Oxford Casino sold to Churchill Downs for $160M

OXFORD — In its short life, Oxford Casino has been courted by five or six companies looking to make a deal.

Amber Waterman/Sun Journal

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

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, and employs 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."

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," said Churchill Downs spokeswoman Courtney Yopp Norris. "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 Lally, 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," said Joan Francis of Buxton. "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.

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Kim Waite's picture

Casinos

are a very good way to launder money that is dirty. Churchill Downs must need an outlet. Say hello to the riff-raff from afar coming to Maine now!

They made out good-the investors

While the numbers are impressive, I believe that there's a little more to this story than meets the eye-why else would a profitable company be sold in less than a year?

Is it really making that much money? Is the thrill and excitement of having a casino in this part of the state diminishing? Lack of traffic doing something?

I think the investors see the future all too clearly. We're still in the midst of a recovering economy and the first great numbers of gamblers coming in are going down..and so are profits.

So they cashed out and made a nice chunk of change doing it..the only people who won from this development. Notice too, that the new owners are not going to comment on the possibility of an expansion to make the casino a resort..it's going to stay a casino for the moment. Another big fib exposed.

It doesn't seem to have made much difference in the local area, from where I sit in Norway-as if it doesn't even exist. You can't even tell we have one in the region. That's how much impact it hasn't had here.

But at least someone made some bucks from it. Too bad it wasn't the rest of us.

FRANK EARLEY's picture

Hey, I just thought of something.....

Now that the home office of the casino will be located in Louisville KY, does that wipe out the hundred mile limit on gambling facilities to close together? I mean after this, who wouldn't want to try their hand at opening their own casino. All it takes is being able to fool enough people into getting the proper permits, and before you know it, your raking in the big bucks. Also, unlike selling a house, when your ready to flip this place, you evidently don't even need to advertise. Hell I guess casino's somehow magically sell themselves. Oh, what this could do to "Craigs List".
What will become of those cute little folksy, TV commercials Bob Marley did? Can we expect to hear about loading "Motha" and the friends into the back of the Chevy, and heading on up the road to Churchill Downs? I don't know, it just doesn't have the same ring to it. I think this story will become much more interesting as more of the facts emerge.......

Eric  LeBlanc's picture

I don't see the problem. What

I don't see the problem. What harm is the casino causing? If you want to complain about an industry doing harm to Mainers complain about the paper and pulp industry. Paper mills, aka pollution factories, are literally killing Mainers but nobody cares as long as Joe Lunchbox can make dump runs in his $40,000 pickup truck. You people are too much.

DOROTHY PETERS's picture

Casinos: what do you expect

Why all the surprise? This isn’t really even news. It is a follow up story. Folks like Dennis Bailey and myself tried to tell the gullible people of Maine that the casino vote was not about old Bobby Bayre wanting to create jobs. He could care less what happens to Maine, to Oxford County, or to Oxford town. He and his buddies would have said and done anything to get that casino passed. The people and the press of Maine were either to stupid to understand what was up or didn’t care. The sale of this casino was destined from inception of the idea to put it out to vote. It is a common pattern and a common thread among successful casino campaigns. Find a local need. Find a local person with enough credibility put the need forward. Tell any lies necessary to sell the concept. After the vote, put the damned casino on the sales block asap. Can’t blame the Bayre group here. The fault lies squarely with our gullible Maine press and our short sighted electorate. Bayre group is cashing out and singing all the way to the bank.

What do you say people of Maine. Soon both casinos will be owned by out of sate interests and that giant sucking sound you here will be the sound of the poor gullible people of Maine listening to their few bucks being hauled away by the privileged interests. We should get together and send a letter of thanks to Bobby Bayre and his confederates. They taught us another good lesson. There is no honor among most men when it comes to making money. They will sell out their neighbors, their friends, and even their relatives if the need arises. The Bayer's are selling us out, and I hope they ride off into the sunset and never darken poor Maine’s door again. They have lied and chiseled their way to mega riches, and I hope they think happy thoughts about themselves as they spend their money.

I can hardly wait to read about the next casino scheme. What sort of beneficiary chain will the money grabbers cobble together to try and get their deal passed. What outrageous promises of jobs and riches will be promised to Maine people, and allowed to promulgate unchallenged by a weak press that doesn’t deal often in depth of casino arguments. Those of us who oppose casinos because they destroy the small businesses around them; draw 95% of their money from a 75 miles radius; and carry their loot out of state know we are correct. What we sell is historically accurate all over the United States. It doesn’t take a genius to understand that casinos openings are not tools promoting economic development. Casino developers are money sucking vultures playing on the weaknesses of poor people and selling snake oil to the voters. The Oxford casino is no different.

Get over it Mike, you and Dennis lost the referendum 2 years ago

It's not as if, like Beam is doing to White Rock, they're pulling up stakes and shifting to Kentucky. The Casino is here to stay, Mike, in whatever form. It is providing jobs to local people. Their money will be staying int he area. The taxes from the operation are still going to the State and the towns. It is disappointing that they have gone back on their word and they are backing out of local ownership, but in the larger picture, the benefits are still there.

FRANK EARLEY's picture

Wayne, here's a little phrase you may consider using......

