Rush Street-Churchill Downs Withdraw Joint Bid For Waukegan Casino License In Illinois

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In an intriguing and late decision, Rush Street Interactive and Churchill Downs Inc. made a request to the Illinois Gaming Board Wednesday to withdraw their joint bid for the city of Waukegan’s casino license.

The two are stakeholders in Rivers Casino in Des Plaines, the state’s top-earning casino that has generated more than one-third ($288.3 million) of Illinois’ casino revenue in 2021 and nearly half ($65.5 million) of the state’s $137.4 million in gaming tax receipts through the first eight months of the year. Churchill Downs purchased a 62% stake in Rivers for $407 million in March 2019, shortly before Illinois Gov. JB Pritzker signed a massive gaming expansion bill that included Waukegan as one of six sites to be granted a casino license.

CDI entered a $197.2 million sale and purchase agreement with the Chicago Bears Wednesday for the 326-acre parcel of land occupied by Arlington Park Racecourse. The iconic horse racing venue with the cantilevered roof looks to be done representing the sport of kings after 94 years, with Churchill Downs evolving more into a gaming corporation than horse racing business in recent decades.

That deal also indirectly involves Rivers Casino and its mobile sports betting tether BetRivers — the Bears made Rivers their official casino partner and BetRivers their official sportsbook partner in a deal with Rush Street Interactive in June.

The withdrawal by Rush Street and CDI leaves Lakeside Casino LLC and Full House Resorts as the two finalists for the Waukegan license. Both will make their presentations to the Illinois Gaming Board on Oct. 13.

The order of play for presentation to the IGB

The Illinois Gaming Board held three drawings Thursday to determine the order of presentation for its specially convened meeting for both the Waukegan license and the one to be awarded for the south suburbs of Cook County near the Indiana state line. Both jurisdictions have local laws requiring a bidding process, which has put them on a different timeline than the licenses awarded to Rockford, Danville, Williamson County, and downtown Chicago.

That timeline has also been delayed due to the COVID-19 pandemic, which has caused some frustration among the applicants, most notably those connected to the Southland license. State Rep. Anthony DeLuca, whose district encompasses all four applicant locations, sent a letter to Pritzker in August asking him to “spur [the]  IGB into action.”

The presentations for the Waukegan license will be first, with Lakeside Casino the first to present followed by Full House Resorts. For the Southland license, the list of four finalists will be narrowed to three following the presentations. Wind Creek, connected to the Poarch Band of Creek Indians, will be the first to present, outlining its casino proposal on the border of the Homewood and East Hazel Crest communities.

Southland LIVE, with Delaware North presenting for a casino in Calumet City, will make the second presentation. South Suburban Development LLC, led by the Choctaw Nation, will offer its designs for a casino in Matteson. Southland Ho-Chunk Entertainment, anchored by Ho-Chunk Nation from neighboring Wisconsin, will then detail its plans for a proposed casino in Lynwood.

The IGB hopes to identify “preliminary suitable” applicants for both licenses by January.

Is Waukegan’s loss potentially downtown Chicago’s gain?

The Rush Street-CDI withdrawal from Waukegan offers a new subplot for the license available in downtown Chicago. The city is currently accepting Requests for Proposal, though the deadline was extended to Oct. 29 last month as potential applicants try to incorporate Chicago Mayor Lori Lightfoot’s requests as part of the casino to be developed in the third-largest city in the United States.

Rush Street Gaming CEO and co-founder Neil Bluhm, a Chicago native, has yet to disclose if he will apply for the license, whether as a solo enterprise or as part of a joint bid. To drum up interest among applicants, Lightfoot declared “there is no hometown favorite” when promoting the city at a meeting of the National Council of Legislators from Gaming States in July.

Even if touted as an international tourist destination, any downtown casino would face substantial competition from Indiana’s three casinos just over the state line — Ameristar in East Chicago, Horseshoe in Hammond, and the just opened Hard Rock Northern Indiana in Gary. That is in addition to the Chicagoland casinos besides Rivers in Des Plaines that include Grand Victoria in Elgin, Harrah’s and Hollywood in Joliet, and Hollywood in Aurora. Also seeking a piece of the gaming action are sportsbooks angling to make a retail entrance in Chicago.

CDI’s sale of the Arlington Park parcel to the Bears could make Soldier Field a potential site for a downtown casino, provided the team actually follows through and moves to the northern suburb. Though the Bears’ lease with the city to play at Soldier Field runs through 2033, the Chicago Tribune reported this summer the franchise could break the lease for $84 million by 2026 — slightly beyond Lightfoot’s preferred timeline of opening a downtown casino in 2025.

CDI also is one of four applicants for a casino in Vigo County, with hopes of building it in Terre Haute.

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Chris Altruda has been a sportswriter with ESPN, The Associated Press, and STATS over more than two decades. He recently expanded into covering sports betting and gambling around the Midwest.

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