03/09/2010 12:00AM

Beulah agrees to be sold to Penn National


Beulah Park in Columbus, Ohio, has agreed to be acquired by Penn National Gaming Inc. in a deal that will also settle a lawsuit filed by Beulah against the publicly traded company last year, Ohio racing officials said on Monday.

If the deal closes, the acquisition will further strengthen Penn National's hand in Ohio, where the company already owns one harness track, Toledo Raceway, and has the right to build and operate two casinos, one in Columbus and one in Toledo. Penn National won the right to build the casinos last year through a public referendum that it sponsored.

The deal also will allow Penn National to avoid a trial to settle allegations lodged by Beulah's majority owner, Charles Ruma, that the company breached a 2006 contract with the track by failing to support a measure legalizing slot machines at racetracks and pressing ahead with its own efforts to sponsor the referendum for stand-alone casinos. The 2006 contract gave Penn National an option to buy Beulah if slot machines were authorized at racetracks.

Eric Schippers, a spokesperson for Penn National, said the company would not disclose financial details about the deal. The acquisition is subject to a 45-day due diligence period and the approval of the Ohio State Racing Commission.

Penn National has said in financial statements filed this year that it intends to spend $400 million on the casino in Columbus and $300 million on the casino in Toledo. In a release, Peter Carlino, the company's chief executive officer, said the acquisition will "provide us another opportunity to benefit from the possible legalization of [slot machines] at the state's seven racetracks," even though legalization of slot machines at racetracks would add five sites to compete with Penn's properties, in addition to two other free-standing casinos planned for Cincinnati and Cleveland.

Last year, prior to the referendum authorizing casinos, Gov. Ted Strickland authorized slot machines at racetracks in a budget measure. The measure was blocked by the Ohio Supreme Court after a group filed a lawsuit contending that the measure could not be implemented without first passing in a referendum.

Dave Basler, the executive director of the Ohio Horsemen's Benevolent and Protective Association, said that he believed the transaction was a "positive" for Ohio horsemen.

"Penn National has made significant improvements to Toledo Raceway since buying it in 2005, and we look forward to them making positive improvements to Beulah," Basler said. Basler added that he believed Penn National would retain Beulah's traditional racing dates, which total about 140 each year.

Schippers said that Penn National expected to maintain "the status quo" on race dates, at least in the short term.

"Obviously, we may revisit that," he said.