Gaming, racing and entertainment firm Churchill Downs Incorporated (CDI) has agreed a multifaceted deal with Saratoga Casino Holdings (SCH), which could see real-money internet gaming operations commence in New York and Colorado, if legalised.
The deal forms part of a fresh agreement between the two parties, which has seen CDI acquire the remaining 50 per cent ownership of the casino at Ocean Downs, and Ocean Downs Racetrack, located in Berlin, Maryland.
As part of the deal CDI forgoes its 25 per cent equity interest in previous owner SCH, the parent company of Saratoga Casino Hotel in Saratoga Springs, New York, and Saratoga Casino Black Hawk in Black Hawk, Colorado.
In its media statement, CDI explained: “As previously announced, CDI entered into a tax-efficient partial liquidation agreement with Saratoga Harness Racing Inc (SHRI), to liquidate CDI’s 25 per cent equity stake in SCH, in exchange for the remaining 50 per cent interest in Ocean Downs held by SCH.
“CDI has, in effect, acquired 37.5 per cent of Ocean Downs because it had indirectly owned an additional 12.5 per cent of Ocean Downs through its 25 per cent ownership interest in SCH.
“CDI now owns 100 per cent of Ocean Downs and has no equity interest or management involvement in Saratoga New York or Saratoga Colorado.
“SHRI has agreed to grant CDI, and its affiliates, exclusive rights to operate internet real-money sports betting, and real-money igaming, on behalf of SHRI in New York and Colorado for a period of fifteen years from the date of the liquidation agreement, should such states permit SHRI to engage in sports betting and igaming, subject to payment of commercially reasonable royalties to SHRI.”
This comes as CDI announced a joint venture with Keeneland Association Inc, to build a new $125m racing facility in Oak Grove (Christian County), Kentucky, which would also encapsulate a racing machine facility featuring up to 1,500 machines, a 125-room hotel with event centre, food/beverage venues, a 1,200-person capacity grandstand and event space for indoor events, a 3,000-person capacity outdoor amphitheatre and stage and equestrian centre including indoor and outdoor arenas.
The parties have filed an application with the Kentucky Horse Racing Commission, requesting live standard-bred racing dates at CDI’s old Louisville Downs racing venue located at Derby City Gaming, Louisville, for 2019, before switching to the new proposed location in 2020.