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What you need to know for 01/22/2017

Churchill Downs to buy stake in Saratoga Harness

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Churchill Downs to buy stake in Saratoga Harness

Churchill Downs Inc. is finalizing a deal that will make the company a minority stakeholder of Sarat

Churchill Downs Inc. is finalizing a deal that will make the company a minority stakeholder of Saratoga Harness Racing Inc., which operates Saratoga Casino and Raceway in Saratoga Springs.

The Kentucky-based company that owns the historic track in Louisville and hosts the renowned Kentucky Derby is also nearing a fiveyear agreement with Saratoga Harness to manage both the video lottery terminal facility and harness track in Saratoga, in addition to Saratoga Casino Black Hawk in Colorado. The agreement is pending Churchill Downs obtaining the necessary licenses to operate the two gaming facilities.

Churchhill Downs is also listed as the managing entity for Capital View Casino & Resort, the estimated $300 million gaming facility the racino operators are proposing to build in East Greenbush. Saratoga Harness formed a partnership with Churchill Downs in May in the hope of landing one of four licenses due to be issued by the state Gaming Commission sometime this fall.

“We are proud to take an ownership interest in Saratoga Harness Racing Inc., which shares with us a passion for offering premier racing and gaming entertainment,” Bill Carstanjen, president and chief operating officer of Churchill Downs, said in a news release Wednesday. “We are excited to expand our operations into New York and Colorado and hope to become more involved in the Capitol Region if we are fortunate enough to be awarded a license to build and operate Capital View Casino & Resort.”

James Featherstonhaugh, minority owner of Saratoga Harness, said the agreement between the companies should make the bid submitted to the Gaming Commission even more compelling. If the East Greenbush proposal is awarded a license, Churchill Downs would oversee 1,506 slot machines, 1,782 video lottery terminals, 56 table games and a harness track between the two facilities.

“This makes us a stronger company for sure,” he said. “It makes our bid in East Greenbush stronger. We’ll have a continuity in management that will allow the state to maximize revenues from two facilities.”

Churchill Downs will manage both sides of the operation in Saratoga Springs. Delaware North managed the VLT side of the operation from its establishment in 2004 until 2009, when Saratoga Harness took over.

Featherstonhaugh said the agreements aren’t expected to result in any noticeable changes for harness racing operations in Saratoga Springs or result in job cuts at the facility. The pending arrangement also isn’t expected to affect the racino’s $32 million, 134,000-square-foot expansion project now under review by the state.

“We have a high regard for the guys at Churchill and we enjoy working with them,” he said, “We’re not only willing, but eager to have input from them as our company grows and expands.”

The duration of the management agreement extends beyond the racino’s contract with the Saratoga Harness Horseperson’s Association, an organization representing the owners, breeders, trainers and drivers at the track. The group’s existing contract expires at the end of 2015.

An official with the horsemen was unaware of the pending management agreement between Saratoga Harness and Churchill Downs.

The companies are now negotiating a stock purchase, in which Churchill Downs will purchase 25 percent of economic and voting interests of Saratoga Harness, which owns a controlling interest in the Colorado casino. Saratoga Harness also has a 50 percent interest in a joint venture with Delaware North Cos. to manage the Gideon Putnam Hotel and Resort in Saratoga Spa State Park. In addition, Saratoga Harness owns a minority interest in Ellis Park, a thoroughbred racing operation in Henderson, Ky.

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