Churchill Downs to Acquire Land-Base Maine Casino
Last week Churchill Downs agreed to purchase a land-based Maine casino, the Oxford Casino, in exchange for $160 million in cash, it was reported. The company that currently owns and operates the property is privately-held Black Bear Realty.
The deal awaits final licensing approval from the Maine Gaming Control Board, though Churchill Downs stock was up 5.4 percent on word of the purchase.
Oxford Casino currently employees about four hundred people and is expected to generate $12.5 million in annual revenue for the company, which is perhaps best-known for its namesake racetrack in Kentucky.
Churchill Downs is the site of the annual Kentucky Derby, arguably the most prominent horse race in the nation and a major yearly social event in Lousiville. The Churchill Downs racetrack in Kentucky also houses the Kentucky Derby Museum, an institution dedicated to chronicling the history of that particular event that also features exhibits on the history of the sport of thoroughbred horse racing.
The acquisition of Oxford Casino, a property that only opened to the public in June of last year, is seen as a way for the company to expand its network of gambling properties into even more states. In addition to its Kentucky property, Churchill Downs also owns and operates racing tracks in other states, including California and Florida.
In a statement, Churchill Downs CEO and Chairman Robert Evans said of the deal, “The acquisition of Oxford continues our focus on investing capital in gaming-friendly states, in newer properties, in what we believe are competitively defensible markets, and at valuations that we believe will result in significant future free cash flow generation at rates of return attractive to our shareholders.”
“The Oxford team of over 400 employees has done an exceptional job and we look forward to welcoming them into the Churchill Downs family,” the statement went on to say.
While Maine is generally a state that is fairly open to gambling and gambling expansion, a driving reason behind Churchill Downs’ interest in Oxford Casino to begin with, the 2010 voter referendum that ultimately approved its construction was a divisive one. Some Mainers are now expressing dissatisfaction that the property will be sold off to a company from outside the state.
For its part, Black Bear Realty defended its decision to offload the casino. As word of the sale broke, its founder, Bob Bahre, said, “Although we developed the property, operating casinos is not our core business, and we thought that the time was right to look for a major gaming company that could take this property to the next level.”
