Churchill Downs draws on Lady Luck for US casino expansion

Churchill Downs draws on Lady Luck for US casino expansion

Tuesday, July 10, 2018 Posted by Luke Massey
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CDI has turned to another Lady Luck venue following an FTC review

A review by the US Federal Trade Commission (FTC) has forced M&A hungry Churchill Downs Inc. (CDI) into a rethink over its plan to acquire Lady Luck Casino in Mississippi.

The parent company of Louisville’s Churchill Downs Racetrack had previously agreed a $229.5 million deal with Eldorado Resorts Inc. (ERI) to purchase the Lady Luck Casino in Mississippi, as well as the Presque Isle Downs and Casino in Pennsylvania.

However, while the Presque deal will still go ahead as a standalone acquisition for a cash sum of $178.9 million, both parties have agreed to terminate the purchase agreement for the Mississippi venue, having realised the time and expense that would be involve in adhering to the FTC’s review.

CDI will now pay ERI a $5 million termination fee, as stipulated in the two parties’ original acquisition agreement, while this termination has also led to a new deal under which CDI will pay a nominal $100k fee to assume the rights of an ERI affiliate to operate another Lady Luck property - this time in Nemacolin, Pennsylvania.

Closing of the Presque Isle transaction is conditional on the Lady Luck Nemacolin deal meeting no objections from the FTC or from Pennsylvania gaming regulators. Both transactions are expected to close in the fourth quarter of 2018.

Totally Gaming says: CDI has continued to switch up its focus in the PASPA free US. The firm's expanded casino division contributed more revenues in Q1 than racing ($98.1m to $89.8m), while SBTech has since come on board to manage both CDI's sports wagering and iGaming operations.

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