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Tag: Churchill Downs

Nasdaq triggers delisting process for Urban One

Nasdaq has begun the delisting process for Urban One, the Maryland-based media company behind the proposed casino in Richmond, because it has not filed quarterly finance reports for fiscal year 2023 on time.

The stock exchange’s notification does not affect trading of Urban One or its presence on Nasdaq yet; according to a Friday news release by Urban One, the company will “request a hearing before a Nasdaq Hearings Panel. The hearing request will automatically stay any suspension or delisting action through Oct. 20, 2023.”

A spokesperson for Urban One said Monday there won’t be any impact on the current casino referendum campaign underway in Richmond.

Urban One acknowledged in its news release that it has not yet filed financial reports for the first and second quarters of fiscal 2023 with the Securities and Exchange Commission, due to errors related to its investment in RVA Entertainment Holdings, the limited liability corporation chosen in 2021 and 2023 as the operator for the proposed $562 million casino in Richmond, which is up for a second referendum vote in November.

In its Sept. 29 news release, Urban One says that it “identified certain errors with regard to the timing of expense recognition of non-cash stock based compensation and the accounting for the company’s investment in the operations of its Richmond casino joint venture, RVA Entertainment Holdings LLC, the activities of which primarily related to 2021.” To address the issue, Urban One says it is “currently evaluating the related accounting for the non-cash stock based compensation matter and if the Company’s investment in RVA Entertainment Holdings LLC should have been consolidated during the historical periods due to its then-75% ownership interest.”

In a July board meeting, the media company dismissed BDO as its independent accounting firm and hired Ernst & Young to serve as its public accounting firm for its fiscal year 2023, which ends Dec. 31.

Nasdaq previously notified Urban One of its late SEC filings in three letters this year, starting April 3, and the stock exchange previously gave the company a 180-day extension to file 2022 Form 10-K and the Q1 2023 Form 10-Q by Sept. 27. The 10-K form was filed in June, but the 10-Q form is still outstanding.

Urban One’s news release says that it “is in the process of completing its Q1 2023 Form 10-Q and anticipates filing the delinquent reports as soon as practicable after resolution of the discrete accounting issues” related to RVA Entertainment Holdings.

In an 8-K form filed by Urban One to the SEC on Sept. 28, the company reports $109.9 million in consolidated revenue during the first quarter of the year, ending March 31.

Urban One was the majority partner in the 2021 proposed casino in Richmond, with Peninsula Pacific Entertainment as minority partner, but the city’s referendum failed by 1,200 votes in November 2021. After much jockeying in the General Assembly, Richmond voters will once again vote this fall on a casino referendum, this time a proposal by Urban One and Churchill Downs, which bought PPE late last year and now owns the state’s Rosie’s Gaming Emporium franchise and Colonial Downs.

The renamed Richmond Grand Resort & Casino, if passed by voters, would include a 250-room hotel, a 3,000-seat concert venue, a $26.5 million upfront payment to the city government, an estimated 1,300 permanent jobs with an average salary of $55,000 and a predicted $30 million in annual tax revenue and $16 million over 10 years in charitable contributions.

According to Virginia Public Access Project’s finance report for political donations made through Aug. 31, Urban One and Churchill Downs contributed $8.14 million to the Richmond Wins, Vote Yes pro-casino PAC in August, more than three times the 2021 pro-casino campaign budget of $2.6 million.

Casino backers gamble on November revote

On Aug. 31, a new name was unveiled for the proposed $562 million resort casino that Richmond voters will be reconsidering in a November referendum: the Richmond Grand Resort & Casino.

But not much else appears new about the project.

The Richmond Grand Resort & Casino seems virtually identical to the proposed ONE Casino + Resort that voters shot down in a 2021 referendum. Maryland-based Urban One once again is pitching the casino, joined by Kentucky-based Churchill Downs, which last year purchased the assets of Urban One’s previous casino partner, Peninsula Pacific Entertainment.

Just like the earlier pitch, the Richmond Grand proposal includes a 250-room hotel, a 3,000-seat concert venue and a soundstage where Urban One pledges to invest $50 million over 10 years in TV, movie and audio productions. Also like before, the casino promises to make a $26.5 million upfront payment to the city government and forecasts that it will create an estimated 1,300 permanent jobs and generate $30 million in annual tax revenue. If passed, it would be built on the same 100-acre South Side site proposed in 2021.

Urban One and Churchill Downs say the new pitch reflects an extensive survey of Richmond voters who supported and opposed the casino referendum two years ago.

