Churchill Downs Incorporated Tuesday announced it has entered into a definitive purchase agreement to substantially acquire all assets of Peninsula Pacific Entertainment.

For a total consideration of $2.485 billion, Churchill Downs will acquire all of Peninsula Pacific’s assets in Virginia and New York, as well as the operations of its Hard Rock Casino & Hotel in Sioux City, Iowa.

Churchill Downs also will acquire the rights to Peninsula Pacific’s ongoing effort, in a partnership with Urban One, to develop ONE Casino + Resort, a $565 million destination casino in Richmond, Virginia.

“This unique set of assets expands our geographic footprint and provides additional scale,” said Churchill Downs CEO Bill Carstanjen in a statement. “Peninsula Pacific has done an exceptional job developing and managing this collection of assets, which we are very excited to acquire and plan to strategically grow in the years ahead.”

The acquisition includes:

• The del Lago Resort & Casino in Waterloo, N.Y., which includes approximately 1,700 slot machines, 80 table games, a sportsbook, and a 205-room hotel
• Colonial Downs Racetrack in New Kent, Virginia
• Six historical racing facilities, known as Rosie’s Gaming Emporiums, across Virginia that have historical racing machines

According to terms of the transaction, Peninsula Pacific is expected to reach a definitive agreement to sell the real property associated with Hard Rock Sioux City to a third party. Churchill Downs will acquire the operating company and lease the Sioux City Property from that third party. Following closing, Churchill Downs will operate Hard Rock Sioux City and lease the property pursuant to lease terms negotiated prior to the closing.

If Peninsula Pacific is unsuccessful in reaching a definitive agreement with a third party to purchase the Sioux City property by a certain date, the property will be included in the Peninsula Pacific transaction, with the total consideration increasing to $2.75 billion.

Churchill Downs also will be able to develop up to five additional historical racing entertainment venues in Virginia and acquires the rights to build a gaming resort, known as the Dumfries Project, in Northern Virginia. Peninsula Pacific previously announced plans to invest up to $400 million to build the initial phase of the Dumfries Project, which is scheduled to open in 2023.

Churchill Downs also will acquire the rights to develop a Rosie’s Gaming Emporium in Emporia, the seventh historical racing entertainment venue under Peninsula Pacific’s Colonial Downs license.

The transaction depends on customary closing conditions, including approvals from the Virginia Racing Commission, the New York State Gaming Commission, and the Iowa Racing and Gaming Commission.

The transaction is expected to close by the end of 2022.

Rege Behe is lead contributor to CDC Gaming Reports. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.