Iowa gaming commission approves Churchill Downs purchase of Hard Rock Sioux City
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RIVERSIDE, Iowa — The company that owns the site of the Kentucky Derby is one step closer to purchasing the Hard Rock Hotel & Casino Sioux City after receiving approval from the state’s Racing and Gaming Commission on Thursday.
The unanimous approval, which came after little discussion from commissioners, marks a major milestone in the Churchill Downs’ $2.75 billion bid to purchase Peninsula Pacific Entertainment, or P2E, which owns the Hard Rock Casino and other racing and gambling properties in Virginia and New York. Churchill Downs announced the deal in February.
The casino floor of the Hard Rock Hotel & Casino Sioux City is shown above. The Iowa Racing and Gaming Commission on Thursday approved the sale of the casino to Churchill Downs Inc.
Representatives from both Churchill Downs and the Hard Rock Casino said they were excited about the purchase agreement, and that operations at the casino would remain largely the same after the purchase.
Tim Bryant, vice president of gaming operations at Churchill Downs, told commissioners the company was planning on maintaining the Hard Rock brand and keeping the casino’s 350 staff members on board after the purchase is finalized.
“First and foremost, we’re committed to the team members at Hard Rock Sioux City,” he said. We’ve been quite impressed with our visits to that property, it’s very apparent the senior team there had assembled a great team and we’re working forward to continuing what already exists there today."
Churchill Downs also will maintain P2E's agreement with Missouri River Historic Development, the local nonprofit that holds the casino's state gaming license. Under an agreement with the Hard Rock, MRDH receives 4.25% of the casino’s revenues, which it distributes to charities, civic groups and local governments in Woodbury and adjacent counties. Since 1994, MRHD has handed out more than $40 million to area nonprofits and governmental bodies, according to its website.
“We are committed to sustaining the partnership and relationship with MRHD,” Bryant told the commissioners. “We’ve had great conversations with them, and look forward to working with them, and we want to sustain what (Hard Rock general manager Doug Fischer) and his team have done with that relationship.”
Fischer said he looks forward to “no change” in the agreement between the casino and MRHD.
The acquisition process was fairly easy and he looks forward to continuing operations as usual, Fischer said.
“The folks at Churchill have taken a lot of stress out of this, so they’ve been great,” he said.
The Hard Rock is a 45,000 square foot casino with 639 slot machines, 20 gaming tables, and a 54-room hotel. The casino property also features a sportsbook, live entertainment venues, restaurants and a music memorabilia collection.
Based in Los Angeles, P2E is a gaming and entertainment company that was formed in 1999 by Iowa native M. Brent Stevens. In 2013, Stevens formed a 50-50 partnership with Bill Warner, owner of Las Vegas-based Warner Gaming, to develop the Hard Rock casino in Sioux City, which opened a year later. In 2020, P2E obtained full ownership of the Sioux City property after buying Warner’s share.
In February, Churchill Downs, which is publicly traded, announced the purchase of P2E's gaming properties, which also included seven horse racetracks in Virginia and a casino in New York. The deal was subject to regulatory approval, including state gaming commissions in Iowa, Virginia and New York.
The agreement originally stipulated that Churchill Downs would sell the Hard Rock property to an undisclosed third party and and then lease back the property to operate. But Churchill Downs later opted to own and manage the casino property. The decision triggered a provision in the agreement that increased the purchase price by $225 million, from $2.485 billion to $2.75 billion.
Under the P2E deal, Churchill Downs purchase Colonial Downs Racing in New Kent, Virginia, and six Rosie’s Gaming Emporium properties around the state. The company also plans to acquire del Lago Casino and Resort in Waterloo, New York, a 96,000 square foot casino with around 1,700 slot machines and 80 table games, as well as a sportsbook and indoor and outdoor entertainment venue.
Churchill Downs received approval for the purchase from Virginia’s racing commission in June and awaits approval from New York’s gaming commission.
