Churchill completes Youbet purchase

Churchill Downs Inc. has completed its acquisition of Youbet.com in a transaction that will make Churchill the largest account-wagering company in the U.S.

The deal closed on Wednesday, Churchill said in a release, after drawing some scrutiny from federal anti-trust regulators. The deal valued Youbet.com at approximately $133 million at Wednesday's stock prices by giving Youbet shareholders 99 cents for each share of Youbet stock they owned and one share of Churchill stock for every 17 shares of Youbet stock.

Combined, the two companies took in $814.1 million in bets through their account-wagering operations in 2009, according to financial records for the companies and documents filed with the Oregon Racing Commission, where Churchill maintains a hub for its twinspires.com wagering platform. Television Games Network, the market leader in account wagering in the U.S., took in $511.3 million in bets in 2009, according to the Oregon Racing Commission.

Churchill reached the deal to merge with Youbet.com late in 2009. Although both companies said that they expected the deal to close in early 2010, the closing was delayed by federal anti-trust inquiries.

In 2009, according to the records, Youbet customers bet $480.3 million. Customers of twinspires.com bet $333.8 million.

The deal also includes United Tote, one of three large bet-processing companies in the U.S. United Tote's biggest customers are the tracks in Kentucky, including Churchill Downs in Louisville.

Churchill launched twinspires.com in 2007 and later that year reached a deal to buy three smaller competitors.

According to a release from Churchill, Rohit Thukral, the company's vice president of technology initiatives and the president of twinspires.com, will oversee Youbet's operations and the effort to fold the company into twinspires.com.

In the release, Churchill said that the deal "does not change any services available to Youbet.com or twinspires.com customers."

In 2009, Youbet.com had net income of $11.6 million on revenues of $111.4 million, but the results were boosted by $7.9 million in income-tax credits from previous losses at the company.

Youbet.com stock closed on Wednesday at $2.48 per share. The stock was delisted as of Thursday morning. Churchill's stock closed Wednesday at $32.85.