Casino and betting operator Churchill Downs Inc has gained approval from the Illinois Gaming Board (IGB) to broker a deal which will give it control of Rivers Casino in Des Plaines.
The proposal received overwhelming support from IGB members, who voted 4-0 in favour of the plans to purchase almost 62 per cent of the venue’s parent company, Midwest Gaming Holdings.
Overall, the deal is set to be valued at $407 million, which is due to be paid in cash. The original intention was to invest $326 million before further investors decided to sell their stake.
Following concerns that all but 24 female and minority investors will sell their shares to the operator, which would leave 2.7 per cent of ownership to such groups, Churchill Downs has been directed to seek female and minority investors as a condition of the sale.
The casino operator must then sell ten per cent of the company to these investors in no more than 90 days.
Gaming board members had previously raised concerns over the female and minority ownership interest in Rivers dropping from 17 per cent. If Churchill Downs is successful in boosting the numbers in the subsequent 90 day target, it would still remain below the 20 per cent benchmark target set by the board.
CEO of Churchill Downs Bill Carstanjen said: “This is one of the most dynamic, successful properties in the United States, a real gem.”
At the gaming board meeting River Casino’s chairman Neil Bluhm, who will keep his seat, declared there will be no changes in personnel at the casino.
He stated: “Our team members are important to us. The transaction will not result in any change for our team members. If we had to sell it at 100 percent, the transaction would have resulted in significant job terminations.”
The deal comes shortly after new governor J.B. Pritzker backed a bill proposing legal sports betting in Illinois.
The Louisville-based operator and racetrack owner first announced plans to buy a 50.1% stake in Rivers Casino’s parent company Midwest Gaming Holdings last fall.
Greg Carlin, CEO of Midwest Gaming and its corporate parent Rush Street Gaming, said in a statement to the Daily Herald: “We are thrilled to have Churchill Downs become our partner in Des Plaines, because they share our vision for the future of Rivers Casino and our commitment to our team members, community and guests.
“They have a tremendous record of success and innovation. With their representation on our board of managers, we’re confident Rivers will remain one of the most successful casino destinations in North American and one of the best places to work in Illinois.”