- Churchill Downs Inc. will purchase ‘substantially all of the assets’ of Richmond, Virginia based gaming company Peninsula Pacific Entertainment for 2.5 billion USD.
- The highest profile properties involved in the deal are the Colonial Downs Racetrack in New Kent, Virginia, along with six “Rosie’s Gaming Emporium” horse racing facilities throughout Virginia.
- The deal includes the right to open additional off-track betting facilities in Virginia.
During the past couple of years, Churchill Downs Incorporated(CDI) has frequently been in the news for selling the property they own. This includes the land surrounding Calder Casino in Miami–land that was formerly the Calder Race Course–as well as Arlington Park near Chicago, purchased by the NFL Chicago Bears for a potential new stadium. Today, however, they were in the news for buying a racetrack–along with some other assets–via the purchase of Richmond, Virginia based Peninsula Pacific Entertainment.
CDI announced that they’ve entered into a ‘a definitive purchase agreement to acquire substantially all of the assets of Peninsula Pacific Entertainment LLC for total consideration of $2.485 billion’. CDI will receive the Colonial Downs Racetrack in Virginia, a chain of off track betting locations in the state (Rosie’s Gaming Emporium) as well as rights to expand their historical racing machine operations. They’ll also get the Lago Resort & Casino in New York and the Hard Rock Hotel & Casino in Iowa.
Bill Carstanjen, Chief Executive Officer of CDI, said that the purchase is intended to help the company scale as well as expanding their geographic reach:
“This unique set of assets expands our geographic footprint and provides additional scale. 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.”
Much of what CDI is getting from the purchase are developmental rights. They receive the right to develop up to five additional historical horse racing venues in Virginia which will add approximately 2,300 machines to their inventory. They also get rights to build a large gaming resort with 1,800 historical racing machines in Northern Virginia. They’ll also get the right to develop a Rosie’s Gaming Emporium location in Emporia, Virginia located along I-95 near the North Carolina border. This location will have 150 historical racing machines.
Peninsula Pacific will retain their gaming license in the state of Louisiana and their casino development rights in Iowa.
CDI included a helpful rundown of the gaming properties in the transaction and what they plan to do with it:
del Lago Resort & Casino in Waterloo, New York
CDI will acquire del Lago Resort & Casino (“del Lago”) in Waterloo, New York. del Lago is a 96,000 sq. ft. casino with approximately 1,700 slot machines, 80 table games, a 205-room hotel, nine restaurants / bar areas, 758 covered parking spaces, a 6,000 sq. ft. sportsbook area, a 2,400-seat entertainment venue, and a 7,200 sq. ft. outdoor event venue.
Hard Rock Hotel & Casino in Sioux City, Iowa
CDI will acquire the operations of Hard Rock Hotel & Casino in Sioux City, Iowa (“Hard Rock Sioux City”). Hard Rock Sioux City is a 45,000 sq. ft. casino with 639 slot machines, 20 table games, a 54-room hotel, 1,511 parking spaces with 530 covered, two live entertainment venues, a 100-piece music memorabilia collection, and a Hard Rock-branded sportsbook.
Under the terms of the P2E Transaction, P2E is expected to reach a definitive agreement to sell the real property associated with Hard Rock Sioux City (“Sioux City Property”) to a third party. CDI will acquire the operating company and lease the Sioux City Property from that third party. Following the closing, CDI will operate Hard Rock Sioux City and lease the Sioux City Property pursuant to lease terms negotiated prior to the closing. In the event P2E is unsuccessful in reaching a definitive agreement with a third party to purchase the Sioux City Property by a certain date, the Sioux City Property will be included in the P2E Transaction and the total consideration will increase to $2.75 billion.
I’d expect the Sioux City, Iowa property to lose the Hard Rock branding as part of the sale/leaseback arrangement. CDI expects the deal to close by the end of 2022.