Churchill Downs Incorporated (CDI) has entered into an agreement to sell 49% of its United Tote Company subsidiary to the New York Racing Association (NYRA).
Financial terms of the deal were not disclosed, but it was confirmed that the stake would be sold to NYRA Content Management Solutions, a subsidiary of NYRA.
United Tote supplies totalisator systems, services and equipment, while it also provides a range of technology services to process bets and payouts and pari-mutuel tote services.
Under the agreement, CDI said that it intends to work with NYRA to provide a pari-mutuel solution through United Tote to reach new customers by helping to drive the expansion of horse racing betting onto sports wagering platforms.
As part of the deal, it was also agreed that the United Tote pari-mutuel settlements business will be excluded and remain with CDI.
Pending regulatory approval, NYRA will transition its pari-mutuel wager processing to United Tote in 2023 under a separate agreement.
NYRA is a not-for-profit corporation that operates the three largest thoroughbred horse racing tracks in New York, including the Aqueduct Racetrack in South Ozone Park, Queens; Belmont Park in Elmont; and Saratoga Race Course in Saratoga Springs.
The deal is expected to close by the end of 2022.
The agreement comes after CDI last month posted record revenue for the second quarter of 2022 following the recovery of its live and historical racing segment, while it said it would pursue acquisitions with funds provided from a recent land sale.
The operator said its racing business was helped by the relaxation of novel coronavirus (Covid-19) restrictions, with operations in the same period last year, as well as in Q2 of 2020, having been impacted by precautionary measures put in place during the pandemic.
However, this year customers were able to attend key racing events such as the Kentucky Derby at Churchill Downs Racetrack, as well as to access the Oak Grove Racing, Gaming and Hotel, Derby City Gaming, Newport Racing & Gaming and Turfway Park facilities without restrictions.
In addition, CDI said that its historical racing machine (HRM) properties benefited from the elimination of the capacity restrictions that were in place during the pandemic.