BUSINESS

Churchill Downs sue Atlantic City casino exec over failure to acquire Showboat

TAGs: Atlantic City, Caesars Entertainment, churchill downs incorporated, nicholas ribis, Showboat casino

ribis-churchill-downs-showboatKentucky-based racetrack operator Churchill Downs Inc. (CDI) is suing a man for failing to deliver on his promise to acquire the Showboat casino in Atlantic City. Nicholas Ribis (pictured), a longtime AC casino exec who once headed the Trump casino operations in Atlantic City in addition to serving as CEO of the Atlantic Club Casino Hotel back when it was known as the Atlantic City Hilton, is accused of misleading CDI with claims that he was close to acquiring the Showboat from its owners, Caesars Entertainment.

Louisville-based Fox affiliate WDRB reported that CDI claims to have given Ribis-backed firm NLR Entertainment LLC a $2.5m “earnest money” deposit in expectation of his closing the deal. CDI was supposed to give Ribis a further $7.5m on the condition that the sale was closed by Jan. 31. CDI says the casino was to have served as CDI’s brick-and-mortar partner to participate in New Jersey’s online gambling market. CDI’s online division, Churchill Downs Interactive, was to have acted as the Showboat’s “exclusive online vendor.”

CDI’s current online operations include advance deposit wagering on horseracing and online bingo site Luckity. Last summer, CDI reported it was considering a $4m expansion of its online operations in Kentucky and California to take advantage of looming US opportunities. In its lawsuit, which was filed on Monday in Jefferson Circuit Court, CDI claims to have spent $10m purchasing intellectual property and hiring staff to prepare for their online gambling expansion. CDI is seeking the return of the $2.5m it gave Ribis in addition to unspecified damages.

Caesars operates four of Atlantic City’s 11 remaining casinos but rumors flew a year ago that Caesars was shopping its underperforming Showboat property, which ranked seventh in terms of revenue generation among AC casinos in 2013. Around the same time, rumors claimed CDI was in the hunt to purchase the Atlantic Club, which was ultimately bought by Caesars and Tropicana Entertainment, who divvied up the casino’s assets and promptly padlocked the doors. More recent rumours have Caesars looking to acquire the struggling Revel casino, but state officials have expressed concern at the potential of Caesars pushing its share of AC’s casino market over 50%.

Comments

views and opinions expressed are those of the author and do not necessarily reflect those of CalvinAyre.com