Churchill Downs Inc. has apparently backed the wrong horse in a move to crack into the New Jersey online gambling market.
The company claims it was defrauded by an Atlantic City casino executive it believed was about to purchase an Atlantic City casino. When the purchase wasn’t made, the company was left out of New Jersey’s online gambling launch in November.
In a lawsuit filed in Louisville, Churchill Downs says New Jersey businessman Nicholas L. Ribis defrauded the company by continually claiming he was about to purchase the Showboat Atlantic City Hotel and Casino from Caesars Entertainment Corp. He never closed the deal.
To obtain an online casino license in New Jersey, companies must be partnered with an existing casino.
Churchill had planned to develop “an internet gaming and online gambling system” connected to Showboat. Churchill Downs Interactive Gaming was to be Showboat’s “exclusive vendor” for online gambling, according to a report by WDRB.com.
Churchill paid Ribis’ NLR Entertainment LLC a $2.5 million deposit and was to pay Ribis’ business an additional $7.5 million once the sale of Showboat closed no later than January 31, according to the complaint filed in Jefferson Circuit Court.
Further, the company 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, the suit says.
Ribis has not commented.