" This is just the beginning",
It's been proven over and over again, when the ownership goes south, the money goes south.
People read the articles like the one the other day trying to show how good this sale is to the area. How good the jobs will be and how much more there is to accomplish. They read about all the other ventures this organization is involved in to show how well they will treat the present employee's in Maine. All in all, what a great neighbor they are going to be.
I used to wonder how anyone with an IQ larger than their hat size, could possibly fall for the same load of "Mularky" over and over again. I finally came to the realization that, people will only hear what they want to hear, somehow filtering out the rest. When all the dust settles, they are actually happy because they have convinced themselves, all is well.
I don't know if this new company is any good for the state or not, that's to be seen. I do know however, it's a large corporation, they have indulged us with that information in order to win our approval. As a large corporation, they have only one goal, to provide a steady flow of profits to their stock holders. There is no written or unwritten obligation to the people of Maine. By law, their first obligation is to the board of directors, and the stock holders who share funding to support and run Oxford Casino. I'm sure they have attorney's working right now on rescinding some if not all the promises made when the casino was approved. The money that was generated will now go to Kentucky, then divided up to whoever they feel should receive it.
Sometimes I get the feeling that some people actually believe that these buy-outs, are for the good of the people of Maine. That goal may be on the list, but it's no where near the top of the list. Just as the State of Maine did at the beginning, Churchill Downs now is looking forward to huge profits. All those profits are being funneled directly to Kentucky. Lets hope the Legislature see's fit to block the sale. It would be the only hope of schools benefiting any more from the casino, and keep the casino from becoming just another unprofitable tourist destination on Rt 26......................

FRANK EARLEY's picture

I guess I should have waited.....

Evidently the first version of this story didn't quite please everyone. I noticed this version presents a much rosier view of this sale. I'm afraid you just can't sugarcoat this one. It's done, we have to live with it, we don't have to agree with it.
I don't believe for one second, that this was just a normal business decision, intended to continue the strong growth potential, and protect jobs. I feel it was part of the plan all along.
Many of the very terms used in this second draft, are terms I've heard before, all by other CEO's, attempting to sell the strong future, business friendly, optimistic view of their company just before they jump ship and dump the company. One night I sat thru a two hour company wide meeting, with all the big wigs trumpeting the fact that the economy was strong, the sales were right on target, our future looks great, and a bunch of other generic terms to appear upbeat. Upon returning to my lab, I was informed via E-Mail, that due to slow sales and an overstock of in house inventory, I was being laid off, fifteen minutes later a security guard arrived to escort me off the property. So much for the "No Layoff" promise I received fourteen months earlier. My only regret? Not being laid off BEFORE the damn meeting. I honestly don't know how these people can look at themselves in the mirror.
I had a feeling all along that this casino business was not divulging the entire truth, I just wonder how they can explain to the other bidders, who lost out to the "Local Ownership and Local Jobs"line of BS. There's no way, they didn't realize that their whole business plan was a lie from the very beginning. Well there's nothing to do now but wait and see. I guess the lesson learned here is, if a big casino interest wants into an area, there's no such thing as a little white lie......

PAUL ST JEAN's picture

We're occupying the same page

We're occupying the same page on this one, my friend. Someone foresaw a nice opportunity to turn over a quick 30 million. Build it for 165 mill, turn over a 30 mill profit in the first six months and then sell it after a year for 160 mill. Not too shabby, I'd say.
It seems that new businesses that come to Maine seem to be merely passing though on their way to Kentucky. White Rock/Jim Beam comes to mind.

Kim Waite's picture

The South

is taking over Maine. Scary!

PAUL ST JEAN's picture

Welcome to ME'tucky; the way

Welcome to ME'tucky; the way life will never be.

ERNEST LABBE's picture

Pirate I usually

Pirate I usually agree with you. However the Casino is going nowhere. While they are buying a going business with a good name it would be a worthless name in say Louisville KY.

Now as far as the major investors they all have a history of providing decent jobs to Mainers. Other than top management I wouldn't expect to see many personel changes. Thats what rich people do, provide jobs.

PAUL ST JEAN's picture

I realize the physicality of

I realize the physicality of the Casino is not going to change, although it wouldn't surprise me to see an upscale laundromat occupying that building in 5 years. After all, it IS Maine, you know.
This might be a good time for Governor LePage to send a contingent of ambassadors to Louisville, KY for the purpose of maybe persuading the Louisville Slugger Bat Company to move to Portland. 0O:-)

David Pinkham's picture

Bulldozed again !!

Well Mainers we took another BS gambling story and got bulldozed again!!

First it was the lottery. We voted for a single drawing every Saturday. Then it went to Wed. and Sat. Then they realized the odds were too favorable to winners, so they increased the number choices. Then they added a 4-digit Daily pick, then a 3-digit Daily pick, then twice a day. Then they doubled the cost of the ticket. So the promise of a buck a week on lottery has skyrocketed to eighteen bucks a week.

Here are quotes from the shysters who pushed through the Casino:

"2,700 jobs paying an average $35,000". Well SJ staff, why don't you try to interview one of those $35K waitresses, or busboys, or line cooks, or parking attendants??

According the the story today "It employs more than 400 employees." I guess that's pretty close to 2,700 for math-challenged Mainers.

"The owners are Maine businesspeople investing private money."

"Lally said is finding a casino management that will allow the Black Bear Entertainment investors to retain control of the casino. "The control and the Maine ownership is not going away.""

Really?? "Churchill Downs Inc. has its headquarters in Louisville, Ky."

Lally should have talked to his partner Bahre, who thought he was investing in a jobs project. And now that they've reached 15% of their promise, it's time to sellout and run to the bank with their ill gotten gains.

Will we ever learn?

PAUL ST JEAN's picture

50 agrees on that one, David.

50 agrees on that one, David.

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