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.
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.
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.
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.
"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.
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.