This is the third acquisition in as many months in the Keystone State. Penn National is in the process of acquiring Pinnacle Entertainment, which owns The Meadows Casino. Additionally, Boyd Gaming purchased Valley Forge Casino in December.
Unsurprisingly, Churchill Downs cited the online gambling opportunities as the major reason the Kentucky-based company is expanding operations to northwest Pennsylvania.
Two-casino deal with a $229.5 million price tag
There is a second property in Louisiana that comes with this sale. For a combined cost of $229.5 million, CDI is purchasing both Presque Isle Downs and Lady Luck Casino in Vicksburg, LA. CDI already owns another casino in Vicksburg, the Riverwalk Casino.
Pennsylvania is new turf for CDI though. It also means new potential opportunities for the company. The PA gambling expansion laws mean CDI can now potentially pursue several new options, including:
Presque Isle is the home to 1,600 slots, 32 table games, and a poker room. There is also a thoroughbred racetrack that runs around 100 race days a year.
The Vicksburg sale will close in the second quarter of 2018. CDI needs to finalize the Lady Luck sale as a condition of the Presque Isle sale. the current timeline has the PA sale wrapping in the final quarter of this year. Another stipulation of the deal is approval of the sale by the Pennsylvania Gaming Control Board (PGCB).
Churchill eager to get into the online gambling game
In the press release announcing the acquisition, CDI CEO Bill Carstanjen readily admitted online gambling was a major reason why the company purchased a Pennsylvania casino:
“We are excited about welcoming both of these properties to the Churchill family. Presque Isle will give us a foothold in Pennsylvania which has recently passed legislation authorizing real money online gaming. The Lady Luck Vicksburg is immediately adjacent to our Riverwalk facility and offers us operational efficiencies in a stable region. Both properties fit our investment criteria and will be immediately accretive to our shareholders.”
The online gambling angle is something CDI pursued in the past. In 2011, it acquired BLUFF Media, a company with a poker-focused magazine and website. The assumption was CDI wanted to leverage the BLUFF name to launch an online poker site.
Additionally, the company’s Twin Spires product allows customers to place horse betting wagers online in 30 different states, including Pennsylvania.
However, what is interesting is the software element of CDI. The company has Twin Spires, which uses in-house technology. There are currently no online casino software partnerships.
In fact, Churchill Downs actually unloaded its social gaming company, Big Fish Games, in December of last year. The company sold for $1 billion to Aristocrat Technologies in Australia.
For now, it seems like CDI is keen to develop in-house. However, given the timeline in PA, inking a deal with a software company could certainly speed up the process to get
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