Bet On It: Kentucky approves licenses for six Churchill Downs properties

Welcome to the latest edition of “Bet On It,” where The Fly looks at news and activity in the sports betting and iGaming space. 

SECTOR RECAP: Realty Income (O) and Blackstone (BX) Real Estate Income Trust jointly announced that Realty Income has signed a definitive agreement to invest approximately $950M to acquire common and preferred equity interests from BREIT in a new joint venture that owns a 95% interest in the real estate assets of The Bellagio Las Vegas. Upon closing, Realty Income will invest approximately $300M of common equity in the joint venture, subject to certain adjustments, to acquire a 21.9% indirect interest in the property, BREIT will retain a 73.1% indirect interest, and MGM Resorts International (MGM) will retain a 5.0% interest in the property. Realty Income will also invest $650M to acquire a yield-bearing preferred equity interest in the joint venture. The Bellagio, situated at the center of the Las Vegas Strip in Las Vegas, Nevada, is subject to an existing triple net lease with approximately 26 years of remaining term and is operated and maintained by MGM. The AAA Five Diamond Resort features approximately 4,000 guestrooms and suites across two towers, 157,000 square feet of gaming space and 200,000 gross square feet of meeting and event facilities. Located on a 77-acre campus, the resort also includes the Fountains of Bellagio and multiple Michelin Star restaurants. The transaction is expected to close in the fourth quarter and is subject to customary closing conditions.

U.S. Soccer announced a global, long-term partnership with Sportradar (SRAD) to enhance and expand distribution of the federation’s data and content around the world, bringing it to a wider audience. Under the terms of the agreement, for both U.S. and international markets, Sportradar has exclusive rights to collect, license and distribute the federation’s official betting and media data. In addition, Sportradar has won the exclusive distribution rights for live AV streaming of U.S. Soccer competitions for betting purposes, available outside of the U.S. Sportradar’s official designation will enable U.S. Soccer to commercialize its data and content around the world through leveraging Sportradar’s global network of more than 900 regulated betting operators and 350 media clients. U.S. Soccer and Sportradar will also collaborate on the development of bespoke data-driven solutions to help deepen existing fan relationships, attract and engage the next generation of National Team supporters and increase opportunities for monetization, driving further growth. The deal, which covers more than 111 matches per year across U.S. Men’s, or USMNT, and Women’s, or USWNT, National Team competitions, including the SheBelieves Cup and the Lamar Hunt U.S. Open Cup .  U.S. Soccer will also engage Sportradar’s Integrity Services for bet monitoring. “The profile of soccer globally across both the men’s and women’s game is the highest its ever been. At this important moment for the sport, this partnership reflects the shared commitment we have with U.S. Soccer to bring the sport to a larger audience both domestically and on an international level,” said Eric Conrad, Executive Vice President, Strategic Partnerships & Content, Sportradar. 

Golden Nugget Online Gaming announced that the company has launched its online and mobile casino in Pennsylvania. The Golden Nugget Online Gaming casino app, powered by DraftKings (DKNG) technology, includes more than 500 slots and classic table games like Blackjack, Roulette and Craps, as well as exclusive games including Rocket, Golden Nugget American Roulette, Golden Nugget Blackjack and more. “We’re thrilled to announce that Golden Nugget Online Gaming’s mobile casino is now available to customers in the Commonwealth of Pennsylvania,” said Matt Kalish, President, DraftKings North America. “The app is powered by our leading technology, which dynamically brings hundreds of popular casino games and exclusive content to our customers’ fingertips. Pennsylvanians will be able to enjoy superior customer service, rewarding promotions, and a smooth interface while playing on Golden Nugget Online Gaming.”

Caesars Sportsbook (CZR) has pulled out of its planned partnership with the group behind the Raynham Park facility in Massachusetts, according to Jessica Welman of SBC Americas. The group is technically eligible to open a retail sportsbook at the site. Initially, the group partnered with bet365 to bring a sportsbook to the state, but bet365 withdrew in January after deciding not to enter Massachusetts at all. Looming questions about whether or not Raynham Park is suitable for a license resulted in Caesars terminating the deal. Raynham Park is in the midst of complicated discussions with the Massachusetts Gaming Commission regarding its suitability. At the heart of the application is a question about whether or not Chris Carney, often described in media as the owner of the facility, is actually a key stakeholder or not.

KHRC APPROVED: Churchill Downs (CHDN) announced that the Kentucky Horse Racing Commission, KHRC, has approved temporary licenses for six CDI properties to begin accepting in-person sports wagers on Thursday, September 7. “CDI is excited to bring our experience operating retail sports wagering experiences to Kentucky with many thanks to the Kentucky General Assembly, Governor Beshear, the KHRC and the Kentucky Public Protection Cabinet for their efforts in making this a reality,” said Bill Carstanjen, CEO of CDI. “Sports betting as a tourism and economic development opportunity will further strengthen the state’s signature equine industry by bringing new guests into our live and historical racing venues.” Separately, Churchill Downs completed its previously-announced purchase of Exacta Systems for total consideration of $250M in cash, subject to certain working capital and other purchase price adjustments. Exacta is a provider of technology to support historical horse racing operations across the country. Through its ownership of Colonial Downs Racetrack and Rosie’s Gaming Emporium historical racing machine facilities, the Transaction will enable CDI to realize synergies related to the company’s Virginia operations. CDI will also realize additional operational improvements over time through the diversification of games available at its HRM facilities. Exacta will operate within the company’s TwinSpires segment and will continue to service its portfolio of third-party HHR operators in Kentucky, Wyoming, and New Hampshire. The transaction was funded with cash on hand and with the company’s existing credit facility.

Governor Andy Beshear announced that the Kentucky Horse Racing Commission, or KHRC, voted to approve temporary licenses for sports wagering operators and service providers. A temporary license grants up to one year of operation in the state while under continued review. With the approval of these licenses, Kentucky bettors now know the retail facilities where they can place a sports wager and which mobile applications will be licensed in the state. “The countdown continues as we move closer to sports wagering with retail locations opening in just 16 days,” said Beshear. “Thank you to the KHRC commissioners for their dedication to getting this done right and getting it done in time for the opening of the NFL season.” “We are excited to open sports wagering on our target date as we continue working through this careful process dedicated to wagering integrity and protecting bettors in the state of Kentucky,” said KHRC chairman Jonathan Rabinowitz. The following Kentucky racetracks and their satellite facilities were approved to open a sportsbook with a planned retail opening on September 7:

• Churchill Downs, Louisville
• Derby City Gaming, Louisville
• Ellis Park, Henderson
• The Mint Gaming Hall Cumberland Run, Corbin
• The Mint Gaming Hall Cumberland, Williamsburg
• Newport Racing and Gaming, Newport
• Oak Grove Gaming and Racing, Oak Grove
• The Red Mile, Lexington
• Turfway Park, Florence

PUBLICLY TRADED COMPANIES IN THE SPACE INCLUDE: Accel Entertainment (ACEL), Bally’s (BALY), Boyd Gaming (BYD), Caesars (CZR), Churchill Downs (CHDN), DraftKings (DKNG), Flutter Entertainment (PDYPY), Gambling.com (GAMB), Gan Limited (GAN), Genius Sports (GENI), Las Vegas Sands (LVS), MGM Resorts (MGM), Penn Entertainment (PENN), Rush Street Interactive (RSI), Super Group (SGHC) and Wynn Resorts (WYNN).