Colonial Downs, Richmond Rosie’s sell to Kentucky Derby owner for $138M

The Richmond Rosie’s Gaming Emporium on Midlothian Turnpike changed hands as part of a larger acquisition. (Jonathan Spiers photo)

The company behind “the most exciting two minutes in sports” now has stakes in Richmond and other parts of the state.

Churchill Downs Inc. is the new owner of Colonial Downs in New Kent County and the six Rosie’s Gaming Emporiums across Virginia, including the Richmond Rosie’s at 6807 Midlothian Turnpike.

The acquisitions follow CDI’s completion of its $2.75 billion purchase of substantially all assets of Peninsula Pacific Entertainment, the Iowa-based gaming firm that reopened Colonial Downs in 2019 and operated the Rosie’s locations there and in Richmond, Collinsville, Dumfries, Hampton and Vinton.

Colonial Downs during construction for its 2019 reopening. (BizSense file photos)

The deal was announced in February and closed Nov. 1. In addition to the racetrack and the off-track horse-betting parlors, it includes the Del Lago Resort & Casino in Waterloo, New York; the Hard Rock Hotel & Casino in Sioux City, Iowa; and rights to develop up to five more off-track parlors in Virginia, including a planned Rosie’s in Emporia and a $400 million gaming resort in Dumfries, both slated to open next year.

Also included in the deal is the rights to the proposed One Casino + Resort that Peninsula Pacific and Maryland-based Urban One have sought to develop in South Richmond. The $565 million project was rejected by city voters last year, but city leaders are pursuing a do-over referendum that could be put to voters in 2023.

With the deal, the Colonial Downs property recently transferred to CDI in a transaction that totaled $86.8 million. The 350-acre property along Interstate 64 is assessed by the county at nearly $64 million.

And last Monday, an LLC called CDI Virginia Land closed on two parcels that make up the Richmond Rosie’s property. The parcels – 6807 and 6823 Midlothian Turnpike – sold together for just over $51 million. Colonial Downs Group was the seller.

An aerial rendering of the Richmond Rosie’s property.

Totaling nearly 15 acres, the two parcels are assessed by the city at $12.8 million collectively. The Rosie’s facility – a conversion of an old Kmart building – was announced in 2018 as a $41 million project.

The Richmond deal did not include a third parcel that Colonial Downs Group still owns at 6707 Rear Midlothian Turnpike. That half-acre parcel, a wooded lot beside the east end of the building, was purchased in 2019 for $750,000 and is assessed at $585,000.

In an announcement of the Peninsula Pacific deal’s completion, CEO Bill Carstanjen called the transaction “a significant moment” in CDI’s evolution and said it “meaningfully” expands its geographic footprint from Kentucky to Virginia, Iowa and New York.

The Colonial Downs property spans 350 acres in New Kent County. (Image courtesy of Colonial Downs)

“We are excited to welcome the teams from each of these well-established properties into Churchill Downs Incorporated,” he said in the announcement.

CDI plans to increase the number of race days at Colonial Downs from 26 per year as it opens more betting parlors and adds more game machines in the state, according to a recent investor presentation.

With more than 2,600 machines across the Rosie’s network today, it plans to maintain a ratio of one race day per 100 machines as it works toward a total of 5,000 machines – potentially doubling the number of race days at Colonial Downs.

BizSense reporter Mike Platania contributed to this report.