Churchill Downs Incorporated (CDI) will take possession of the assets of Peninsula Pacific Entertainment (P2E) for $2.49 billion (£1.84 billion/€2.19 billion).
Home > Casinos & Gaming > Churchill Downs Acquires Peninsula Pacific Entertainment for $2.5 Billion
Churchill Downs Acquires Peninsula Pacific Entertainment for $2.5 Billion
CDI will assume control of P2E’s properties in Virginia and New York, as well as its Hard Rock branded casino in Sioux City, Iowa.
The Virginia properties encompass Colonial Downs Racetrack and six Rosie’s Gaming Emporiums across the state, which offer historical horse racing machines. The company has the chance to construct five more Rosie’s locations in Virginia.
CDI also purchased the rights to develop a large gaming resort in the state, the Dumfries project. P2E had previously announced plans to invest up to $400 million in the initial phase of the project, which is planned to open in 2023.
The agreement also includes the rights to develop the ONE Casino and Resort in Richmond, Virginia, a project valued at $565 million. While the project made strides in 2021, it encountered a setback after voters narrowly rejected a referendum that would have permitted construction to commence.
Within the bustling metropolis of New York City, CDI is set to acquire the del Lago Resort and Casino. This extensive gambling establishment boasts a 96,000 square foot casino, featuring a dedicated 6,000 square foot sports betting zone. CDI’s foray into the sports betting arena is a collaborative effort with the renowned DraftKings.
Simultaneously, the underlying real estate of the Sioux City Hard Rock Hotel and Casino will be transferred to a third party. CDI will secure the operational rights from this undisclosed proprietor via a lease agreement.
The deal does not encompass P2E’s gaming permit in Louisiana or its casino development rights in Cedar Rapids, Iowa.
The completion of this transaction is contingent upon customary closing procedures and regulatory approval from the Virginia Racing Commission, the New York State Gaming Commission, and the Iowa Racing and Gaming Commission.
“This exceptional collection of assets broadens our geographical reach and enhances our overall scale,” stated Bill Carstanjen, CDI’s Chief Executive Officer. “P2E has demonstrated remarkable expertise in developing and managing these assets. We are enthusiastic about acquiring them and have ambitious plans for their strategic growth in the years ahead.”
CDI will fund the acquisition through a combination of new debt and existing cash reserves, including proceeds from the sale of land adjacent to the Calder Casino in Florida.
Macquarie Capital served as CDI’s exclusive financial advisor for this transaction, while Sidley Austin LLP provided legal counsel.
CDI recently made its debut in New Jersey in partnership with the TwinSpires product. The company reported record revenue and profits for its third quarter of fiscal year 2021.
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