Churchill Downs could get regulatory nod to expand further in Illinois as the state gears up for sports betting legalization push
Churchill Downs could get regulatory approval for its offer to buy a majority stake in Rivers Casino Des Plaines this Friday, news outlet Daily Herald reports.
Churchill Downs announced plans to buy a 50.1% stake in Illinois’ top-performing casino last fall. The Kentucky-based gaming and horse racing company cited the potential legalization of sports betting as one of the main reasons for its decision to seek expansion in Illinois. Churchill Downs currently owns the Arlington International Racecourse in suburban Chicago.
The Illinois Gaming Board is currently conducting a probe into Churchill Downs’ finances as well as criminal background checks of company officials. The investigation is a necessary step, on which the board will base its decision whether to greenlight the deal.
The Daily Herald reports that board members may vote on the transaction during their next meeting, scheduled for Friday, March 1. Gaming Board spokesperson Gene O’Shea told the newspaper that it was not immediately known whether the investigation will be completed in time for the proposed acquisition to be added on Friday’s agenda.
The purchase of a 50.1% stake in Rivers Casino will expand Churchill Downs’ presence in the Chicago area, an important gambling market. The deal will also place the company in an excellent position, should sports betting become legal in Illinois.
Officials for Churchill Downs and Rivers Casino’s parent company, Midwest Gaming Holdings, expect to finalize the deal in the first half of the year, subject to regulatory approval. Churchill Downs is to pay at least $326 million for the desired majority stake in the Des Plaines-based casino.
Gov. Pritzker Tacks Sports Betting Onto State Budget Plan
Churchill Down is extending its Illinois footprint at a time when the state is gearing up for another gambling expansion push, this time one related to the legalization of sports betting. Illinois’ newly sworn-in Governor, J.B. Pritzker, has included the authorization of the practice in the budget plan for the fiscal year starting July 1, 2019.
Gov. Pritzker’s sports betting push is yet to take form as a bill, but the state’s top legislator calls for up to 20 licenses for retail and online sports betting to be issued. Each license would come at a $10 million price. In other words, the state could collect $200 million in upfront payments from companies interested to operate sports betting.
Licensed operators will be taxed at 20% on gross wagering revenue. Legislators project that the state could annually collect between $77 million and $136 million in tax revenue from legal sports betting. Sportsbook owners will also be required to pay an annual license renewal fee of $5,000.
Gambling expansion proposals have failed in the state in recent years. But Illinois now has the chance to become the first state in the Midwest to legalize sports gambling and secure an important competitive advantage over its neighbors. That, paired with Gov. Pritzker’s support and a growing budget deficit, could bode well for a sports betting legislation and its movement through the Illinois Legislature.
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