Churchill Downs gets regulatory OK to buy Rivers Casino Des Plaines, the deal is expected to be closed next week
Churchill Downs Inc. received on Friday regulatory approval to acquire a majority stake in Rivers Casino Des Plaines in the Chicago area. However, the casino and racetrack operator will have to find female and minority investors in the property in order to be able to complete the deal, news outlet the Daily Herald reports.
Churchill Downs originally announced plans to buy a 50.1% stake in Rivers Casino’s parent company Midwest Gaming Holdings last fall. The Kentucky operator expected to pay around $326 million for the lion’s share of the top-performing casino in the state of Illinois.
As Casino News Daily reported last weekend, the state Gaming Board announced yesterday their decision about the proposed transaction. Members of the regulatory body voted 4-0 in favor of the transaction. It became known that Churchill Downs has decided to up its investment in Rivers Casino to nearly 62%.
The Illinois Gaming Board pointed out during its Friday hearing that female and minority ownership interests would drop from 17% at present to under 3% once the transaction is closed because most of the female and minority investors are selling their holding in the casino to Churchill Downs. As part of the deal, the company has agreed to sell up to 10% of Midwest Gaming to female and minority investors within 90 days.
Deal to Be Closed Next Week
Commenting on yesterday’s positive vote, Churchill Downs CEO Bill Carstanjen said that they expect to finalize the deal on Tuesday. The official further pointed out that Rivers Casino in Des Plaines is one of the most dynamic and successful properties in the whole of the United States.
Churchill Downs expects to pay $407 million in cash for the majority stake in the casino’s parent company. As mentioned above, the casino and racetrack owner is buying a nearly 62% stake, up from the initial plan for a 50.1% stake. Mr. Carstanjen said that additional investors agreed to sell their interest.
Rivers Casino will keep its Chairman and CEO after the transaction is complete. Illinois businessman Neil Bluhm will continue serving as Midwest Gaming’s Chairman, while Greg Carlin will retain his CEO role.
Mr. Bluhm told the Illinois Gaming Board yesterday that if Churchill Downs had not made its offer and Midwest Gaming had sold its entire interest in Rivers Casino to another business, that would have resulted in significant job terminations. The businessman went on to say that their team is important to them and that the transaction would not affect the casino’s staff.
Churchill Downs is adding a full-scale casino with 983 slot machines and 58 table games as well as multiple non-gaming amenities to its portfolio. The company currently operates Arlington International Racecourse in suburban Chicago. Churchill Downs has been trying to get slot machines and other gaming options at the racetrack for years now, but has been unable to do so due to regulatory hurdles.
The company has previously said that it has developed interest in Rivers Casino not only because it is Illinois’ top-performing gambling venue, but also because of the possibility for the state to legalize sports betting and online gambling.
Last week, Illinois Gov. J.B. Pritzker added the legalization of sports gambling to his budget plan for the upcoming financial year. It is to be seen whether the state Legislature would act on betting this session.
Follow us on Facebook and Twitter to stay up to date on the day’s top casino news stories.