The completion of the two deals is subject to regulatory approval from the Pennsylvania Gaming Control Board and the Mississippi Gaming Commission. Churchill Downs needs to obtain licenses from the two regulatory bodies in order to be able to buy the two venues and to operate in the two states. With Presque Isle Downs & Casino being a horse racing venue, the gaming company is also seeking a license from the Pennsylvania State Horse Racing Commission.
News about the two deals emerged as another manifestation of the consolidation process within the US gaming space that began last year. It was in mid-November when Las Vegas giant Caesars Entertainment announced that it would buy Centaur Holdings and its Indiana-based properties for a cash deal valued at $1.7 billion. In December, Penn National Gaming confirmed that it had agreed to buy rival Pinnacle Entertainment in a $2.8-billion cash-and-stock deal.
In a Wednesday statement, Churchill Downs said that it would pay the purchase price for the two casinos fully in cash.
Expansion across the US
Here it is also important to note that up until recently, Churchill Downs was also the owner of social gaming company Big Fish Games, which it acquired in 2014 in a deal valued at nearly $900 million. Earlier this year, Aristocrat Leisure finalized a $900-million deal for the acquisition of the developer of casual games from the US casino and racing operator.
Adding Presque Isle and Lady Luck to its portfolio of operations, Churchill Downs will now be able to expand into Pennsylvania and Mississippi. Presque Isle opened doors as a casino with 1,600 slot machines, 32 table games, and a poker room in February 2007 and launched live thoroughbred racing in September of that year. As for Lady Luck, the Vicksburg-based property features a gaming floor with 620 slot machines and 9 table games as well as an 89-room hotel.
Churchill Downs said that it expects to complete the Lady Luck acquisition during the second quarter of the year. Conditioned on the closure of the Lady Luck deal, the Presque Isle transaction is expected to be finalized in the fourth quarter of 2018. An entry into Pennsylvania’s gambling market could make it possible for Churchill Downs to expand its business by launching online gambling operations. Last fall, Pennsylvania became the fourth US state to legalize the provision of online gaming services.
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