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Churchill Downs Acquires Big Fish for $885 Million

Yep, that Churchill Downs.

Alexey Stiop /

This year’s big gaming acquirers include Facebook, Amazon, Microsoft — and now Churchill Downs. Yep, that one.

The parent company of the famous horse-racing track, which also owns other tracks and casinos as well as online gambling and wagering sites Luckity and TwinSpires, has bought Seattle-based casual gaming company Big Fish for $485 million, mostly in cash. An additional $350 million will be paid out if Big Fish meets its 2015 EBITDA goals, and CEO Paul Thelen will receive an additional $50 million if 2016 bookings (a form of revenue) are up to snuff.

About $15 million of the initial $385 million will be paid to Thelen in common stock of Churchill Downs Incorporated.

The acquisition may seem unusual on its face, but actually makes a lot of sense. Big Fish offers hundreds of games for both browsers and mobile devices, but one of its biggest successes is a “social casino” game called Big Fish Casino, a mainstay of the top-grossing charts on iOS and Android.

(Social casino games, for the uninitiated, don’t let players win any real money, so they’re legal everywhere for all ages — but they’re often extremely profitable because players buy virtual currency within them that then doesn’t have to be paid back out.)

In a press release, Churchill Downs CEO Bill Carstanjen cautioned observers of the acquisition from assuming it will be integrated with TwinSpires, which the company uses to accept wagers for horse races around the world. Instead, he characterized it as an entrance into new verticals with different customers.

The deal is expected to close at the end of this year.

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