Online horse betting operator Youbet.com Inc. said late Tuesday that shareholders had approved its merger with Churchill Downs Inc.

Churchill Downs, located in Louisville, Ky., owns and operates tracks and the TwinSpires betting service. It will pay shareholders of Burbank-based Youbet 0.0598 of a share of Churchill Downs common stock and 97 cents in cash for each share of Youbet stock. That comes out to about $3.25 a share. The deal was valued at $128 million when first announced in November.

The company said more than 98 percent of shares voted were favor of the merger. The transaction is expected to close in the second quarter, pending regulatory approval.

Youbet.com shares earlier closed down 9 cents, or 3 percent, to $3 on the Nasdaq.