MINNEAPOLIS (WCCO) – Charlie Smith and his wife, Terry Propps, are a team. Propps makes the breeding decisions and Smith does the training.

“Just a little family operation,” Smith said.

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They’re from a little town in Texas called Annetta, but their horse is from right here in Minnesota.

“This is a little mare called Pecos, a little filly, two years [old],” Smith said, petting his prized horse’s face on a recent morning in the stable.

Pecos was born near Winona two years ago, the first time in 20-some years of doing this Smith and Propps have had horses born in Minnesota.

They’re among the growing number of owners who are deciding to bring their thoroughbred horses to Minnesota to give birth in the last two years, a development that’s had a big impact on the local thoroughbred breeding industry, and something that would have been hard to believe just three years ago.

“Bringing one up here to foal out was a little bit scary to us,” Smith said. “When you’ve got a pretty valuable mare, trying to deliver what you hope to be a pretty valuable foal, and you’re a little out of touch and out of the control of the situation. … So we went to some effort to make her Minnesota-bred.”

The effort was not without some motivation.

“Oh no question about that,” Smith said. “We wouldn’t have brought the horse all the way to foal out in Minnesota if it had not been for the Minnesota breeding situation.”

The Minnesota breeding situation in 2013 was offering something it had not in some time: hope.

For nearly a decade, it had been in sharp decline. In 2005, 344 thoroughbred foals were born in Minnesota. In 2012, it was a mere 96 — a record low. Declining purse money at Canterbury was the cause, and efforts to boost revenue by adding slot machines were getting blocked in the legislature. The Minnesota breeding industry was in crisis.

So Canterbury struck a deal with the tribe that runs Mystic Lake Casino. In exchange for dropping its push for slot machines, the tribe agreed to pump $75 million into purses over the next 10 years, adding a lot of new money to be made, especially for Minnesota-bred horses, which can win bonus money and run races restricted to Minnesota-breds.

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“It’s great for the local breeders,” Smith said. “It gives them an opportunity to run for some serious money.”

And breeding saw an immediate boost, bringing a lot of people like Smith and Terry to Minnesota to foal. After just 96 the year before, Pecos was one of 246 thoroughbred foals born in Minnesota in 2013. (The number increased to 249 in 2014).

“If you’re gonna run the horse for the summer, and can make an extra ten to fifteen thousand dollars here,” Smith said, “that makes a big difference at the end of the year on the money line.”

And now, that class of 2013 is racing for the first time – giving owners like Smith and Propps an opportunity to run for some serious money. Of those 246 foals, 104 are at Canterbury already.

This is what it looks like when hope becomes a reality.

“You just have to look around the barn, say five years ago versus now,” Smith said. “I think it’s huge. I think it’s made a world of difference.”

Especially for Smith and Propps. Pecos won the first 2-year-old Minnesota-bred race of the year this summer.

“I was very pleased with it,” Smith said.

Which means their trip home back to Texas might’ve gotten just a little easier.

“This owner is fairly good,” Smith said, laughing and pointing at Propps. “She only fires her trainer once or twice a year. But she’s pretty good at re-hiring him a few days later if he can make any kind of case for his conduct. … So even though I may blow the race, we can usually get it worked out in the couple hundred miles in the pickup going home.”

Critics of Canterbury’s deal with the tribe say the track settled for a fraction of what it could have made with slot machines, which would have also produced an estimated $100 million in new gambling tax revenue for the state.

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Canterbury says it tried for years to get the legislature to approve slots, but it couldn’t afford to wait any longer.