Gaming company and horse racing giant Churchill Downs Incorporated (CDI) announced Thursday it is one step closer to buying Hard Rock Hotel & Casino Sioux City after being greenlighted by the Iowa Racing and Gaming Commission.
The unanimous approval marks a major milestone in the company's $2.75 billion bid to buy Peninsula Pacific Entertainment (P2E), which owns the Hard Rock Casino and other racing and gambling properties in Virginia and New York. The deal was first announced by Churchill Downs in February this year.
Representatives from Churchill Downs and Hard Rock Casino said they were "excited" about the purchase agreement and that the casino’s operations would remain largely the same after the deal is finalized.
Tim Bryant, vice president of gaming operations at Churchill Downs, told commissioners the company plans to maintain the Hard Rock brand and keep all 350 casino staff on board after the purchase is completed.
“We are committed to the members of the Hard Rock Sioux City team. We have been quite impressed with our visits to this property, it is very evident that the senior team has assembled a great team and we are looking forward to continuing what already exists there today," he said, according to The Des Moines Register.
Hard Rock Sioux City is a 45,000-square-foot casino with 639 slot machines, 20 gaming tables, and a 54-room hotel. The casino property also features a sportsbook, live entertainment venues, restaurants and a music memorabilia collection.
Churchill Downs will maintain P2E’s agreement with Missouri River Historic Development, a local nonprofit that holds the casino’s state gaming license. Under a deal with Hard Rock, the MRDH receives 4.25% of casino revenue, which is later redistributed to charities, civic groups and local governments in Woodbury and adjacent counties.
Hard Rock General Manager Doug Fischer said he looks forward to “no change” in the deal between the casino and MRHD. The acquisition process was fairly straightforward and he stated that he intends to continue operations as usual, he noted.
The agreement originally stated that Churchill Downs would sell the Hard Rock property to an undisclosed third party and then lease the property to operate it, but Churchill Downs later chose to own and manage the casino property. This move triggered a provision in the agreement that increased the purchase price by $225 million, from $2.485 billion to $2.75 billion.
Hard Rock Hotel & Casino Sioux City's gaming floor.
The purchase announcement in February included seven racetracks in Virginia and a casino in New York, with a deal subject to regulatory approval involving the three states. As part of the P2E deal, Churchill Downs is buying Colonial Downs Racing in New Kent, Virginia, and six Rosie’s Gaming Emporium properties in the state.
The company also plans to acquire del Lago Casino and Resort in Waterloo, New York, a 96,000-square-foot casino with 1,700 slot machines and 80 table games, as well as an indoor sports betting and entertainment venue and exterior. Churchill Downs received approval for the purchase from the Virginia Racing Commission in June and is awaiting greenlight from the New York Gaming Commission.
Churchill Downs has recently reported its business results for the second quarter of the year, with record net revenues of $582.5 million, and a record net income of $339.3 million. Momentum was driven by the Kentucky Derby at Churchill Downs Racetrack. Additionally, the company posted an overall record Adjusted EBITDA of $291.2 million.