Churchill Downs Incorporated Announces Definitive Agreement to Acquire At Least a 50.1% Stake in Rivers Casino Des Plaines in Illinois

Transaction will result in acquisition of all of Clairvest Group’s ownership in one of America’s premier casino properties

LOUISVILLE, Ky. (October 31, 2018) – Churchill Downs Incorporated (“CDI” or the “Company”) (Nasdaq: CHDN) today announced that it has signed a definitive purchase agreement (the “Purchase Agreement”) pursuant to which CDI will acquire certain of the ownership interests of Midwest Gaming Holdings, LLC (“Midwest Gaming”), the parent company of Rivers Casino Des Plaines in Des Plaines, Illinois (“Rivers Des Plaines”), for cash (the “Sale Transaction”).

The Sale Transaction will be comprised of (i) CDI’s purchase of 100% of the ownership stake in Midwest Gaming held by affiliates and co-investors of Clairvest Group Inc. (“Clairvest”) for approximately $291 million and (ii) CDI’s offer to purchase, on the same terms, additional units of Midwest Gaming held by High Plaines Gaming, LLC, an affiliate of Rush Street Gaming, LLC (“Rush Street”), and Casino Investors, LLC (“Casino Investors”), resulting in aggregate cash consideration of at least $326 million.

Post-closing, CDI and Rush Street will jointly control Rivers Des Plaines as Rush Street has with Clairvest since the casino’s opening. Additionally, Rush Street and the Rush Street-led management team will continue to manage the day-to-day operations of Rivers Des Plaines.

Following the closing of the Sale Transaction, the parties expect to enter into a recapitalization transaction pursuant to which Midwest Gaming will use approximately $300 million in proceeds from new credit facilities to redeem, on a pro rata basis, additional Midwest Gaming units held by Rush Street and Casino Investors (the “Recapitalization”). The parties expect the new credit facilities will be comprised of an amended and extended Revolving Credit and Term Loan Agreement (the “Senior Credit Facility”) with one of Midwest Gaming’s wholly-owned subsidiaries for up to $650 million, as well as approximately $200 million in mezzanine debt incurred directly by Midwest Gaming. After the Recapitalization, approximately $50 million of the Senior Credit Facility would remain unfunded and available for general corporate purposes.

The Sale Transaction and Recapitalization (together, the “Transactions”) will result in CDI owning at least 50.1% of Midwest Gaming. Should members of Rush Street and Casino Investors elect to participate in CDI’s offer to purchase additional units in the Sale Transaction, CDI’s ownership of Midwest Gaming following the Transactions would increase, as would its cash investment. CDI’s cash purchase price in the Sale Transaction is subject to a cap of $500 million, which is expected to pay for all of Clairvest’s units and those of the other investors being sold in the Sale Transaction. After giving effect to the Transactions, Rush Street expects to own largely the same ownership interest percentage in Midwest as it currently holds.

CDI and Rush Street equally will split priority distributions of two percent of Midwest Gaming’s annual gross revenue. In addition, CDI, Rush Street and Casino Investors will be entitled to receive pro rata quarterly tax distributions calculated based on the highest applicable U.S. individual federal tax rate plus the higher of California or New York individual state tax rates, as well as other distributions permitted under new credit facility covenants.

CDI CEO Bill Carstanjen said the Transactions reflect CDI’s strategy of investing in gaming properties with stable, predictable cash flows in diverse markets, particularly in populous states that may ultimately grant access to online casino gaming and sports betting to their brick-and-mortar casino license holders.

“We are thrilled to partner with Neil Bluhm and Rush Street Gaming in Rivers Des Plaines. This property is the crown jewel of Illinois gaming and one of the country’s premier casinos,” Carstanjen said. “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.”

“Churchill Downs Incorporated has created significant shareholder value over the years and we are excited to be partnering with them” said Greg Carlin, CEO of Midwest Gaming and Rush Street Gaming. “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.”

The Transactions, which are contingent upon approval by the Illinois Gaming Board and other usual and customary closing conditions, are anticipated to close in the first half of 2019. The Transactions mark the second casino transaction involving CDI and Rush Street, with CDI having acquired Riverwalk Casino and Hotel in Vicksburg, Mississippi from Rush Street in 2012.

Opened in 2011, Rivers Des Plaines, located on the Des Plaines River in Des Plaines, Illinois, two miles from O’Hare International Airport and fifteen miles from downtown Chicago, features a 44,000-square-foot single-level gaming floor with 983 slot machines and 58 table games; seven dining and entertainment options; and a multi-functional event center.

