Posted on: November 22, 2022, 09:27h.
Last updated on: November 22, 2022, 09:44h.
Peninsula Pacific Entertainment (P2E) is without physical casino assets after most of the company’s portfolio was acquired by Churchill Downs earlier this month.
The $2.75 billion acquisition closed on November 1. The deal included Del Lago Resort & Casino in Waterloo, NY, the Hard Rock Hotel & Casino in Sioux City, Iowa, and the Colonial Downs Racetrack in New Kent, Va.
Churchill Downs additionally obtained six Rosie’s Gaming Emporium historical horse racing (HHR) facilities in Virginia. The P2E takeover allows Churchill Downs to build up to five additional Rosie’s locations that can collectively operate 2,300 historical racing machines.
Churchill Downs is also now the developer of the $400 million Rose Gaming Resort in Dumfries, Va., a gaming and entertainment resort complex that will feature more than 1,100 HHR terminals. It additionally takes over P2E’s development partnership with media conglomerate Urban One for a potential casino project in Richmond, Va.
With P2E now flush with cash but without physical property, the company is prepping its next bet by way of Cedar Rapids, Iowa.
PAC Not Packing its Bags
In June, Iowa Gov. Kim Reynolds (R) signed legislation that prohibits 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. They lobbied that ongoing gaming expansion in neighboring Nebraska stands to poach business from their properties. The gaming industry also reasoned that a market stabilization period was warranted in the wake of the COVID-19 pandemic.
Officials in Cedar Rapids, many of whom have been for years lobbying the state for its own casino resort opportunity, opposed the statute. P2E did, too.
Since 2014, P2E has been trying to gain the state’s backing to build a casino in Cedar Rapids, a town the IRGC denied a casino license to in 2014 and again in 2017 because of market saturation concerns.
Cedar Rapids officials say they’ve been wrongly denied the same economic opportunity afforded to many other cities. In an effort to generate support to allow a casino in Iowa’s second-most populated city, P2E is ramping up its political lobbying efforts through its Iowa political action committee, the “Cedar Rapids Development Group PAC.”
In the final quarter before the 2022 midterms, the PAC gave just shy of $50K to both Republican and Democratic state lawmakers ahead of the November 8 election.
Though P2E is headquartered in Los Angeles, the gaming firm has maintained an office in Iowa for more than a decade. The local corporate office governed the company’s Hard Rock Sioux City casino and also handled P2E’s lobbying efforts for Cedar Rapids.
Though the firm no longer has a stake in a current casino in Iowa, P2E President Jonathan Swain says the company’s PAC spending demonstrates Peninsula Pacific wants to stay in Iowa and build the state’s next casino.
We have been part of the community for more than 10 years and remain committed to bringing a gaming facility to Linn County,” Swain said. “That dedication is for the long term, and participating in the political process is part of that commitment.”
Before the two-year moratorium on new casinos was signed by Reynolds, P2E had proposed two casino schemes for Cedar Rapids. One was a $165 million project with 840 slot machines, 22 table games, and a sportsbook. The other blueprint was for a $105 million development featuring only 550 slots, 15 tables, and sports betting.