Accel Entertainment is to boost its betting and gaming presence in Illinois, US, by acquiring Fairmount Holdings, which owns FanDuel Sportsbook & Horse Racing in Collinsville.
The US$35m deal includes an Organisation Gaming Licence to offer casino gaming positions as well as a partnership with FanDuel – in the form of a revenue share agreement – to take part in sports wagering in the state via FanDuel’s master sports betting licence.
As well as acquiring an active racetrack, Accel said it intends to invest between $85m and $95m on top of the $35m deal to fund temporary and then permanent casino facilities and “modest track investments.”
“Accel’s five-year forecast suggests an adjusted EBITDA potential of $20m to $25m and over 75 per cent free cash flow conversion – pointing to a compelling cash flow return on capital,” the company said. “The asset will be the cornerstone in a local gaming platform that builds on Accel’s capabilities and strengths as a leading route-based operator.”
The transaction, which is subject to approval from the Illinois Gaming Board and is expected to complete in Q4 this year, addresses a total addressable market worth approximately $15bn.
The move has been approved by Accel’s board of directors and the board of directors of Fairmount Holdings.
Mayor Jeff Stehman of Collinsville, IL, said the transaction will “undoubtedly spur economic development along the Collinsville road corridor, creating jobs and bolstering our local economy.”
“We’ve long sought strategically aligned, well-capitalised and proven operators in the local gaming space to realise the full potential of this sportsbook and racetrack, and Accel is the ideal fit,” said Rob Vitale, current CEO and Chairman of Post Holdings.
