Churchill Downs to spend at least $291M on majority stake in Chicago casino

The Louisville-based casino, gaming and racing company said it is acquiring 100 percent of the ownership stake held by Clairvest Group Inc. in Midwest Gaming Holdings LLC for $291 million in cash.

Midwest Gaming Holdings is the parent company of Rivers Casino Des Plaines in Des Plaines, Ill., near Chicago.

CDI also is offering to buy additional ownership stakes in Midwest Gaming held now by High Plaines Gaming LLC, an affiliate of Rush Street Gaming LLC and Casino Investors LLC.

At closing, CDI will hold at least 50.1 percent ownership stake in Rivers Casino, according to a news release. The aggregate cash consideration in the deal is at least $326 million, the release states.

CDI will share control of the casino with Rush Street, while Rush Street will remain in control of management and daily operations.

Rivers Casino Des Plaines, located near O’Hare International Airport, opened in 2011 and has a 44,000-square-foot gaming floor with 983 slot machines and 58 table games. It also has seven dining and entertainment options and an event center.

CDI said in the news release that its purchase price in the sale transaction will be capped at $500 million, and the company expects its ownership and cash investment in Midwest Gaming to grow after the transaction is completed.

Rush Street will equally split priority distributions of 2 percent of Midwest Gaming’s annual gross revenue with CDI, according to the release.

The deal requires approval from the Illinois Gaming Board and is subject to standard closing conditions. CDI hopes to close on the deal in the first half of 2019.

This is the second deal between CDI and Rush Street after the Louisville company purchased Riverwalk Casino and Hotel in Vicksburg, Miss., from the group in 2012.

Churchill CEO Bill Carstanjen said in the release that the company was interested in this acquisition because it looks for gaming properties that have dependable cash flows in highly populated states and diverse markets that may allow the company entry into online casino gaming and sports betting as states weigh the legality of both.

"This property is the crown jewel of Illinois gaming and one of the country’s premier casinos,” Carstanjen said in the release. “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.”