Churchill Downs Confirms Online Poker Partnership with California Casino

Churchill downsWhile talks to legalize online poker in California have stalled, that hasn’t stopped gaming companies from making preparations for the day that iGaming legislation passes. According to a news report in the Courier-Journal, a team from the Churchill Downs Interactive Gaming division is preparing software to be deployed when the industry becomes regulated, and has already chosen a land-based casino partner with whom they will work should pro Internet poker legislation become law.

The Kentucky-based gaming company has confirmed a deal with Crystal Casino & Hotel in Los Angeles and Ocean’s 11 in Oceanside. The news was leaked in May, but company officials failed to speak about the partnership until this week. The deal was published in a Churchill earnings report this week, in which the company divulged its profits for the past three months.

The agreements will see the three companies linked for 10 years, starting with the first online wager placed. Churchill will be responsible for the software platform, while the two land-based casinos will provide the licensing which online gambling sites will likely need to become regulated.

Major US investments

Churchill is the owner of the Kentucky Derby brand and operates, one of the biggest horseracing betting sites in the world. Last year, the company signaled its intention to enter the legal US online gambling market with investments into betting technology and customer support systems.

The company had intended to open up shop first in the New Jersey iGaming market, but became embroiled in a lawsuit with a potential partner. Churchill invested $2.5 million with casino executive Nicholas Ribis, who they claim led it to believe that he would soon purchase the Showboat Atlantic City Hotel and Casino. The money was paid to Ribis’ company, NLR Entertainment, and was meant to serve as an “earnest money” deposit, to be followed by a $7.5 million payment once the deal closed.

The deal never went down, and Churchill has sued to recoup its deposit. The company has already invested some $10 million in New Jersey to purchase intellectual property and hire engineers to begin developing its software platform.

Churchill also runs Bluff Media, a website and print poker publication which it bought in 2012. The gaming company recently announced, however, that it would be discontinuing the print version altogether, then essentially closed down the site after firing all Bluff employees.

There are several online poker bills on the table in California, but the state’s varied gambling stakeholders can’t come to an agreement on acceptable language for such legislation. The powerful Pechanga and Agua Caliente tribes have allied themselves against horseracing tracks, whom they believe should not be allowed to open their own Internet poker sites. The coalition is also opposed to PokerStars entry into the state, claiming that it should be seen as a bad actor and precluded from operating in California.