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

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

The company behind “the most exciting two minutes in esports” now has interests 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 throughout Virginia, including Richmond Rosie’s at 6807 Midlothian Turnpike.

The acquisitions follow the completion of the $2.75 billion purchase of nearly all of Peninsula Pacific Entertainment’s assets by CDI, the Iowa-based gaming company that reopened Colonial Downs in 2019 and owns 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 on November 1st. In addition to the racecourse and off-course 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 other off-track saloons in Virginia, including a proposed Rosie’s in Emporia and a $400 million gaming resort in Dumfries, both slated to open next year.

Also included in the agreement are rights to the proposed One Casino + Resort that Peninsula Pacific and Maryland-based Urban One planned to develop in South Richmond. The $565 million project was rejected by city voters last year, but city leaders are aiming for a referendum that could be presented to voters in 2023.

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

An aerial view of Richmond Rosie’s estate.

And on Monday, an LLC called CDI Virginia Land closed two parcels owned by Richmond Rosie. The packages – 6807 and 6823 Midlothian Turnpike – sold together for just over $51 million. The seller was the Colonial Downs Group.

The two lots, totaling nearly 15 acres, are valued by the city at a combined $12.8 million. The Rosie 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 property that Colonial Downs Group still owns, 6707 Rear Midlothian Turnpike. This 0.4 acre lot, a wooded lot adjacent to the east end of the building, was purchased in 2019 for $750,000 and is currently priced at $585,000.

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

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

“We are pleased to welcome the teams from each of these established properties to 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 shops and adds more slot machines in the state, according to a recent investor presentation.

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

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