Churchill Downs seals Saratoga deal

4 September 2018

Churchill Downs Incorporated (CDI) has today (Wednesday) concluded a deal with Saratoga Casino Holdings (SCH) that grants it exclusive rights to operate internet real-money sports betting and real-money iGaming in New York and Colorado, should the two states legalise such activities.

The agreement is part of a wider deal, first announced in July, under which CDI will acquire the remaining 50% ownership of the Casino at Ocean Downs and Ocean Downs Racetrack (pictured) located in Berlin, Maryland and owned by SCH in exchange for CDI’s 25% equity interest in SCH. 

SCH is the parent company of Saratoga Casino Hotel in Saratoga Springs, New York and Saratoga Casino Black Hawk in Black Hawk, Colorado.

CDI has entered into a tax-efficient partial liquidation agreement with Saratoga Harness Racing (SHRI) to liquidate CDI’s 25% equity stake in SCH in exchange for the remaining 50% interest in Ocean Downs held by SCH. 

CDI has, in effect, acquired 37.5% of Ocean Downs because it had indirectly owned an additional 12.5% through its 25% ownership interest in SCH.  CDI has now gained complete control of Ocean Downs and has no equity interest or management involvement in Saratoga New York or Saratoga Colorado.

Under the terms of the deal, SHRI has agreed to grant CDI and its affiliates exclusive rights to operate internet real-money sports betting and real-money iGaming on behalf of SHRI in New York and Colorado for a period of 15 years, subject to payment of “commercially reasonable” royalties to SHRI.

Today’s news comes after CDI last month cited “great opportunity” for growth in Mississippi following the launch of sports betting at its two casino properties in the state.

Harlow’s Casino Resort & Spa in Greenville and the Riverwalk Casino Hotel in Vicksburg are now offering wagering services across various sporting events. CDI has launched the sportsbook under the ‘BetAmerica’ brand and plans to also roll out this service in other states where sports betting is legal.

In May, CDI announced that it had agreed a deal with SBTech to jointly work on its sports betting service offering in the US. The partnership initially focused on entrance into the New Jersey and Pennsylvania markets.

Legislation that would have permitted full-scale sports betting in New York failed to gain approval in June, while Colorado is one of a number of states that has laws in place expressly prohibiting full-scale sports wagering.

Image: Ocean Downs