Churchill Downs claims it was misled in Atlantic City casino deal
LOUISVILLE, Ky. (WDRB) -- Churchill Downs Inc. (NASDAQ: CHDN) claims it was defrauded by an Atlantic City casino executive in a deal that would have allowed the Louisville company to launch an online gambling operation in New Jersey.
In a lawsuit filed Monday in Louisville, Churchill Downs says New Jersey businessman Nicholas L. Ribis strung the company along late last year by continually claiming he was close to purchasing Showboat Atlantic City Hotel and Casino from Caesars Entertainment Corp. -- but failing to close the deal.
Churchill had planned to develop "an internet gaming and online gambling system" connected to Showboat, as New Jersey law allows physical casinos to conduct online gaming, the suit says. Churchill Downs Interactive Gaming, a wholly owned subsidiary, was to be Showboat's "exclusive vendor" for online gambling.
Churchill paid Ribis' NLR Entertainment LLC a $2.5 million "earnest money" deposit and was to pay Ribis' business an additional $7.5 million once the sale of Showboat closed no later than Jan. 31, according to the complaint filed in Jefferson Circuit Court.
Churchill spent $10 million to purchase intellectual property and to hire more than 20 engineers to develop the online gaming platform, the suit says.
Churchill seeks to recoup the $2.5 million deposit from Ribis and asks for unspecified damages to be determined at a trial.
Churchill spokeswoman Courtney Norris declined to comment.
WDRB could not find contact information for Ribis or his company.
A 2006 New York Times article describes a "Nicholas Ribis" as a "longtime casino industry figure."
Other newspapers have identified Ribis in various casino roles including:
- Chief executive of the Atlantic Club Casino Hotel (2012, The Wall Street Journal)
- Vice chairman and chief executive officer of the Atlantic City Hilton Casino Resort (2011, the Press of Atlantic City)
- Co-owner of Resorts Atlantic City (2009, the Newark Star-Ledger)
- President and CEO of Trump Hotels & Casino Resorts Inc. (1998, The Wall Street Journal)
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