Churchill Downs Incorporated (CDI) announced Tuesday it plans to buy the parent company of Colonial Downs, Peninsula Pacific Entertainment (P2E), for $2.485 billion.
CDI will fund the deal through a combination of new debt and cash on hand. It is expected to close by the end of 2022. Some of the cash will come from the sale of land near Calder Casino in Florida.
That buys CDI Colonial Downs, located in New Kent, Va.. The track enjoyed a record 2021 racing season, one featuring an average daily handle of $2,240,000. Virginia’s only Thoroughbred track, Colonial Downs enjoyed strong fields, averaging 8.36 horses per race. Those fields ran for $10.4 million in purses over a 21-day card.
This year, Colonial Downs received approval from the Virginia Racing Commission to run 27 days. It’s season begins July 11 and runs through Sept. 7.
CDI gets more than Colonial Downs
Along with Colonial Downs, CDI acquires six historical horse racing (HHR) gaming facilities in Virginia under the “Rosie’s Gaming Emporium” name. The deal gives CDI rights to develop up to five more HHR facilities across Virginia. This includes rights to build the “Dumfries Project,” a large gaming resort with up to 1,800 HHR machines in the prosperous Northern Virginia area.
P2E previously announced plans to spend upwards of $400 million on the Dumfries Project. It now transfers those rights to CDI.
CDI also acquires the del Lago Resort & Casino in Waterloo, N.Y. and the operations of the Hard Rock Hotel & Casino in Sioux City, Iowa. Under the terms of the deal, P2E is expected to sell the real estate under the Hard Rock property to a third party. That party will then lease the Hard Rock to CDI.
A diverse array of assets
The final piece of the package is rights to P2E’s plans to develop ONE Casino + Resort, a $565 million resort/casino in Richmond, Va. That comes in partnership with Urban One.
“This unique set of assets expands our geographic footprint and provides additional scale,” CDI CEO Bill Carstanjen said in a release announcing the sale. “P2E has done an exceptional job developing and managing this collection of assets, which we are very excited to acquire and plan to strategically grow in the years ahead.”