Churchill Downs and a group of investors are teaming on a deal to offer pari-mutuel wagering and simulcast betting for the first time in downtown Louisville at an exclusive private club.

The proposed partnership got a key approval from racing regulators Tuesday that paved the way for a "racetrack extension" to allow Churchill, a gaming industry giant, to broaden its footprint in its hometown and take its racing product to a new venue.

Churchill executives told the Kentucky Horse Racing Commission that the club allows the company to "improve access to simulcast wagering to horse racing fans who live and work near the downtown area of Louisville on a year-round basis."

The club is now under construction in the Hughes Building at 209 E. Main St., between Brook and Floyd streets. The venue will lease space to Churchill, which will serve as the licensee for live gambling at the property.

Three Louisville businessmen, Gene McLean, Dave Steinbrecher and Mike Schnell, are the owners and developers of the Louisville Thoroughbred Society and began work on the upscale lounge in spring 2016 after purchasing the building for $2.6 million.

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Keeneland, a rival track near Lexington, has operated a similar facility for years under a deal with the Thoroughbred Club of America.

In Louisville, the rich racing tradition offers a great opportunity to offer a year-round venue for race fans, a place where people can go and socialize and watch races when Churchill isn't racing, McLean said in an interview.

"If there's anywhere in the world where there should be a downtown place for horse racing, it's Louisville." He envisions "a Millionaire's Row without the racetrack."

The club will offer up to 12 self-service pari-mutuel wagering machines, which are common around Churchill's historic racetrack to supplement the betting windows with clerks to book bets for gamblers.

“This is an exciting partnership with a team that is passionate about seeing horse racing thrive in Kentucky,” Churchill Downs Racetrack President Kevin Flanery said in an announcement. “We are pleased to provide additional opportunities for fans to wager and look forward to seeing how the product is embraced by the locals.”

The society's website says that memberships will cost $1,595 a year, with a $525 initiation fee. The club will feature indoor and outdoor bars, handicapping seminars, contests and parties leading up to the Kentucky Derby, the Breeders' Cup and other big racing events in Kentucky "and throughout the world," according to the website.

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McLean and Schnell, a principal in Schnell Contracting Inc., have been horse owners together for several years. Steinbrecher, whose companies own several buildings, is an owner of Louisville-based Derek Engineering Inc.

Steinbrecher and Schnell also made a big investment on Main Street, renovating the Ice House building nearby at 217 E. Main St. into apartments and a popular events space.

There were hints from the outset that Churchill Downs track officials and the Thoroughbred Society creators may create a tighter partnership someday. When the club's partners confirmed details of its plans three years ago, Churchill issued a statement in which Flanery called the club “wonderful news" for the industry, for racing fans and for tourism.

Because the building is on the historic registry, McLean said, approvals for various modifications to it have taken extra time. Part of the club will feature an outdoor, rooftop cigar bar that required changes that added to the delays. The recent wet weather has also delayed the start of an attached parking garage.

The target date for completion now is set for early 2020, McLean said, just in time to rev up for Triple Crown races, starting with the Kentucky Derby in Louisville.

Mark Simendinger, a member of the horse racing commission and vice president of Kentucky Speedway, praised Churchill for an innovate approach to highlight racing downtown.

"Anything that promotes horse racing, I'm for it," he said. "I think it's going to be done in a very high-quality way."

Earlier coverage:Is Churchill Downs betting on expanded gaming with new facility?

Grace Schneider: 502-582-4082; gschneider@courierjournal.com; Twitter: @gesinfk. Support strong local journalism by subscribing today: courier-journal.com/graces.