Urban One CEO Alfred Liggins acknowledged at the plan’s rollout that although his media conglomerate knows plenty about advertising, it is new to amassing political support. According to state campaign finance records, Urban One gave $3.9 million and Churchill Downs donated $3.1 million to a pro-casino PAC in August — more than three times what was spent in 2021.

Churchill Downs, which owns the Kentucky Derby and is an investor in casinos in 13 states, is an equal partner in the project with Urban One. If the referendum passes, it will become a significant part of the company’s holdings in Virginia, which also include Colonial Downs in New Kent County and six Rosie’s Gaming Emporiums across the state.

Churchill Downs CEO William Carstanjen didn’t specify what his company plans to do if the Richmond casino referendum fails a second time.

“This is a project that needs to get done in Richmond … and we put together the team that can do it,” Carstanjen says. “Now we just have to take our message to the citizens of Richmond and convince them, and we think we can do that.”

Ruling clears way again for Richmond casino referendum

A Richmond Circuit Court judge issued another ruling Wednesday clearing the way for a Richmond casino referendum to appear on ballots this November.

Richmond Circuit Court Judge W. Reilly Marchant ruled against the Richmond Lodge No. 1 of the Good Lions Inc., a nonprofit organization that had filed a motion to block the casino vote. The Good Lions’ Richmond lodge, which raises money through charitable bingo games held twice weekly, claimed that the Richmond City Council had not run a competitive bidding process before voting in June to select RVA Entertainment Holdings LLC — a joint venture between Urban One Inc. and Churchill Downs Inc. — as the city’s preferred casino operator. If approved by voters, the two would establish the $562.5 million ONE Casino + Resort in South Richmond.

The group also said that it stands to lose charitable income if the casino is built. Richmond City Council, in turn, argued that the Good Lions “lacks standing because it does not, and cannot, assert any claim or defense that is germane to this proceeding.”

On Aug. 15, Marchant, who had ruled July 25 to place the referendum on ballots, placed an emergency suspension of the earlier order while he considered the Good Lions’ motions to intervene and reconsider. He gave the city and the Good Lions three days to support their positions and said he would rule Wednesday.

In the order, Marchant wrote that the Good Lions does not have standing to intervene. “Arguably, Good Lions’ alleged future loss of gaming revenue might be fairly traceable to the 2019 legislation of the Virginia General Assembly allowing casino gambling, but that government action is not what Good Lions seeks to challenge. … Good Lions’ challenge to the City Council’s no bid/no notice process for selecting an operator of the casino, where Good Lions does not seek to be the operator, is not a challenge of government action fairly traceable to its expected loss of revenue,” he concluded.

Chap Petersen, a Fairfax County state senator and lawyer for the Good Lions, said after the ruling that he was disappointed in the decision and that the judge “took a very narrow view” by basing part of the ruling on the fact that Good Lions wasn’t a “frustrated bidder” for the casino project, which was defeated by 1,200 votes in 2021. Urban One, which previously partnered with Colonial Downs owner Peninsula Pacific Entertainment, was selected earlier in 2021 from a group of casino operator candidates.

Churchill Downs, which owns the Kentucky Derby, purchased Peninsula Pacific in November 2022 and became Urban One’s new partner in the group’s second bid for a Richmond casino — but there was no public call for proposals this time around before the City Council vote in June.

“You have the exact same vendor being put on the ballot without a competitive bidding process. The whole thing is very irregular,” said Petersen, who added that although he could appeal the decision, “time is very short.”

Michael Kelly, spokesman for the proposed casino project, said in a statement Wednesday, “We’re glad this matter is now resolved. This resort and entertainment complex will be one of the largest private sector investments in the City of Richmond in decades, creating 1,300 good-paying jobs and $30 million in annual tax revenue to invest in a stronger city, all without a single penny of tax breaks, incentives or public funds. We look forward to sharing our vision for the project and the many citywide benefits it will deliver for all Richmonders.”

“I am pleased to see Judge Marchant rule in favor of the City of Richmond,” Mayor Levar Stoney, a major proponent of the casino, added in his statement. “If approved this November, the proposed destination resort and casino will provide 1,300 good-paying jobs and an estimated $30 million in annual revenue to tackle our community’s greatest needs. On top of adding to Richmond’s record development and growth, this project will change the economic trajectory of South Side [Richmond] for years to come.”

Richmond is the last of five economically challenged Virginia cities to vote on a casino referendum after the Virginia General Assembly allowed Bristol, Danville, Norfolk, Portsmouth and Richmond to have one commercial casino per locality if approved by local voters. The other four cities passed referendums by large margins in 2020. Portsmouth is the first city to open its permanent casino, and Bristol and Danville have opened temporary casinos while construction of permanent casino resorts take place.