Gambling company Churchill Downs acquires Big Fish Games for $885 million

Churchill Downs, best known as the racecourse that hosts the Kentucky Derby, is in fact a major real-world and online betting conglomerate -- and now plans to spend up to $885 million to acquire casual game developer and distributor Big Fish Games. The massive spend includes a base payment of $485 million with a potential earn-out of up to $350 million based on Big Fish's 2015 performance -- along with a possible $50 million bonus for Big Fish CEO Paul Thelen for 2016. Churchill Downs already operates Twinspires.com, an online horse racing gambling site, and has video poker businesses in casinos. The Big Fish buy seems likely to be a road into the lucrative mobile and online casino game market, though the companies have not yet announced any post-merger plans. Nearly three years ago, slot machine manufacturer IGT paid $500 million for developer Double Down Interactive in a similar move. Big Fish itself purchased social casino game developer Self Aware Games two years ago.