Delaware North Companies Gaming & Entertainment, one of the
most innovative gaming and racing operators in the country, and
Churchill Downs Incorporated ("CDI") (Nasdaq:CHDN), a premier
racing, gaming and entertainment company, today announced their
joint venture to purchase Lebanon Raceway in Lebanon, Ohio, and
develop a new video lottery terminal (VLT) facility with up to
2,500 VLTs and a harness racetrack.
Through a joint venture agreement, Delaware North Companies
Gaming & Entertainment and CDI have formed a new company, Miami
Valley Gaming & Racing, LLC ("Miami Valley Gaming"), to manage
the development and operation of the VLT facility and racetrack.
Miami Valley Gaming has entered into an asset purchase agreement
through which it intends to acquire the harness racing licenses and
certain assets held by Lebanon Trotting Club Inc. (controlled by
the Carlo family) and Miami Valley Trotting Inc. (controlled by the
Nixon family). These two entities currently conduct harness racing
at Lebanon Raceway at the Warren County Fairgrounds. Miami Valley
Gaming intends to acquire these assets for an aggregate purchase
price of $60 million—$10 million paid in cash with a $50 million
promissory note delivered at closing. An additional $10 million
could be paid to the sellers if certain conditions are met with
respect to the performance of the VLT facility over time.
"We are proud to add Lebanon Raceway to our growing portfolio of
U.S. racing and gaming operations," said William Bissett, President
of Delaware North Companies Gaming & Entertainment. "We are
confident that this facility will create hundreds of jobs and
result in millions of dollars in economic impact."
Bill Carstanjen, President and Chief Operating Officer of CDI
added, "We are excited to partner with Delaware North Companies
Gaming & Entertainment to build a modern gaming and racing
venue in an attractive location. This opportunity fits well with
our strategy to grow the company through both acquisition and
development of new gaming facilities."
The sale is contingent upon the approval of the partnership's
application to the Ohio Lottery Commission and the Ohio State
Racing Commission as well as other customary closing conditions.
Subject to the satisfaction of the closing conditions, including
the resolution of any gaming-based litigation, Delaware North
Companies Gaming & Entertainment and CDI hope to begin
construction of the new facility this year, with completion
scheduled for the fall of 2013. Lebanon Raceway has been awarded 52
race dates in 2012 and will offer live racing during two meets—Jan.
6 through June 9 and Sept. 21 through Dec. 8. Prior to the closing
of the asset purchase agreement, the existing licensees will
continue to conduct harness racing at the current Lebanon Raceway
location. Once the acquisition has closed, Miami Valley Gaming will
continue to host races at this location until construction of the
new facility is completed.
C. Keith Nixon, Jr., Vice President of Miami Valley Trotting,
said, "After all these years of having the track in our families,
we wanted to be certain the new owners would have the resources and
the experience to operate a successful facility. We're confident
that we are placing our families' legacy in good hands with both a
global hospitality company, Delaware North Companies, and the
legendary Churchill Downs Racetrack."
The Nixon and Carlo families, owners of Lebanon Raceway since
1951, will continue to be involved with the new racing and gaming
facility. Both families have agreed to remain consultants to
Delaware North Companies Gaming & Entertainment and CDI.
"This track is a huge part of our life, so we wanted the new
owners to be someone with the vision and the resources to ensure
the raceway remains an economic and entertainment asset for Warren
County and the entire region," said John Carlo, President of
Lebanon Trotting Club. "Delaware North Companies Gaming &
Entertainment and Churchill Downs Incorporated are committed to
keeping the track in Southwest Ohio and provide the best
opportunity to design and operate a successful track and gaming
facility."
Bissett said a new location is necessary to provide more room
for the construction of a video lottery gaming facility and will
provide easier access to Interstate 75. "As with any complex
economic development project, there are many factors that could
impact the final location of the new track and video lottery
facility, and we are currently looking at a number of great
possible sites. We will continue to work with local leadership, the
State of Ohio and Ohio General Assembly leaders on this development
that will create 700 jobs and bring in $24 million a year to the
area," Bissett said.
