Oxford Casino sold to Churchill Downs for $160 million cash

By Kathryn Skelton and Leslie Dixon, Sun Journal
Posted March 29, 2013, at 12:24 p.m.

OXFORD, Maine — In its short life, Oxford Casino has been courted by five or six companies looking to make a deal. Now one company has emerged with that deal in hand.

Casino owners on Friday announced a sale to the parent company of Churchill Downs Racetrack, home of the Kentucky Derby, for $160 million cash.

“No offense to the others, but this one felt right,” said developer Bob Bahre, a 30 percent owner of Black Bear Realty Co. with his son, Gary.

In its first six months of operation, Oxford Casino saw more than $30 million in net revenue, according to state records.

The one-month total for February was $3.9 million.

Open since June 2012 and the state’s second casino, Oxford has 814 slot machines and 22 table games, employing 420 people.

Bob Bahre said he felt good about the jobs created and about the hands it’s being left in.

“These people are a class act,” he said. “You hear the name Churchill Downs and you know it’s not some fleabag operation.”

Cyndi Robbins, an early casino supporter and owner of Poland Spring Resort up the road, said from an outsider’s perspective, the sale made sense.

“I’m happy for everybody,” she said. “The fact that they paid cash for it is big news and I’m sure that they will be investing in our community, which is great.”

In Lewiston, Peter Robinson, one of the principals behind an unsuccessful effort to bring a casino to the city’s Bates Mill No. 5 in 2011, was “stunned.”

“I assumed at some point they would cash out,” Robinson said. “I’m stunned that they couldn’t even wait a year.”

During a referendum to win a casino in 2010, Black Bear trumpeted its local connections and, Robinson said, later dogged Lewiston when casino supporters there said they would fund the effort by partnering with a large, outside operator.

“All this time they were saying it was going to be 100 percent locally owned; they tried to use that against us,” Robinson said. “The gall of all this is incomprehensible.”

Officials at Hollywood Casino, a Penn National Gaming-owned venue in Bangor, and Oxford’s only Maine competitor, declined to comment on the Churchill Downs acquisition Friday.

The sale isn’t expected to close until later this year and Churchill Downs must first win license approval in front of the Maine Gambling Control Board.

The board will take up the proposal at its April 16 meeting in Bangor.

“This will not be a quick decision,” said Stephen McCausland, public information officer for the Maine Department of Public Safety. “There will be a complete investigation done, a background check of the new potential owners, and the board, once they amass that information, will make a decision sometime later this year.”

Based in Louisville, Ky., Churchill Downs owns casinos in Florida, Louisiana and Mississippi. This would be its first property in New England.

“Maine is a very business-friendly, gaming-friendly environment,” Churchill Downs spokeswoman Courtney Yopp Norris said. “It was very appealing, that area.”

The company has no plans to change Oxford Casino’s name. It is aware the casino’s original master plan included a hotel complex, she said.

“We don’t have any anticipation to make significant capital improvements right away because it is a very new facility,” Yopp Norris said. “As a company, we are always looking for ways to invest capital to grow our business and improve on our guests’ experiences, so we’ll continue to evaluate the expansion and the development of the property after closing and into next year.”

It was Bahre’s understanding that current employees would stay on.

“They’re not going to jeopardize their reputation by coming up and doing something crazy,” he said. “I think over time they’ll probably create a few more jobs. I think it’s going to be very good for the area.”

Bahre said he originally got involved in the casino effort for the jobs. He wanted to help an area that had been good to him.

Black Bear had not been looking to sell, but had been approached repeatedly.

“As long as we were going to sell it, I feel they’re the right people to buy it,” Bahre said.

Oxford Town Manager Michael Chammings expected the new company to make a good neighbor.

The Oxford Casino is the largest employer in town.

“I think you’ll see more jobs and quicker development with these guys,” Chammings said. “I’ve had one person already [ask], ‘What do you think about the money going out of state?’ How much money is going to go out of state? They’re taxed at 46 percent and all their employees work in Oxford.”

Dennis Bailey, a longtime casino opponent, said he wasn’t surprised by the news.

“They narrowly won their campaign by emphasising this was a local group of businessmen with commitment to the area, this would be locally owned and operated. I never bought it for a second,” he said. “They flipped it.”

In addition to Bahre and his son, owners include Rob Lalley, a real estate investor and Mt. Abram Ski area co-owner; Steve Barber, former president and CEO of Barber Foods in Portland, and his wife; James Boldebook, who owns an advertising agency in Biddeford; and Suzanne and Rupert Grover, who own a company in Norway, according to Black Bear’s business application to the Maine Gambling Control Board. They own 45 percent. The remaining 25 percent share was sold to New York investment house Och-Ziff Real Estate Advisors.

While new owners might have the money to build a hotel at the casino more quickly, Bailey said, there will be a different dynamic with Churchill Downs being publicly traded.

“Whereas a local group can be satisfied with a certain amount of money, an outside corporation, publicly traded, that answers to their investors, has a whole different set of priorities, not so much a priority of the local community,” Bailey said.

On Friday, patrons at Oxford Casino had mixed but largely positive feelings about the sale a few hours after the news broke.

“That was fast,” Joan Francis of Buxton said. “I thought this was going to be local.”

Wayne MacDonald of Portland said he was concerned about the sale affecting jobs and the money that is seen locally from the operation.

Employees apparently were not warned about the sale prior to the news being released.

“They don’t know anything,” said patron Gil Gallant, who was told by one of the dealers that he had just heard the casino was sold. “They feel they’ll keep their jobs.”

An employee said he was told not to say anything to anyone, but he had heard the “gossip” about the sale.

Gallant said he was hoping for the best. “I think it only will improve, no matter who gets it.”

Staff writer Leslie H. Dixon contributed to this report.

http://bangordailynews.com/2013/03/29/business/oxford-casino-to-be-sold-to-churchill-downs/ printed on August 1, 2014