09/05/2012 2:55PM

Ellis Park sale gets Kentucky committee approval


LEXINGTON, Ky. – A committee of the Kentucky Horse Racing Commission on Wednesday unanimously voted to recommend that the commission approve the sale of 30 percent of Ellis Park in Henderson to an ownership group associated with Saratoga Harness and Casino in Saratoga Springs, N.Y.

The deal includes provisions that could enable the New York group to one day purchase all of the equity in Ellis. The 30 percent stake cost the group $4 million in cash, according to officials for both sides.

The committee’s recommendation will be taken up by the full commission at a meeting scheduled for Sept. 18. The commission is expected to approve the deal.

Ellis Park is currently owned by Ron Geary, who purchased the track for a nominal amount from Churchill Downs Inc. in 2006. Geary said he began soliciting partners for the track earlier this year seeking additional capital to pay for the installation of 187 gambling devices similar to slot machines at the track. The machines, called Instant Racing, began taking bets on Aug. 31, four days prior to Ellis closing its live meet.

Under the deal, the Saratoga group has an option to purchase an additional 20 percent in the track over the next two to four years, Geary said. The group has an additional option contingent on approval of the first option to buy all of the remaining equity in the track, Geary and officials for the group said at the meeting.

The options cannot be exercised without approval of the Kentucky racing commission, according to Susan Speckert, general counsel for the commission.

The price of the shares that the Saratoga group will be able to buy is contingent on a number of factors, including whether the Instant Racing devices survive a legal challenge and whether the Kentucky legislature approves additional gambling devices for Kentucky tracks, said the officials, who declined to provide specific details on the share prices.

The Saratoga group includes Dan Gerrity, the majority owner of Saratoga Harness, and James Featherstonaugh, the track’s minority owner, along with several management executives at the track and casino. The group’s officials told committee members that they were committed to maintaining live racing at Ellis Park.