Positioning itself to open a sportsbook should Illinois legalize sports betting, Churchill Downs Inc. acquired majority ownership in Midwest Gaming Holdings, the parent company of Rivers Casino in Des Plaines.
Churchill Downs paid about $407 million in cash to acquire Rivers Casino, the top-performing casino in Illinois. The Illinois Gaming Board voted 4-0 for the deal during the board’s regular meeting March 1, and it was finalized on March 5.
Churchill Downs CEO Bill Carstanjen said his company wishes to expand into markets where sports betting is legalized. The Louisville-based company owns casinos in five states and horse racing tracks in three states.
Before unanimously approving the sale, the board raised objections that the minority investment in the casino would go from 17 percent to 3 percent if this transaction went through. Churchill Downs alleviated those concerns by agreeing to a good faith effort to sell up to 10 percent of the equity value in Rivers Casino -- at the same price it had paid -- to minority investors within 90 days.
Since May's Supreme Court decision to strike down the Professional and Amateur Sports Protection Act of 1992, Illinois is one of several states where lawmakers are considering legislation to legalize sports betting. After the Supreme Court’s ruling, sportsbooks are now operational in Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia.
Illinois Gov. J.B. Pritzker has said publicly he supports the state legalizing sports betting, even going so far as to include $200 million in future tax revenues generated from sports betting in his 2020 budget proposal. A bill that would make sports betting legal in Illinois is expected to pass the legislature and go before the governor this year.
“Expansion of gambling is a perennial effort in this state, and often these proposals get bogged down in regional disputes and a Christmas tree approach,” Pritzker said in a speech to a joint session of the Illinois House and Senate, according to the Chicago Tribune. “But in those instances, we were talking about adding more riverboats or adding into other regions.
“Sports betting is different. This is a new market created by a recent U.S. Supreme Court decision. Every day we argue about who’s in and who’s out is money that goes to other states and to the black market.”
Rivers Casino is not the first gambling facility Churchill Downs owns in the Chicago area. The company also operates Arlington Park Racecourse, 8 miles from Rivers Casino and 35 miles outside of downtown Chicago. However, Churchill Downs does not have a license to have slots and other gaming options beyond horse racing at Arlington Park.
Rivers Casino, 15 miles from downtown Chicago, has 983 slot machines and 58 table games on its 44,000-square-foot, single-level gambling floor.
Last year, Churchill Downs opened sportsbooks at the two casinos it owns in Mississippi.
"This property is the crown jewel of Illinois gaming and one of the country’s premier casinos," Carstanjen said, according to an igamingbusiness.com report. "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."