Posted on: Nov 22, 2022 09:27 am.
Last updated on: November 22, 2022, 09:34 am.
Peninsula Pacific Entertainment (P2E) is without any physical casino assets after Churchill Downs acquired most of the company’s portfolio earlier this month.
The $2.75 billion acquisition closed on November 1. The deal included the Del Lago Resort & Casino in Waterloo, NY, the Hard Rock Hotel & Casino in Sioux City, Iowa, and the Colonial Downs Racetrack in New Kent, Virginia.
Churchill Downs also acquired six historic horse racing (HHR) facilities from Rosie’s Gaming Emporium in Virginia. The P2E acquisition allows Churchill Downs to build up to five additional Rosie’s locations, which together can operate 2,300 historic racing machines.
Churchill Downs is also now the developer of the $400 million Rose Gaming Resort in Dumfries, Virginia, a gaming and entertainment resort complex with more than 1,100 HHR terminals. It is also assuming P2E’s development partnership with media conglomerate Urban One for a potential casino project in Richmond, Virginia.
With P2E now filled with cash but no physical property, the company is preparing its next bet over Cedar Rapids, Iowa.
PAC isn’t packing its bags
Iowa Gov. Kim Reynolds (R) signed legislation in June barring the Iowa Racing and Gaming Commission (IRGC) from issuing new casino licenses until at least July 2024.
The legislation was supported by the state’s 19 commercial riverboat and land-based casinos, which are campaigning to ensure that the continued expansion of gambling in Nebraska’s neighboring states poaches business from their properties. The gaming industry also argued that a market stabilization period was warranted after the COVID-19 pandemic.
Cedar Rapids officials, many of whom have lobbied the state for years for the possibility of their own casino resort, defied the law. P2E too.
Since 2014, P2E has sought state support to build a casino in Cedar Rapids, a city that was denied a casino license by the IRGC in 2014 and again in 2017 due to market saturation concerns.
Cedar Rapids officials say they have been unfairly denied the same economic opportunities offered to many other cities. To gain support for building a casino in Iowa’s second largest city, P2E is increasing its political lobbying efforts through its Iowa political action committee, the Cedar Rapids Development Group PAC.
In the last quarter leading up to the 2022 midterms, the PAC gave just under $50,000 to both Republican and Democratic lawmakers ahead of the Nov. 8 election.
Although P2E is headquartered in Los Angeles, the gaming company has had an office in Iowa for more than a decade. The local corporate headquarters managed the company’s Hard Rock Sioux City Casino and also handled P2E’s lobbying for Cedar Rapids.
Though the company no longer has an interest in an actual casino in Iowa, P2E President Jonathan Swain says the company’s PAC spending shows Peninsula Pacific plans to stay in Iowa and build the state’s next casino.
We’ve been a part of the community for more than 10 years and remain committed to bringing a gaming establishment to Linn County,” said Swain. “This commitment is long-term, and participating in the political process is part of that commitment.”
Before Reynolds signed the two-year moratorium on new casinos, P2E had proposed two casino programs for Cedar Rapids. One was a $165 million venture with 840 slot machines, 22 table games and a sportsbook. The other blueprint was for a $105 million development with just 550 slots, 15 tables, and sportsbook.