Churchill Downs Acquires Assets of Colonial Downs’ Parent Company in nearly $2.5B Deal

Churchill Downs Acquires Assets of Colonial Downs’ Parent Company in nearly $2.5B Deal

By Ron Fritz

Churchill Downs Inc. (CDI) announced Tuesday that it is acquiring Virginia’s signature racetrack — Colonial Downs Racetrack — and six Rosie’s Gaming Emporium historical horse racing facilities across the state.

The Louisville, Kentucky-based gaming company, known for its signature event, the Kentucky Derby, has agreed to purchase the assets of Peninsula Pacific Entertainment (P2E) for $2.485 billion, according to a news release. In addition to the assets in Virginia, CDI will acquire a casino in New York as well as the operations of its Sioux City, Iowa, casino.

The deal must be approved by the Virginia Racing Commission, the New York State Gaming Commission and the Iowa Racing and Gaming Commission. The transaction is expected to close by the end of 2022, the release said.

In addition to the historical horse racing machines, Virginia sports betting is thriving since launching just over a year ago.

“This unique set of assets expands our geographic footprint and provides additional scale,” Bill Carstanjen, chief executive officer of CDI, said in the release. “P2E has done an exceptional job developing and managing this collection of assets, which we are very excited to acquire and plan to strategically grow in the years ahead.”

Churchill Downs Inc. owns and operates three pari-mutuel gaming entertainment venues having about 3,050 historical racing machines in Kentucky, the release said. It also owns and operates TwinSpires, an online wagering platforms for horse racing, sports and iGaming and has nine retail sportsbooks.

The Kentucky Derby is held at Churchill Downs on the first Saturday in May.

Colonial Downs is Big in VA

In addition to Colonial Downs Racetrack, a Thoroughbred racing facility in New Kent, the six Rosie’s Gaming Emporium historical horse racing facilities are located in Collinsville, Dumfries, Hampton, New Kent, Richmond and Vinton.

There are about 2,700 historical racing machines at the six facilities, the release said. The deal increases the geographic diversity of CDI’s live and historical horse racing venues.

More VA Details

Under Virginia law, CDI will have the opportunity to develop up to five additional historical racing entertainment venues in Virginia with up to 2,300 additional historical horse racing machines, the release said.

CDI can also build a large gaming resort called the “Dumfries Project,” with up to 1,800 machines in northern Virginia. P2E planned to invest up to $400 million to build the initial phase of the Dumfries Project, scheduled to open in 2023.

CDI also acquires the rights to develop a Rosie’s Gaming Emporium in Emporia, the seventh historical racing entertainment venue under the Colonial Downs license, the release said. The Emporia facility, located along I-95 near the North Carolina border, will have 150 machines and is expected to open in 2023.

Also, included in the P2E deal are the rights to build a casino in Richmond in partnership with Urban One. The casino project was defeated in a referendum on the November 2021 ballot.

Other Venues in the Deal

CDI is acquiring two well-known casinos in states with legal online sports betting:

The del Lago Resort & Casino in located in Waterloo, New York. It is a 96,000-square-foot casino with about 1,700 slot machines, 80 table games, a 205-room hotel, nine restaurants/bar areas, a 6,000-square foot DraftKings retail sportsbook a 2,400-seat entertainment venue, and a 7,200-square-foot outdoor event venue.

The Hard Rock Hotel & Casino in Sioux City is a 45,000-square-foot casino with 639 slot machines, 20 table games, a 54-room hotel, two live entertainment venues, a 100-piece music memorabilia collection and a Hard Rock Sportsbook.

Under the terms of the agreement, P2E is expected to sell the real property associated with Hard Rock Sioux City to a third party, the release said. CDI is buying the operating company and will lease the Sioux City property from the third party. If the property can’t be sold by a certain date, the Sioux City property will be included in the CDI deal and the total price will increase to $2.75 billion.

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WRITTEN BY
VirginiaIsForBettors.com
Ron Fritz
Ron is managing editor of VirginiaIsForBettors.com. He spent nearly 13 years at The Baltimore Sun, including 12 as sports editor. He previously was sports editor at The News Journal in Wilmington, Delaware, for nearly eight years after serving as a news editor there for four years.
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Ron is managing editor of VirginiaIsForBettors.com. He spent nearly 13 years at The Baltimore Sun, including 12 as sports editor. He previously was sports editor at The News Journal in Wilmington, Delaware, for nearly eight years after serving as a news editor there for four years.
... Read More