Louisville-based Churchill Downs acquired a second racetrack in its home state Thursday, announcing a $46 million purchase of Turfway Park in Florence, Kentucky from Dan Gilbert’s Jack Entertainment.
The transaction, subject to approval of the Kentucky Horse Racing Commission, could be completed by next week. Once approved, Churchill Downs plans to demolish the existing grandstand for a $150 million expansion project.
“Our team is poised to restore Turfway to its former glory, anchored by northern Kentucky’s first historical racing machine facility, said Kevin Flanery, president of Churchill Downs Racetrack. “The result will be a first-class racing product fueled by increased purses that keeps high-quality horses in Kentucky year-round and appeals to horseplayers nationwide.”
Churchill Downs said the project will include a historical racing machine facility with 1,500 machines, a new clubhouse with food and beverage venues. A new inner dirt track will be built to coincide with the existing one-mile synthetic main racetrack.
In addition to the historic Churchill Downs Racetrack – home of the Kentucky Derby – the company operates racetracks in Illinois and Louisiana and casinos in eight states.
The deal was announced after the markets closed Thursday.
Jefferies gaming analyst David Katz told investors the purchase was part of a “robust growth pipeline” that includes expansion at the company’s Casino Des Plaines in Illinois and a new casino proposal at Waukegan, Illinois; a hotel and historical horse racing facility at Churchill Downs; and a historical horse racing facility at Oak Grove in Louisiana.
“The acquisition announcement adds specificity around the growth pipeline for the next two-to-three years,” Katz said in a research note. “Kentucky historical horse racing machines are among the most active growth markets in the U.S., with Churchill Downs well-positioned to capitalize, which is a key aspect of our positive thesis on the name.”
Shares of Churchill Downs, traded on the Nasdaq, closed at $124.11 Thursday, up $1.21 or 0.98%
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
