BUSINESS

Churchill Downs revenue rises on strong Derby week and Riverwalk casino

TAGs: Churchill Downs, churchill downs incorporated, Kentucky Derby

horseracing-revenueHorseracing, casino and online betting operator Churchill Downs Inc. (CDI) reported record revenue and earnings in the three months ending June 30. Revenue rose 5% year-on-year to $283.8m, while earnings rose 4% to $50.3m. CDI’s core racing business saw revenue fall 2% to $157.4m, despite a record Kentucky Oaks and Derby week that produced earnings growth of $5.8m year-on-year, the third consecutive year the week’s earnings growth topped $5m. Looking to maintain the momentum, CDI has embarked on a $14.5m renovation at Churchill Downs Racetrack to add 2,400 new reserved seats and new amenities serving 20,400 existing seats. CDI expects to have all the work finished for the 140th running of the Derby in May of next year.

Revenue from CDI’s online division, which includes advance deposit wagering (ADW) site TwinSpires.com and social gaming site Luckity.com, was flat at $52.5m. TwinSpires’ handle rose 1.3% during the quarter, better than the industry-wide figure of 1%. TwinSpires’ operations in Illinois were silenced at the end of 2012 when the state’s ADW legislation wasn’t renewed, but the Illinois pols finally got around to reinstating the system on June 7. Stripping away the impact of Illinois’ absence, TwinSpires’ handle was up a much more healthy 7.2%. CDI recently announced a deal with Spanish gaming operator Codere to broadcast races from Mexico City’s Hipodromo de Las Américas via TwinSpires.

CDI’s brick-and-mortar casino division saw revenues rise 30% to $66.9m thanks mainly to the October 2012 acquisition of the Riverwalk Casino in Vicksburg, Mississippi, which accounted for $14.1m of Q2’s $15.5m revenue increase. Earnings at Harlows in Greenville, Mississippi were up $1m, while earnings at the Calder casino in Florida were up $500k thanks in part to “the closure of internet cafes in the state.” Casino expenses rose 30%, keeping pace with revenues, but total casino earnings still managed to rise $4.4m.

Meanwhile, those rumors that CDI was looking to buy Atlantic City’s Atlantic Club Casino-Hotel in order to participate in New Jersey’s online gambling market just won’t die. On Wednesday, the Press of Atlantic City suggested the Atlantic Club derby was now a two-way race between CDI and Philadelphia’s SugarHouse Casino, with one of these parties reportedly signing a 30-day sale agreement. Fact? Fiction? Guess we’ll know in 30 days… or less.

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