Presque Isle and Lady Luck Sold
Two Eldorado Resorts properties, Presque Isle Downs & Casino and Lady Luck Casino, have been sold, in principle, to racetrack operator and casino developer, Churchill Downs. Eldorado Resorts recently announced the two US casino operators have signed a deal for the sale of these two properties for a collective US$229.5 million.
Provided that full regulatory approval is obtained for the deal, Presque Isle, in Erie, Pennsylvania and Lady Luck in Vicksburg, Missouri, will be sold to Churchill Downs for US$178.9 m and US$50.6 million, respectively. The other proviso on the deal is that the Presque Isle purchase must be complete before Churchill Downs proceeds to purchase Lady Luck.
Eldorado Resorts to Reinvest
In a press statement, Eldorado Resorts Chairman and CEO, Gary Carano revealed that the developer will reinvest the proceeds of the two sales into its 18 other casino properties, spread out across the United States.
Carano said that the sale agreement is in keeping with Eldorado’s strategy to maximize returns on its gaming assets portfolio. This strategy includes the divestiture of some properties and reinvestment in others. Notably, Eldorado Resorts has only been in possession of the Lady Luck Casino since January last year, when it purchased the property, along with 11 others, from Isle of Capri developers for US$1.7 billion.
The CEO confirmed the continued commitment of Eldorado Resorts to expanding its platform into growth markets with high return potential, whilst redeploying capital to boost return on existing investments. Carano added that the price tag settled upon for the two properties in question is testament to the attractiveness of these properties and their trailing 12-month cash flows.
Churchill Downs Gains a Foothold in Pennsylvania
Churchill Downs issued a separate press statement, in which CEO Bill Carstanjen elaborated on the appeal of Presque Isle Downs & Casino and Lady Luck Casino. He confirmed that both properties meet the developer’s investment criteria and will immediately add to its shareholders’ investment per share.
Carstanjen furthermore explained that the purchase of Presque Isle is strategically timed in response to recent legislative changes in the US state of Pennsylvania. With real-money online gambling now legal in this state, Churchill Downs hopes to gain a foothold in a market rich with potential for industry growth.
Meanwhile, Carstanjen said, location was also the primary appeal of the Lady Luck Casino Vicksburg. That is because the Missouri casino is located immediately adjacent to another Churchill Downs property – its Boardwalk facility. This will enable considerable operational efficiency in a highly stable region.