The Manitoba Jockey Club says finance minister Stan Struthers knew the "catastrophic" repercussions it would cause by cutting $5 million from the budget of Assiniboia Downs.
MJC lawyer Jeffrey Rath told Court of Queen's Bench Justice Robert Dewar that Struthers told the jockey club it would be best for them to agree to turn the Downs over to the Red River Exhibition.
Rath said Struthers and an assistant also told officials with the jockey club it was "stupid" for the Downs to go into a partnership with Peguis First Nation to build a hotel at the site.
"This is an attempt by the minister to put as much pressure on the jockey club as possible so it turns over the land and facility to the Red River Ex without any compensation," he said.
"The minister himself expected the cuts were going to be catastrophic enough the jockey club would have to turn the assets over to the Red River Ex."
The recent provincial budget indicated $5 million would be cut through changes to the Pari-Mutuel Levy Act and the Manitoba Jockey Club VLT Siteholder Agreement, but doesn't say which portion would come from either one.
The horse racing season begins on May 5.
The hearing, which will also hear from provincial government lawyers, is expected to take most of today.