EAST CHICAGO, IN-Las Vegas-based Ameristar Casinos Inc. has signed a definitive agreement to purchase the Resorts East Chicago riverboat gaming complex here for $675 million in cash from Resorts International Holdings LLC, an affiliate of Colony Capital and partner Nicholas L. Ribis. Ameristar expects to complete its due diligence by April 22, and to close on the 28-acre property sometime in the fourth quarter.

The 53,000-sf casino generated $325.6 million in gross gaming revenue in 2006. Ameristar says it plans to double the space, with a new, single-level gaming facility, and to expand on the 3,000-space parking garage. The firm says it will also consider changes to the current food and beverage options, but plans to leave the 291-room hotel, built in 2002, as-is.

“We will start the expansion promptly following the close of the property,” said John Boushy, CEO and president of Ameristar in a conference call Wednesday, April 4, about the deal. “We expect completion in the third year of our ownership, sometime in 2010.”

He said casino demand is high in northwest Indiana and the southern Chicagoland area. “There’s a significant potential due to a large population and a limited gaming supply,” Boushy said, referring to the eight casinos currently operating in Illinois and Indiana. “The area has the best demographics in the US, there’s 6.4 million adults in a 50 mile radius. It’s a most dynamic market.”

He said the area is also vastly underserved due to license restrictions and a limit on the number of gaming positions, though firm officials said they’re not worried about more competition coming in. Ameristar is also starting the process to gain the Resorts gaming license, Boushy says. The firm has seven other casinos in the areas of St. Louis; Kansas City; Omaha, NE; Jackson, MS; Denver; and Jackpot, NV.

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