Sidley Austin LLP is representing CDI in the Transactions, Weil, Gotshal & Manges LLP is representing CDI in the Transactions with respect to tax matters and Fox Rothschild LLP is representing CDI on gaming matters with respect to the Transactions. Kirkland & Ellis LLP is representing Rush Street and Vedder Price P.C. is representing Clairvest in the Transactions. Greenberg Traurig, LLP is representing Midwest Gaming on gaming matters with respect to the Transactions.

The Senior Credit Facility was arranged with Wells Fargo Securities, LLC as Left Lead Arranger and Left Bookrunner, Wells Fargo Bank, National Association as Administrative Agent, Fifth Third Bank, CIBC Bank USA and U.S. Bank National Association as Joint Lead Arrangers, Joint Bookrunners and Co-Syndication Agents and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arranger, Joint Bookrunner and Documentation Agent.

About Rush Street Gaming

Founded by Neil Bluhm and Greg Carlin, Rush Street Gaming and its affiliates, headquartered in Chicago, Illinois, have developed and operate successful casinos in Niagara Falls, Ontario, Pittsburgh and Philadelphia, Pennsylvania, Des Plaines, Illinois (Chicago area) and Schenectady, New York.  Rush Street Gaming and its affiliates has become one of the leading casino developers in the United States and operators of online casinos and sports books. Additional information at:

About Churchill Downs Incorporated

Churchill Downs Incorporated is an industry-leading racing, online wagering and gaming entertainment company anchored by our iconic flagship event – The Kentucky Derby. We own and operate Derby City Gaming, a historical racing machine facility in Louisville, Kentucky. We also own and operate the largest online horse racing wagering platform in the U.S.,, and we operate sports betting and iGaming through our BetAmerica platform in multiple states. We are also a leader in brick-and-mortar casino gaming with approximately 11,000 slot machines and video lottery terminals and 200 table games in eight states. Additional information about CDI can be found online at

Information set forth in this news release contains various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”), which provides certain “safe harbor” provisions. All forward-looking statements made in this news release are made pursuant to the Act. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include the following: the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit; additional or increased taxes and fees; public perceptions or lack of confidence in the integrity of our business or any deterioration in our reputation; loss of key or highly skilled personnel; restrictions in our debt facilities limiting our flexibility to operate our business; general risks related to real estate ownership, including fluctuations in market values and environmental regulations; catastrophic events and system failures disrupting our operations; online security risk, including cyber-security breaches; inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; increases in insurance costs and inability to obtain similar insurance coverage in the future; inability to identify and complete acquisition, expansion or divestiture projects, on time, on budget or as planned; difficulty in integrating recent or future acquisitions into our operations; costs and uncertainties relating to the development of new venues and expansion of existing facilities; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; inadvertent infringement of the intellectual property of others; inability to protect our own intellectual property rights; payment-related risks, such as risk associated with fraudulent credit card and debit card use; compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations; risks related to pending or future legal proceedings and other actions; inability to negotiate agreements with industry constituents, including horsemen and other racetracks; work stoppages and labor issues; changes in consumer preferences with respect to Churchill Downs Racetrack and the Kentucky Derby; personal injury litigation related to injuries occurring at our racetracks; weather and other conditions affecting our ability to conduct live racing; the occurrence of extraordinary events, such as terrorist attacks and public health threats, including the ongoing impact of the novel coronavirus (COVID-19 virus); changes in the regulatory environment of our racing operations; increased competition in the horseracing business; difficulty in attracting a sufficient number of horses and trainers for full field horseraces; our inability to utilize and provide totalizator services; changes in regulatory environment of our online horseracing business; number of people wagering on live horse races; increase in competition in our online horseracing; uncertainty and changes in the legal landscape relating to our online wagering business; continued legalization of online sports betting and iGaming in the United States and our ability to predict and capitalize on any such legalization; inability to expand our sports betting operations and effectively compete; failure to manage risks associated with sports betting; failure to comply with laws requiring us to block access to certain individuals could result in penalties or impairment with respect to our mobile and online wagering products; increased competition in our casino business; changes in regulatory environment of our casino business; and concentration and evolution of slot machine manufacturing and other technology conditions that could impose additional costs; and inability to collect gaming receivables from the customers to whom we extend credit.