Churchill Downs Inc., owner of Arlington Park in Arlington Heights and host of the Kentucky Derby, announced Wednesday it signed an agreement to buy Rivers Casino in Des Plaines for up to $500 million.

If the deal wins the approval of the Illinois Gaming Board, Churchill Downs would have a 50.1 percent ownership stake in Midwest Gaming Holdings, the parent company of Rivers Casino that's owned by Neil Bluhm.

Rivers

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. Rush Street Gaming owns and operates Rivers Casino in Pittsburgh, SugarHouse Casino in Philadelphia, Rivers Casino in Des Plaines, Illinois, and Rivers Casino & Resort in Schenectady, New York.

The deal starts with Churchill Downs' buying all of investment firm Clairvest Group's shares in Midwest Gaming for $291 million. Then Churchill Downs 'offers to purchase' shares of Midwest Gaming held by Rush Street Gaming affiliate High Plaines Gaming LLC, as well as Casino Investors LLC.

Rivers Casino In Des Plaines Illinois

Rush Street Gaming and Clairvest Group have controlled the casino since it opened in 2011. Rush Street would continue to manage the daily operations of the casino under the deal, Churchill Downs said. Bluhm is the co-founder and chairman of Rush Street Gaming.

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Churchill Downs CEO Bill Carstanjen said the purchase continues the company's strategy of buying properties in populous states likely to allow video gambling and sports betting in casinos.

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'We are thrilled to partner with Neil Bluhm and Rush Street Gaming in Rivers Des Plaines,' Carstanjen said in a news release. 'This property is the crown jewel of Illinois gaming and one of the country's premier casinos. This is an exciting opportunity for CDI, given Rivers Des Plaines' superior design, unparalleled location in the Chicagoland market, high-quality amenities and outstanding team.'

But Carstanjen also said on an investors call that Bluhm's and Rush Street Gaming's involvement was critical to the deal, the journal Louisville Business First reported. 'We deeply respect his organization's business and political acumen, and it was critical to our analysis that he wanted to keep his ownership participation and involvement going forward,' he said.

Bluhm would remain board chairman of Midwest Gaming, Politico reported.

Greg Carlin, CEO of Midwest Gaming and Rush Street Gaming, said 'we are excited to be partnering with' Churchill Downs. 'We will work together to ensure that Rivers Casino in Des Plaines continues to be one of the most successful casino destinations in North America.'

Churchill Downs said it anticipates the sale would close in the first half of 2019.

Longtime Arlington Park owner Richard Duchossois sold Arlington Park to Churchill Downs in 2000. Arlington has long struggled to compete with casinos in the suburbs for gambling business, especially the Grand Victoria Casino in Elgin and the more recent Rivers Casino. It has sought permission from state lawmakers to install slot machines -- as many as 1,200 under some proposals -- and games like blackjack or craps, but efforts have fallen flat over nearly two decades.

Arlington Heights Mayor Tom Hayes said in July he and the village board support anything in the short or long term that will help Arlington Park remain open. He said he drafted a letter to state leaders in 2015 in support of expanded gambling at the track, despite his initial opposition.

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Who Owns Rivers Casino In Des Plaines Illinois Map

Meanwhile, Rivers Casino was the only one among the state's 10 casinos that increased revenues this year compared to last, data show. The Reno, Nevada-based Eldorado Resorts bought the Grand Victoria Casino in April for $327.5 million. The Grand Victoria's revenues have steadily declined over the years, despite a slight bump in 2017.

Who Owns Rivers Casino In Des Plaines Illinois Plaines Il

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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