- Company says it’s buying majority interest in Casino Salem
- Venue opened last week with expansion slated for the coming months
Churchill Downs (NASDAQ: CHND) said today it notched agreements to acquire a majority equity interest in Casino Salem — a gaming venue located in the New Hampshire town of the same name.
Financial terms of the transaction, which is expected to close in the current quarter, weren’t disclosed. Casino Salem is one of several charitable gaming venues located in the Granite State.
The initial phase of Casino Salem opened on July 9th with approximately 100 HRMs and 13 live table games. Over the coming months, CDI will finalize plans and commence construction of the future phases of the project including a rebranding of the venue, an expansion of the gaming floor, and several food and beverage concepts,” according to a statement from Kentucky-based Churchill Downs.
The company has another New Hampshire venue — Chasers Poker Room, also in Salem. That property will continue to be run independently of Casino Salem. Local developers Joe Faro and Sal Lupoli will retain stakes in the property.
Churchill Downs Capitalizing on Charitable Gaming Opportunity
As the term implies, charitable gaming differs from the traditional counterpart at which Churchill Downs is steeped in experience, but it offers opportunity for operators.
Charitable gaming features the monetary stakes and potential payouts associated with traditional casino wagering, but it differs in that it’s not operated by a commercial or tribal operator or a government. Rather, it’s run by a charity that farms out gameplay to a company such as Churchill Downs. It can be offered in various forms, including lotteries, table games, and slot machines.
By acquiring majority interest in Casino Salem, Churchill Downs gains “the right to develop a charitable gaming, entertainment and dining destination featuring historical horse racing machines (HRMs). It’s getting majority share of a property with enviable location.
“Casino Salem is located at The Mall at Rockingham Park, which is approximately 30 minutes from downtown Boston,” according to the press release.
More Details on Casino Salem Deal
While Churchill’s New Hampshire assets often go overlooked relative to its Kentucky, Indiana, and Virginia gaming venues in terms of the broader investment thesis, the New England state is exposure worth having, particularly when it comes to adding more, highly profitable HRMs.
That’s all the more pertinent following a Louisiana Supreme Court ruling that forced the operator to remove its HRMs in that state. Casino Salem can’t pick up all of that slack, but it can help Churchill Downs mitigate some of that loss.
As for financing of the Casino Salem purchase, the buyer said it’s using capital from an existing revolving credit facility. The deal must be approved by the New Hampshire Lottery Commission.
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