Churchill Downs posts record revenue, second best earnings in Q4

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churchill-downs-twinspiresUS horse betting operator Churchill Downs Inc. (CDI) earned record revenues in Q4 2012, thanks largely to its online wagering and non-racing gaming operations. Net revenue rose 6% to a record $158.5m, although earnings fell from Q4 2011’s record $19.6m to $17.6m, but that’s still good enough for CDI’s second best Q4 ever.

The record revenue tally reflects the October acquisition of the Riverwalk Casino and Hotel in Vicksburg, Mississippi, which helped push gaming revenue up 21% to $62.9m. Online betting revenue at and lucky-numbers gaming site rose 2% to $40.9m, boosted by a 4.3% increase in pari-mutuel handle, bucking the overall industry trend which saw handle decrease 3.6% in Q4. (It helps when you don’t bother with pesky things like obeying the law in Illinois.) Traditional racing operations revenue was the downer of the bunch, slipping 7% to $48.5m, which the company blames on Churchill Downs Racetrack not hosting the Breeders Cup World Championship in 2012.

For the year as a whole, CDI’s net revenue hit an all-time high of $732.4m (+5%), while earnings fell 9% to $58.2m. Credit for the revenue spike goes (again) to the online business and Riverwalk plus record weeks for Kentucky Oaks and the Derby. Riverwalk contributed all but $300k of the $10.5m in extra gaming revenue CDI enjoyed in 2012. Full-year revenue at Harlow’s in Mississippi rose $3.5m, although these results were skewed because of a 25-day shutdown in 2011 due to flooding. Revenue at the Calder casino in Florida took a $5m tumble due to “increased regional competitive pressure” in Miami and a generally sucky economy in the Sunshine State. Overall gaming earnings rose 19% to $67.8m in 2012.

Racing operations revenue rose $3.2m (+1%) in 2012 thanks to 4% more race days than the previous year, but earnings fell 21% to $50.8m. CDI’s online operations revenue rose 11% in 2012 to $183.3m thanks to a similar sized boost (10.9%) in online handle, again outpacing the national industry average. Earnings rose a more modest 7% to $40.2m due in part to costs associated with the launch of With its online operations ever more important to its bottom line, CDI likely can’t wait to get a date with the Nevada Gaming Control Board to consider its application for an online poker license.


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