In a bid to expand its market share in the sports gambling market, Churchill Downs has acquired management rights of the Lady Luck Casino Nemacolin for $100,000. The Louisville, Kentucky-based racetrack and casino operator also recently acquired a majority stake in Rivers Casino Des Plaines, Illinois.
The $100,000 Churchill Downs invested in the Lady Luck Casino Nemacolin only buys management rights to the property. Reno-based Eldorado Resorts will retain ownership of the casino, which is located near the Nemacolin Woodlands Resort in Farmington, Pennsylvania. Lady Luck Casino Nemacolin has 600 slot machines and 27 table games, and was opened in 2013. The popular resort area is located 70 miles south of Pittsburgh.
Eldorado Resorts owns and operates 21 casinos in 11 states, including Colorado, Florida, Illinois, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, Pennsylvania, and West Virginia. Eldorado’s properties and combined casino facilities include 22,000 slot machines, 640 table games, and over 7,000 hotel rooms.
Churchill Downs Inc. recently paid over $400 million for a 62% stake in Midwest Gaming Holdings, the parent company of Rivers Casino Des Plaines, Illinois. Opened in 2011 near Chicago’s O’Hare International Airport, the casino features 1,000 slot machines and 58 table games. Churchill Downs also runs Arlington International Racecourse in suburban Chicago, and hopes to position itself in the Illinois sports betting market, should sports betting become legal in the state.
Expanding Sports Betting
Churchill Downs Inc., the owner of the world famous Kentucky Derby, hopes to expand into the casino market in a bid to expand its influence in the sports gaming market. Currently, Churchill Downs Inc. owns casinos in 7 states, and 2 racetracks in Illinois and Louisiana.
Churchill Downs’ holdings include Arlington Park and Rivers Casino in Illinois, Calder in Florida, Fairgrounds Race Course in Louisiana, Oxford Casino in Maine, Ocean Downs in Maryland, Harlow’s and Riverwalk in Mississippi, Miami Valley Gaming in Ohio, Lady Luck Nemacolin and Presque Isle Downs in Pennsylvania, and Churchill Downs and Derby City Gaming in Kentucky.
Churchill Downs also recently acquired the Presque Isle Downs & Casino in Erie, Pennsylvania for $178.9 million. The purchase of this casino from Eldorado Resorts was part of the deal involving the purchase of management rights of the Lady Luck Nemacolin. Churchill Downs also plans to open a sports betting facility at Presque Isle.
Churchill Downs also operates the largest online wagering platform for U.S. horseracing via its ownership of TwinSpires.com. With the purchase of land-based casino properties in multiple states, Churchill Downs is well positioned to command a decent market share of the sports betting action online and on land.
A Unique Casino Property
Lady Luck Nemacolin is completely unique on the market. It is the smallest casino in Pennsylvania, and the gaming facility operates as part of a larger property, Nemacolin Woodlands Resort in Farmington. The 2,000-acre resort complex boasts 2 golf courses, five-diamond food and lodging, a private airport, and a zoo.
The casino is private, and hotel guests can play for free. Those who are not guests of the resort may simply purchase an annual membership for only $45. Lady Luck generated $34 million in revenue last year, amounting for only 1% of the total Pennsylvania casino market. Lady Luck’s small scale is due to state restrictions imposed by the Pennsylvania Control Board.
Lady Luck is one of 2 casinos licensed to operate in Pennsylvania with existing resort hotels. Therefore, they are restricted to 600 slots and 50 table games, and must offer gaming only to resort guests or those who purchase a yearly membership. All other Pennsylvania casinos can have up to 5,000 slot machines.
Though the Lady Luck Casino Nemacolin is a much smaller venture than its other interests, Churchill Downs continues to buy casino properties in the hopes of favorable future rulings on legalized sports betting in the states where the company holds properties.
From Horses to Casinos
Churchill Downs began as a single racetrack in Louisville, Kentucky, in 1875. The famous racetrack is home to one of the most prestigious horseracing events in the world, the Kentucky Derby. The Triple Crown of Thoroughbred racing is awarded to a 3-year-old Thoroughbred horse who wins the Kentucky Derby, Preakness Stakes, and Belmont Stakes.
Churchill Downs Incorporated, has evolved from a single racetrack in Kentucky to a publicly-traded company with casinos and racetracks in multiple states. It is also the leading online wagering company in the U.S.