In a conference call with stock analysts to discuss the company's second-quarter earnings, Churchill chief financial officer Bill Mudd said the deal with Saratoga Harness, which includes a management contract for casinos in New York and Colorado, is "strategically important because it provides CDI with an option in Internet gaming in two states, should it be legalized."

Churchill Downs has ramped up its Internet gambling division, spending millions on an as-yet-unlaunched platform and attempting to buy into an Atlantic City casino to gain access to the online gambling market. Churchill also has invested in an online poker presence, although it does not offer online poker.

Churchill has launched a bingo-type online game, called Luckity, that offers players real money rewards.

Bill Carstanjen, Churchill Downs' president and chief operating officer, said Churchill officials think the deal with Saratoga Harness could improve chances to win a joint bid to build another New York casino.

He said the potential for Internet gambling is "a plus. It wasn't the driver but is always something we look for in the mix."