US horse racing and gaming giant Churchill Downs Inc. has scrapped a proposed takeover of a Mississippi casino after regulators raised questions about the deal.
In February, Churchill Downs announced that it had struck a deal with Eldorado Resorts to acquire the Presque Isle Downs & Casino in Erie, Pennsylvania and the Lady Luck Casino Vicksburg in Mississippi in an all-cash transaction valued at a total of $229.5m (£173/€196m).
However, having received a second request in May to address concerns from the Federal Trade Commission (FTC) in relation to the Lady Luck Casino takeover, Churchill Downs and Eldorado Resorts have carved that venue out of the deal.
“Following receipt of, and consideration of the time and expense needed to reply to, the second request, pursuant to the termination agreement, Churchill Downs and Eldorado Resorts mutually agreed to terminate their respective rights and obligations with respect to the Lady Luck Vicksburg transaction,” said Churchill Downs, which operates a number of casinos and racetracks, as well as the Twinspires online betting platform.
Churchill Downs, which has agreed to pay Eldorado Resorts a $5m termination fee, is still hopeful of completing a $178.9m deal for Presque Isle Downs & Casino in the fourth quarter of 2018.
As part of the termination agreement, Churchill Downs will also assume the obligations of an Eldorado affiliate in order to operate Lady Luck Casino Nemacolin in Farmington, Pennsylvania, for a fee of $100,000.
The amended agreement between the two parties still has to be approved by the FTC, although the two parties expressed their belief that they would “be able to work expeditiously” to finalise the deal.
In May, Churchill Downs penned a partnership with SBTech to support its entry into US real-money iGaming and sports wagering markets, starting with New Jersey and Pennsylvania.