Churchill Downs Stakes Its Claim in Pennsylvania
Churchill Downs Incorporated announced this morning that it has signed an asset purchase agreement to assume management of Lady Luck Casino Nemacolin in Farmington, PA from Eldorado Resorts Inc.
The asset purchase agreement is conditional upon the finalization of another previously-announced agreement for Churchill Downs to acquire Presque Isle Downs & Casino in Erie, PA for $179.8 million, also from Eldorado Resorts Inc.
Churchill Downs has been expanding its presence across the United States for some time now. Earlier this year, Churchill Downs reached an agreement with Eldorado Resorts to acquire Presque Isle Downs & Casino in Pennsylvania and Lady Luck Casino in Mississippi for $229.5 million. Both casinos exist in states that have passed legislation to legalize sports betting.
The deal to purchase Presque Isle in PA and Lady Luck in MS as a package fell through after the FTC expressed antitrust concerns. For what it’s worth, Churchill Downs Inc also owns the Riverwalk Casino which is adjacent to the Lady Luck Vicksburg.
After the FTC asked Churchill Downs and Eldorado Resorts for additional information regarding the deal, the companies mutually decided to end the deal after deciding the time and expense of responding to the FTC’s request would be significant.
Churchill Downs paid Eldorado Resorts a $5 million termination fee as written into their original agreement. The Presque Isle purchase will still go through as originally planned, but now Churchill Downs and Eldorado have altered the deal to scrap the sale of the Lady Luck Vicksburg and instead transfer operations of Lady Luck Nemacolin in Pennsylvania to Churchill Downs for $100,000.
In other words, Churchill Downs Inc will gain control of two casinos in Pennsylvania once this deal is completed. Churchill Downs will outright own Presque Isle Downs & Casino and will take over management of Lady Lucky in Farmington.
In a press release, Churchill Downs Inc said the closure of this deal is conditional upon the receipt of gaming licenses from the Pennsylvania Gaming Control Board and a racing license from the state Horse Racing Commission. If all goes well, the company expects to complete the transaction in the fourth quarter of 2018.
Churchill Downs Positioning Itself in the US Sports Betting Market
Churchill Downs Inc, most famously known for hosting the annual Kentucky Derby and operating horse racing site TwinSpires.com, is intent on entering the US sports betting market and has made several moves of late bringing the company closer to that goal.
Just two days after the Supreme Court ended the federal sports betting prohibition, Churchill Downs announced a partnership with the Golden Nugget Casino to run an online sportsbook and casino in New Jersey. A statement issued at the time stated Churchill Downs plans to begin taking wagers online in the first quarter of 2019.
Churchill Downs also announced on that same day that it has reached an agreement with online gaming platform SBTech to enter the online gaming and sports betting markets in New Jersey, Pennsylvania and Mississippi.
With today’s deal, Churchill Downs is set to have a presence in three states that have legalized sports betting since the May Supreme Court decision:
- New Jersey Sports Betting via deal with the Golden Nugget in Atlantic City
- Pennsylvania Sports Betting via Lady Luck Casino Nemacolin and Presque Isle Downs
- Mississippi Sports Betting via Riverwalk Casino in Vicksburg (owned by Churchill Downs since 2012)
Mike Murphy is the founder of BettingUSA.com and has over 10 years of experience in the legal gambling industry. A regular attendee of industry trade shows and conferences, Mike is a strong proponent in the idea of a well regulated online betting industry.
