With an eye toward expanded gaming in Texas, Penn National Gaming, Inc. is assuming a 50% ownership interest in Sam Houston Race Park and two other pari-mutuel facilities in the Lone Star state.
According to an announcement from the two companies, the joint venture will own and operate Sam Houston, Valley Race Park in Harlingen, Texas and a planned racetrack in Laredo, Texas. The transaction is subject to final approval by the Texas Racing Commission and the satisfaction of certain other customary closing conditions.
"This partnership allows us to work towards a brighter future for Texas horse racing and we look forward to working with Penn National, an industry leader, to make Texas racing competitive again," Sam Houston Race Park CEO Shawn Hurwitz said in a statement. "Over the past decade, the ability of Texas racing to remain competitive has been severely impacted as horse owners and horsemen have left to race in neighboring states where slot machines at pari-mutuel facilities have generated larger purses.
"Penn National’s racing and gaming expertise, financial resources and track record of successfully developing integrated racing and gaming facilities provides us the opportunity to bring those horses and tens of thousands of jobs back to Texas quickly, provided gaming at race tracks is authorized."
As part of the deal, Penn National will have a 50% interest in the joint venture, which will have sole ownership of the three entities, including interests in 323 acres at Sam Houston Race Park, 80 acres at Valley Race Park, and an option to purchase 135 acres for the planned racetrack in Laredo, Texas.
"Penn National and SHRP will work collaboratively to strengthen and enhance the operations at the existing pari-mutuel facilities and pursue other opportunities, including the potential for gaming at Texas pari-mutuel facilities, to maximize the overall value of the business," the release said.
"This transaction is another step in Penn National’s long-term strategy to diversify its pari-mutuel operations and grow its presence in key markets by acquiring or investing in assets that can benefit from the placement of gaming devices," Penn National CEO Peter M. Carlino said in a statement. "As the nation’s largest owner, operator and investor in pari-mutuel racing operations, we believe there are opportunities to strengthen these existing operations, particularly given the demographics of Houston, Sam Houston Race Park’s host community. We intend to work closely with SHRP to optimize the use and value of these assets, including the real estate, to maximize Penn National’s return from this transaction.
"We also look forward to working with local community and state leaders to advance efforts to bring gaming to existing pari-mutuel facilities in Texas. Penn National has a strong track record of transitioning racing facilities into successful racing and gaming entertainment operations, which benefit local horsemen, local communities and all state residents through economic development leading to the creation of new jobs and new tax revenues. Given the state of the economy, we are eager to begin work with state and local stakeholders on establishing legislation that will quickly reinvigorate racing operations throughout Texas and provide recurring tax revenue needed to fund local and state-wide projects."