TALKING POINTS: Going with the flow
Rivers Casino in the northwest Chicago suburb of Des Plaines, near O’Hare Airport, opened last July as the first casino in Cook County, and the first new casino in Illinois since 1994. It fills the state’s tenth and currently final gaming license, which had been in limbo since the Silver Eagle Casino in East Dubuque closed in 1997. After lengthy delays, the license was awarded in 2010 to Rivers casino owner, developer and operator Midwest Gaming and Entertainment, LLC, a partnership between affiliates of Neil Bluhm and Clairvest Group Inc. The company ended up creating a 147,000-square foot facility with 44,000 square feet of gaming space to house 1,050 slot machines and 48 table games. Greg Carlin, Rivers Casino CEO, is in charge of the day-to-day operations at the property. He recently took some time to speak with Casino Journal correspondent John Grochowski. Here are some excerpts from that conversation:
What about Des Plaines made you think this was a great location?
Carlin: It has great access. You have major highways nearby, you’ve got the airport. What’s interesting is the original legislation in Illinois didn’t allow any casino in Cook County. So we’re really the first casino to be in Cook County, and if you look at the demographics, there are 3.7 million adults within 20 miles of our site, and there’s no casino within 20 miles of our site. So that’s just a huge untapped market. There’s gaming on the periphery, but not in the middle of the population base.
With table limits up to $100,000 on baccarat, it looks like you’re aiming at the high end of the market.
Carlin: We are. Because of the new regulations, being on water rather than navigable water (changed in 1999, when Illinois dropped cruise requirements), we were able to design a traditional casino with all the food and beverage around the perimeter, and we thought there was a void in this market for an upper-end casino. We wanted to appeal to everybody, but we wanted it to feel like you’re in Las Vegas. It’s our opinion that there are a lot of people who live in this market who like to gamble who don’t go to casinos for one reason or another, either distance or lack of amenities.
You’re surrounded by hotels, though you don’t have one on property. You’re near the Rosemont Convention Center. Do you see yourself drawing business travelers, out of state people, local people?
Carlin: Like I said, we have 3.7 million adults within 20 miles. That’s certainly our target market, but I do think we’re going to attract folks staying in the hotels, out at the airport area. There’s like 15,000 hotel rooms within five miles of our property. We spent some time talking with general managers and concierges at the hotels in the area, and what we learned is there’s not a whole lot to do in the evening for folks there. They send people down to the city a lot of the time. We also found that if we didn’t have a hotel, all these hotels would be more willing to work with us to drive people to our property if we weren’t competing with them.
We’ve seen big drops in casino revenues since the economic downturn. Do you think the market can sustain the addition of another casino?
Carlin: I do. We’re certainly concerned with the drop-off in business. I think it primarily resulted from Illinois’ smoking ban, one, and two, from new competition with a nicer facility in Milwaukee (at Potowatomi Bingo Casino) and at Four Winds in (New Buffalo) Michigan. But I still think the market is big enough, and we’re going to be the first casino in Cook County. I think the market is under-saturated to the extent that the current casinos aren’t necessarily where the populations are.
Greg Carlin serves as the CEO of Rivers Casino. He also is the CEO of HSP Gaming and has more than 11 years of experience in the gaming industry, including numerous casino development projects. He currently serves as a member of the Board of Directors of Falls Management Company, which operates Fallsview Casino and Casino Niagara. Carlin also is a managing director of LAMB Partners, a multi-asset investment partnership, where he oversees all non-real estate investments, including gaming-related investments. He also serves as a Trustee of the JMB Realty Employee Savings Plan.