Delaware North Companies Gaming & Entertainment and CDI will
each own a 50 percent interest in the new venture and will have
equal representation on its Board of Managers. Collectively,
Delaware North Companies Gaming & Entertainment and CDI plan to
contribute up to $90 million in equity with the rest of the
development funded with debt.
Miami Valley Gaming will apply for a 10-year VLT license. In
addition to the $50 million license fee, the joint venture will
invest $175 million in the new facility, including the cost of
VLTs. Total project cost is estimated to be $225
million. Miami Valley Gaming has teamed with other horse
tracks in Ohio for discussions with horse racing associations to
establish purse levels to ensure continued racing in Ohio.
About Delaware North Companies Gaming &
Entertainment
Delaware North Companies Gaming & Entertainment is one of
the most innovative gaming and racing operators in the country,
owning and/or operating several successful regional destination
casinos and specializing in racing venues with added amenities such
as table games, video gaming machines, poker rooms, full-service
restaurants, retail shops and lodging. The company operates gaming
and hospitality services at locations in New York, Illinois,
Florida, West Virginia, Arkansas, and Oklahoma.
Delaware North Companies Gaming & Entertainment is a
subsidiary of Delaware North Companies, a $2.5 billion hospitality
management company that operates food service, lodging, gaming and
retail services at locations in the United States and several other
countries.
About Delaware North Companies
Delaware North Companies is one of the world's leading
hospitality and food service companies. Its family of companies
includes Delaware North Companies Parks & Resorts, Delaware
North Companies Gaming & Entertainment, Delaware North
Companies Travel Hospitality Services, Delaware North Companies
Sportservice, Delaware North Companies International and Delaware
North Companies Boston, owner of TD Garden. Delaware North
Companies is one of the largest and most admired privately held
companies in the world with revenues exceeding $2.5 billion
annually and 55,000 associates serving half a billion customers in
the United States, Canada, the United Kingdom, Australia and New
Zealand. For more information, visit www.DelawareNorth.com.
Delaware North Companies has operated in Ohio for more than 50
years, employing more than 3,200 Ohioans in 2011 and serving in
excess of 10 million guests annually at venues across the state.
Ohio is one of the company's top three states in terms of the
number of locations, revenue and taxes paid. Delaware North
operates all food and retail services at the Great American Ball
Park in Cincinnati and Nationwide Arena in Columbus, as well as
food concessions at Progressive Field and Cleveland Browns Stadium.
Delaware North also manages the Lodge at Geneva-on-the-Lake in the
heart of Ohio's wine country along Lake Erie.
About Churchill Downs Incorporated
Churchill Downs Incorporated ("CDI") (Nasdaq:CHDN),
headquartered in Louisville, Ky., owns and operates the
world-renowned Churchill Downs Racetrack, home of the Kentucky
Derby and Kentucky Oaks, as well as racetrack and casino operations
and a poker room in Miami Gardens, Fla.; racetrack, casino and
video poker operations in New Orleans, La.; racetrack operations in
Arlington Heights, Ill.; and a casino resort in Greenville, Miss.
CDI also owns the country's premier account-wagering company,
TwinSpires.com, and other advance-deposit wagering providers; the
totalizator company, United Tote; Bluff Media, an Atlanta-based
multimedia poker content, brand and publishing company; and a
collection of racing-related telecommunications and data companies.
Information about CDI can be found online at
www.churchilldownsincorporated.com.
Safe Harbor Disclosure for Churchill Downs Incorporated:
Information set forth in this news release contains various
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The Private Securities Litigation Reform Act
of 1995 (the "Act") provides certain "safe harbor" provisions for
forward-looking statements. All forward-looking statements made in
this Quarterly Report on Form 10-Q are made pursuant to the Act.
