Mountaineer Park To Be Sold

The gaming and Thoroughbred racing operations at Mountaineer Casino, Racetrack and Resort in West Virginia are in the process of being sold to Century Casinos, Inc., a publicly traded Colorado-based gaming firm that also operates two Canadian horse tracks.

The deal announced by the firm on Monday is part of a larger $107-million operations acquisition that includes Century's taking over of two other non-racing gaming properties in Missouri, the Isle Casino Cape Girardeau and Lady Luck Caruthersville.

Eldorado Resorts, Inc., is the seller. The actual property of all three gaming operations is being sold separately.

Simultaneous with the expected 2020 closing of the transaction, a real estate investment trust, VICI Properties Inc., will acquire the real estate assets of all three properties for approximately $278 million. Century Casinos will then enter into a triple net lease agreement with VICI for those three casino properties. The lease will have an initial annual rent of approximately $25 million and an initial term of 15 years, with four five-year renewal options.

The global holdings of Century Casinos include two other North American racetrack entities: The company owns and operates Century Mile Racetrack and Casino in Edmonton, and through a subsidiary it holds a 75% ownership interest in Century Downs Racetrack and Casino in Calgary. The firm also has an operational role in Century Bets! Inc., the pari-mutuel off-track horse betting networks in Alberta.

Paul Ryneveld, Century's managing director for its two Alberta racinos, told TDN via phone on Monday that while “no stone would be unturned” in the firm's near-term quest to improve the live racing product and its simulcasting distribution, it's “very, very early to really know what's going to happen a few years from now.” He added that no aspects of Mountaineer's racing operation would change until the deal officially closes in early 2020.

“If you go back to the late 90's and early 2000s when Mountaineer was pretty much the only gaming establishment in that region, their purses went up and obviously the racing increased as far as field size and everything,” Ryneveld said. “I remember horsemen complaining that they could not get stalls at Mountaineer. So whether or not we're able to return to that time [is unclear], because obviously the competitive landscape has increased drastically in that region.”

Ryneveld described Century as entirely a gaming company prior to getting involved with Century Mile and Century Downs in recent years. But now, he added, “horse racing is seen as a component of the entertainment offering at our two facilities in Alberta, and that philosophy would be taken to the property there in West Virginia.”

Ryneveld said the new operational firm would likely explore “synergies” that could be cultivated between Century Downs, Century Mile and Mountaineer.

As an example, Ryneveld said that because the Alberta tracks race exclusively in the summer months, a deal could be worked out to “possibly incentivize [Alberta] horsemen to go race at Mountaineer to have new blood and increase the field size of the product” during the spring and autumn “shoulder seasons” in West Virginia.

Asked about the job security for the current operational team at Mountaineer, Ryneveld said “it's way too preliminary for any of that” discussion.

“That operation has obviously been going for many years, and it's just way too preliminary [to say what will happen],” Ryneveld continued. “My background in the horse racing business goes back 32 years, and I've seen it time and time again where an acquisition happens and people aren't sure whether to be happy about it or to be scared about it. Horsemen in particular don't like change, so that's obviously the greatest fear, what's going to happen. The one thing we've shown in Alberta is that racing is a significant component of the operation at both facilities.”