Item 1.01 - Entry into a Material Definitive Agreement

As reported in a Form 8-K Report dated June 4, 2012, Canterbury Park Holding Corporation ("Company") entered into a Ten-Year Cooperative Marketing Agreement ("Agreement") with the Shakopee Mdewakanton Sioux Community ("SMSC"), a federally recognized Indian tribe, on June 4, 2012. More detailed information regarding the terms of the Agreement is set forth in the Form 8-K Report dated June 4, 2012, and such information is incorporated by reference into this report. The following provides information with respect to developments related to the Agreement subsequent to June 4, 2012.

The Agreement became effective in accordance with its terms on June 15, 2012, which was the first business day following the day three conditions precedent to the Agreement becoming effective were satisfied. The conditions and satisfaction of the conditions were as follows:

· First, as required by the Agreement, a Horse Association Agreement in a form satisfactory to SMSC was supplied to SMSC on June 4, 2012.

· Second, effectiveness of the Agreement was conditioned upon it being approved by the Minnesota Racing Commission, and such approval was given on June 13, 2012.

· Third, effectiveness of the Agreement was conditioned upon the Company delivering either warrants or stock appreciation rights with respect to 165,000 shares of Company common stock, and this condition was satisfied on June 14, 2012 when the Company delivered a Stock Appreciation Right Agreement (the "SAR Agreement") to SMSC, which is further described below.

Concurrent with effectiveness of the Agreement, SMSC fulfilled its 2012 obligations under the Agreement (i) by paying $2.7 million to enhance purses for the Company's 2012 live horse racing meet, and (ii) by paying $300,000 to the Company to support joint marketing activities of the Company and SMSC.

The SAR Agreement referred to above grants rights to SMSC (the "Rights") to benefit from the appreciation in the value of 165,000 shares of Company common stock above $14.30 per share. Each Right represents the right to be paid the appreciation in the value of one share of stock above $14.30. Ten percent of the Rights (16,500 Rights) vested immediately and the remaining Rights vest at the rate of 16,500 Rights per year beginning in 2013. As the Rights become vested and are exercised, the rights may only be settled in cash; and SMSC shall have no right to acquire Company common stock pursuant to the SAR Agreement. The SAR Agreement and all Rights granted thereunder expire on December 31, 2022.

The Agreement and the SAR Agreement will each be attached as an exhibit to the Company's Report on Form 10-Q for the period ended June 30, 2012.