filed as Exhibit 10.1 to the SB-2
                           between Canterbury Park Holding Corporation and          Registration Statement and
                           Canterbury Park Concessions, Inc.                        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            Filed as Exhibit 10.3 to the SB-2 Inc.
                           Horsemen's Benevolent and Protective Association,        Registration Statement and incorporated
                           to Minnesota Racing Commission waiving 125               herein by reference.
                           day racing minimum

        10.4               Totalizator Services Agreement dated May 2, 1994         Filed as Exhibit 10.4 to the SB-2
                           between Autotote Systems, Inc. and Canterbury            Registration Statement and incorporated
                           Park Holding Corporation.                                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.


<PAGE>


   Regulation S-B                                                                   Location in Consecutive Numbering
   Exhibit Table                                                                    System as Filed with the Securities and
     Reference             Title of Document                                        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.

        10.8               Form of Founders' Warrants                               Filed as Exhibit 10.8 to the SB-2
                                                                                    Registration Statement and incorporated
                                                                                    herein by reference.


        10.9               Curtis A. Sampson Warrant                                Filed as Exhibit 10.9 to the SB-2
                                                                                    Registration Statement and incorporated
                                                                                    herein by reference.

       10.10               General Credit and Security Agreement dated as of        Filed as Exhibit 10.10 to the Form
                           June 3, 1998 between Canterbury Park Holding             10-KSB for the fiscal year ended
                           Corporation and Bremer Bank N.A. (previously             December 31, 1998.
                           First American Bank, N.A.)  This exhibit 10.10
                           replaces exhibit 10.10 filed previously as an
                           exhibit to the SB-2 Registration Statement.


       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.

       10.12               Compensatory Employee and Advisor Stock Plan             Filed as Exhibit 4.2 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.


       10.13               Stock Option Plan for Non-Employee Consultants           Filed as Exhibit 4.3 to the
                           and Advisors                                             Registration Statement on Form S-8 of
                                                                                    the Company filed on August 28, 1997
                                                                                    (File No. 333-34509) and incorporated
                                                                                    herein by reference.

         21                Subsidiary of the Registrant                             Filed herewith at page 40.

         23                Independent Auditors' Consent                            Filed herewith at page 41.

         24                Power of Attorney                                        Included in signature page at page 37.
</TABLE>

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 Canterbury Park Holding
Corporation at the executive offices of the Company.


                                       39