Churchill Downs invested $2.5 million into NLR Entertainment, owned by Nicholas Ribis, with the expectation that he would purchase the Showboat casino in Atlantic City. It goes without saying that the $2.5 million investment would have secured Churchill Downs a spot in the online casino world.
Aside from the investment to NLR Entertainment, Churchill Downs spent an additional $10 million developing the systems they required to receive online casino bets. This included bringing on an additional 50 employees to develop the software and gambling system. However Ribis did not purchase the Showboat casino as expected— and the two parties are now in an ongoing lawsuit.
However, the Louisiana based horse racing and casino company has not given up their dreams of operating online casinos. While the software they developed will not move forward for online poker and other online games in New Jersey, they hope they will be able to utilize it within another state that legalizes online gambling.
The primary challenge is that most states require brick-and-mortar casinos to operate and regulate their own online gambling—meaning that Churchill Downs will have to purchase a casino—or partner with another casino owner.
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