Churchill Downs acquires “crown jewel of Illinois gaming” in latest acquisition deal within the US land-based casino space
Gambling company Churchill Downs Incorporated announced on Wednesday that it has reached an agreement to buy a majority stake in Rivers Casino Des Plaines in Des Plaines, Illinois. The transaction involves Churchill Downs’ acquisition of “certain of the ownership interests” of Midwest Gaming Holdings, parent company of the gaming venue.
Rivers Casino Des Plaines first opened doors in 2011. The property is located two miles from O’Hare International Airport, and is thus able to benefit from domestic and international passenger traffic at one of the busiest US airports. The casino features a 44,000-square-foot gaming floor with nearly 1,000 slot machines and 58 table games as well as multiple food and beverage facilities and an event center.
Under the terms of the deal, Churchill Downs will assume ownership of at least 50.1% of Midwest Gaming and will pay no more than $500 million in cash to complete the transaction. Churchill Downs has thus agreed to buy 100% of the ownership stake in the Des Plaines-based casino’s parent company from Clairvest Group affiliates and co-investors for $291 million and additional units of Midwest Gaming currently owned by High Plaines Gaming, an affiliate of major gambling group Rush Street Gaming, which will result in a cash consideration of no less than $326 million.
It has also become known that Rush Street will keep managing the day-to-day operations of the Des Plaines casino. Once the transaction is complete, the company expects to hold approximately the same stake in the gambling venue as it currently owns.
The deal is subject to approval from the Illinois Gaming Board and other customary closing conditions and is expected to be finalized in the first half of 2019.
Crown Jewel of Illinois Gaming
Commenting on the deal, Churchill Downs CEO Bill Carstanjen said that it came as part of his company’s strategy to invest in gaming properties with “stable, predictable cash flows in diverse markets.” the executive further pointed out that the Des Plaines casino is the “crown jewel of Illinois gaming” and one of the nation’s premier casinos.
The acquisition of Rivers Casino Des Plaines is not the first time Churchill Downs and Rush Street have engaged in a deal of this kind. In 2012, the former company bought Riverwalk Casino and Hotel in Vicksburg, Mississippi from Rush Street.
Greg Carlin, CEO of Midwest Gaming, commented on the recently announced transaction, praising Churchill Downs for creating significant shareholder value over the years and expressing optimism that Rivers Casino will continue to be one of North America’s most successful gambling destinations under the Churchill Downs and Rush Street stewardship.
The recently announced transaction comes as another manifestation of a growing trend of major US land-based gambling companies merging or acquiring properties in a bid to cement their positions in a highly competitive environment.
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The post Churchill Downs Acquires Majority Stake in Rivers Casino Des Plaines appeared first on Casino News Daily.

According to Chicago’s Daily Herald, Churchill Downs is on the cusp of clinching a majority stake of Midwest Gaming that owns Rivers Casino Des Plaines property in Illinois. The acquisition of 50.1% in shares of the company is close at hand and is principally motivated by the eventual expanding beyond Arlington International Racecourse. When the $445-million Rivers Casino opens next month near O'Hare International Airport in Des Plaines, Ill., its happy co-owners will include the Quad-Cities' Bob Ontiveros and four members of his.

The writing that’s been on the wall for months regarding the Arlington racetrack sale has a voice behind it finally. It’s more certain now than ever that if ChurchillDowns is to operate a “racino” in Illinois, it won’t be in Arlington Heights.

Churchill Downs CEO BillCarstanjen is that voice. Precisely what Arlington International Racecourse‘s fate will be, however, is still unknown.

What Carstanjen said about a possible Arlington racetrack sale

On a recent company earnings call, Carstanjen confirmed what many had suspected. Churchill Downs doesn’t have grand designs for its future at the racecourse. Carstanjen said:

“That land will have a higher and better purpose for something else at some point. But we want to work constructively with all of the constituencies in the market to see if there’s an opportunity to move the license or, otherwise, change the circumstances so that racing can continue in Illinois. We’ve been patient and thoughtful and constructive with the parties up in that jurisdiction, but long term, that land gets sold and that license will need to move if it’s going to continue.”

It seems it’s only a matter of time until Churchill Downs gallops away from the property. Indicators showing that would be the case arose last September.

It was then that Churchill Downs announced it would not seek a license for casino gaming at Arlington. That was a stunning reversal, especially after Churchill Downs’ decades of lobbying for that exact privilege.

At the time, Carstanjen cited the tax rate for poker, slots and table games. He expressed doubt that a racino would generate enough revenue to cover expenses, much less show a profit.

The more recent Carstanjen quote affirms that Churchill Downs is looking elsewhere. While there’s an obvious alternative, it’s not entirely up to Churchill Downs.

State, city governments yet to weigh in

Who Owns Rivers Casino In Des Plaines Illinois Coronavirus

Churchill Downs has its eyes on another IL city, Waukegan. It was one of three license applicants for casino gaming there, which the city forwarded to the Illinois Gaming Board (IGB) for consideration.

The board can only approve one license there, however. There’s no guarantee that Churchill Downs will be the IGB’s selection. Additionally, there’s no clear timeline for that decision.

The other two applicants are Full House Resorts and North Point Casino.

Rush Street Gaming CEO NeilBluhm, whose company owns RiversCasino in Des Plaines, is a party to Churchill Downs’ bid as well.

Then there’s the matter of whether the horse racing operations would move to Waukegan. Churchill Downs has a license for that with the state it can move, so that’s not an issue.

What may be an issue, however, is Waukegan itself. Mayor SamCunningham says his office hasn’t had any discussions about horse racing in his city. Cunningham said:

“In any economic times, we’d be foolish not to listen to any proposal by a credible developer. But a racino? Right now, our top priority is to get our citizens through these times and then, hopefully, look forward to a new casino opening sometime late next year.”

It’s uncertain whether Churchill Downs would sell the Arlington property before getting all its “ducks in a row” for Waukegan. Right now, what it might do if the IGB grants the license to a competitor is also a matter of speculation.

If Waukegan doesn’t work out, then what?

In January, two parties reportedly showedinterest in the Arlington racecourse. The reports went on to state that Churchill Downs rebuffed those inquiries, however.

The reason for that disinterest should be obvious. It’s impossible to offer horse racing without the proper facility. That, in turn, could affect Churchill Downs’ ability to move its racing license to Waukegan.

So far, Waukegan is the only place where Churchill Downs has applied for a gaming license. Although the latest round of gambling expansion authorized six new casinos in different parts of IL, it’s late in the game to file the paperwork elsewhere.

Who Owns Rivers Casino In Des Plaines Illinois Map

All of Churchill Downs’ money appears to be on Waukegan. If that “horse” doesn’t run, the company could be left with a situation it clearly has no desire to be in.