updated 4:28 p.m. ET Sept. 24, 2004

NEW ORLEANS - Churchill Downs’ $47 million purchase of the Fair Grounds Race Course was approved Friday by a federal bankruptcy judge.

The Fair Grounds becomes the seventh race track in the stable of Louisville, Ky.-based Churchill Downs Inc. Churchill Downs said it hoped to close the deal by Oct. 15 before the traditional start of the Fair Grounds’ live racing season on Thanksgiving Day.

In a statement, Churchill Downs president Thomas Meeker called the deal “a welcome ending to a lengthy process and the advent of a new era for the Fair Grounds, CDI and the New Orleans community.”

The purchase includes the historic New Orleans race track and 10 off-track betting parlors. The track’s 82-day annual racing meet is scheduled to run from Nov. 25-March 27.

The Fair Grounds will give Churchill Downs its first major winter track — an important component of its simulcast wagering network — and an opening into expanded gambling. The track is in line for an on-track casino with several hundred slot machines.

Besides its marquee Churchill Downs track in Louisville, the company owns Arlington Park near Chicago, Hollywood Park in Inglewood, Calif., Calder Race Course in Miami, Ellis Park in Henderson, Ky.; and Hoosier Park in Anderson, Ind. — none of which run the entire winter.

The Fair Grounds, which is currently controlled by the Krantz family of New Orleans, was forced into bankruptcy protection in August 2003 after state courts ruled the track owed horsemen more than $90 million for the underpayments of video poker proceeds to racing purses.

The horsemen and the track have agreed to settle that dispute for $25 million.

In August, Mike Pegram, an Arizona businessman who won the 1998 Kentucky Derby and Preakness Stakes as the owner of Real Quiet, thought he had a $40 million deal to make him majority owner of the Fair Grounds.

But the bankruptcy reorganization remained open and Churchill Downs made a counteroffer that was accepted Friday by the court.

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