Churchill Downs Incorporated (CDI) is acquiring Peninsula Pacific Entertainment (P2E) in a massive $2.5 billion transaction. This agreement encompasses P2E’s holdings in Virginia and New York, in addition to their Hard Rock gambling establishment in Iowa.
The Virginia assets are a significant part of the deal, including the Colonial Downs racetrack and six Rosie’s Gaming Emporiums. These venues feature those highly sought-after horse racing machines. Furthermore, CDI gains the right to construct five additional Rosie’s locations!
They are also gaining the rights to develop a substantial gaming resort in Virginia known as the Dumfries project. P2E had already allocated $400 million for the initial phase of this endeavor, which is slated to commence operations next year.
And that’s not the end of it! CDI is securing the rights to construct ONE Casino and Resort in Richmond, Virginia. This $565 million resort was nearly brought to fruition last year, but voters rejected the proposal. However, CDI is optimistic about securing approval for its construction this time around.
Within the bustling metropolis of New York City, CDI will obtain possession of del Lago Resort and Casino, a property boasting a sizable 96,000 square foot gambling establishment and a 6,000 square foot sports betting facility, which actively participates in the sports wagering market in collaboration with DraftKings.
Concurrently, the underlying real estate of the Hard Rock Hotel and Casino in Sioux City will be transferred to a separate entity, and CDI will secure the operational rights from this unidentified proprietor.
The gaming permit held by P2E in Louisiana and its casino development entitlements in Cedar Rapids, Iowa, are not encompassed within the agreement.
The completion of this transaction is contingent upon customary closing stipulations and regulatory authorizations from the Virginia Racing Commission, the New York State Gaming Commission, and the Iowa Racing and Gaming Commission.
“This distinctive collection of assets broadens our geographical reach and provides enhanced scale,” stated Bill Carstanjen, the chief executive officer of CDI. “P2E has demonstrated exceptional proficiency in developing and managing these assets, and we are enthusiastic about acquiring them and formulating strategic plans for their expansion in the years ahead.”
CDI will finance the transaction through a combination of newly acquired debt and readily available funds, including proceeds derived from the sale of land adjacent to Calder Casino in Florida.
Macquarie Capital served as the exclusive financial consultant to CDI in this transaction, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal counsel.
CDI recently introduced its TwinSpires product in New Jersey and declared record revenue and earnings for the third quarter of fiscal year 2021.
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