This unique set of assets expands our geographic footprint and provides additional scale
Churchill Downs Incorporated (CDI) is looking to increase its footprint in Virginia, Iowa, and New York with a big acquisition move worth nearly $2.5 billion.
This week, CDI announced that it has entered into a definitive purchase agreement for the assets of Peninsula Pacific Entertainment (P2E).
The deal, which is expected to close by the end of 2022, includes all of P2E’s Virginia and New York assets, as well as properties in Sioux City, Iowa. The package includes a wide array of tantalizing brands from the horse racing industry, including the historic Colonial Downs Racetrack facility in Virginia, as well as a number of Rosie’s Gaming Emporium locations across the state.
“This unique set of assets expands our geographic footprint and provides additional scale,” said Bill Carstanjen, CEO of CDI. “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.”
In addition to the racetrack facilities, the deal includes a number of casino and resort properties. Beyond Virginia, CDI will add gaming destinations in New York and Iowa to its stable, including operating control of the Hard Rock Hotel & Casino in Sioux City, Iowa.
Casino Development Projects, Expansion into Virginia and Beyond
The deal, valued at $2,485,000,000, is set to grow CDI’s already historic holdings even further. The acquisition of Colonial Downs Racing and Rosie’s Gaming adds to an impressive racing stable that already includes the company’s namesake and home of the fabled Kentucky Derby, Churchill Downs Racetrack in Louisville.
In addition to the racetrack facility, Rosie’s Gaming assets across the state are included in the deal. It not only includes rights to existing Rosie’s locations such as the home of Colonial Downs in New Kent, it includes development rights to facilities under construction, such as the Rose Gaming Resort in Dumfries, as well as the stalled Urban One Casino complex in Richmond.
The acquisition of the uncertain Urban One Casino in Richmond, VA, which was recently shut down after a slim referendum loss, is particularly interesting. Project supporters are fighting back trying to arrange a second referendum, in part because the first vote deficit was razor-thin, but the project’s uncertain future shows CDI is willing to take a risk.
This deal moves well beyond the borders of Virginia, however. Included in the deal is the del Lago Resort & Casino, located in Waterloo, NY. This 96,000-square foot casino and sportsbook complex includes a hotel, restaurant facilities, a 2,400-seat entertainment venue, and 7,200 square feet for outdoor events.
Additionally, CDI picked up the Hard Rock Hotel & Casino in Sioux City, Iowa, though the deal is ultimately more of an operating deal than an ownership stake. While this deal includes the property, part of the deal is the expectation that CDI will sell the real property associated with the facility to a third party, while leasing back operating rights.
A big part of the deal involves forward-looking development projects. The deal gives CDI the opportunity to develop up to five more racing facilities in Virginia, including the Dumfries Project in Northern Virginia, slated to open in 2023, and the aforementioned Urban One Project. The deal also includes rights to develop Rosie’s Gaming Emporium in Emporia near the border with North Carolina.
As the home of fabled races like the Kentucky Derby, CDI was already a big name on the horse racing circuit. This latest acquisition of existing and future facilities like Rosie’s Gaming and Colonial Downs makes it an even more dominating force in the racing and casino game.