The reader is cautioned that such forward-looking statements are
based on information available at the time and/or management's good
faith belief with respect to future events, and are subject to
risks and uncertainties that could cause actual performance or
results to differ materially from those expressed in the
statements. Forward-looking statements speak only as of the date
the statement was made. We assume no obligation to update
forward-looking information to reflect actual results, changes in
assumptions or changes in other factors affecting forward-looking
information. Forward-looking statements are typically identified by
the use of terms such as "anticipate," "believe," "could,"
"estimate," "expect," "intend," "may," "might," "plan," "predict,"
"project," "hope," "should," "will," and similar words, although
some forward-looking statements are expressed differently. Although
we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such
expectations will prove to be correct. Important factors that could
cause actual results to differ materially from expectations
include: the effect of global economic conditions, including any
disruptions in the credit markets; a decrease in consumers'
discretionary income; the effect (including possible increases in
the cost of doing business) resulting from future war and terrorist
activities or political uncertainties; the overall economic
environment; the impact of increasing insurance costs; the impact
of interest rate fluctuations; the effect of any change in our
accounting policies or practices; the financial performance of our
racing operations; the impact of gaming competition (including
lotteries, online gaming and riverboat, cruise ship and land-based
casinos) and other sports and entertainment options in the markets
in which we operate; our ability to maintain racing and gaming
licenses to conduct our businesses; the impact of live racing day
competition with other Florida, Illinois and Louisiana racetracks
within those respective markets; the impact of higher purses and
other incentives in states that compete with our racetracks; costs
associated with our efforts in support of alternative gaming
initiatives; costs associated with customer relationship management
initiatives; a substantial change in law or regulations affecting
pari-mutuel and gaming activities; a substantial change in
allocation of live racing days; changes in Kentucky, Florida,
Illinois or Louisiana law or regulations that impact revenues or
costs of racing operations in those states; the presence of
wagering and gaming operations at other states' racetracks and
casinos near our operations; our continued ability to effectively
compete for the country's horses and trainers necessary to achieve
full field horse races; our continued ability to grow our share of
the interstate simulcast market and obtain the consents of
horsemen's groups to interstate simulcasting; our ability to enter
into agreements with other industry constituents for the purchase
and sale of racing content for wagering purposes; our ability to
execute our acquisition strategy and to complete or successfully
operate planned expansion projects; our ability to successfully
complete any divestiture transaction; market reaction to our
expansion projects; the inability of our totalisator company,
United Tote, to maintain its processes accurately or keep its
technology current; our accountability for environmental
contamination; the ability of our online business to prevent
security breaches within its online technologies; the loss of key
personnel; the impact of natural and other disasters on our
operations and our ability to obtain insurance recoveries in
respect of such losses (including losses related to business
interruption); our ability to integrate any businesses we acquire
into our existing operations, including our ability to maintain
revenues at historic levels and achieve anticipated cost savings;
the impact of wagering laws, including changes in laws or
enforcement of those laws by regulatory agencies; the outcome of
pending or threatened litigation; changes in our relationships with
horsemen's groups and their memberships; our ability to reach
agreement with horsemen's groups on future purse and other
agreements (including, without limiting, agreements on sharing of
revenues from gaming and advance deposit wagering); the effect of
claims of third parties to intellectual property rights; and the
volatility of our stock price.
CONTACT: Delaware North Companies Gaming & Entertainment
Glen White
(716) 858-5753 (office)
(716) 573-5257 (mobile)
gawhite@dncinc.com
Churchill Downs Incorporated
John Asher
(502) 636-4586 (office)
(502) 494-3626 (mobile)
JohnA@kyderby.com
Churchill Downs (NASDAQ:CHDN)
Historical Stock Chart
From Apr 2024 to May 2024
Churchill Downs (NASDAQ:CHDN)
Historical Stock Chart
From May 2023 to May 2024