Racing and casino operator Churchill Downs Incorporated (CDI) reported record revenue and earnings in Q2 thanks to its casino operations and a record Kentucky Oaks and Derby week. For the three months ending June 30, revenue rose 7% to $303.7m while adjusted earnings rose 12% to $116.5m. The 2014 Oaks and Derby fiesta is credited with contributing $8.8m of that earnings total, another record tally for the company.
CDI’s mainstay racing operations were essentially flat in Q2, with revenue up 1% to $159.4m despite a 17% decline in wagering handle. Thanks to the Oaks and Derby windfall, earnings managed to rise 11% to $78.1m. On July 2, CDI ceased pari-mutuel operations at Florida’s Calder Race Course although it will continue to operate the property’s Calder Casino.
CDI’s casino division enjoyed a healthy 23% revenue gain to $82m and a 35% earnings bump to $26.2m. CDI’s Mississippi and Louisiana casinos continued to suffer from regional economic weakness while business was strong at Maine’s Oxford Casino and the Miami Valley Gaming joint venture in Ohio.
CDI’s online advance deposit wagering (ADW) option TwinSpires reported revenue up 9% to $57.1m as online handle rose 4.7%. This quarter’s numbers were skewed by a full three months of ADW business in Illinois, whereas Q2 2013 enjoyed just 24 days of business due to state politicians being laggard in renewing their ADW legislation. On the other hand, the previous Q2’s figures included ADW operations in Texas, which have since been discontinued. Stripping aside the Illinois and Texas figures, online handle rose 5.5%, bettering the industry average by 6.9 points.
Wednesday also saw CDI announce that it plans to take a 25% stake in Saratoga Harness Racing Inc. (SHRI), with whom CDI has partnered on a $300m casino bid in East Greenbush, New York, just outside Albany. The pair is one of 17 hopefuls vying for the four casino licenses up for grabs in the state. CDI has also signed a five-year deal to manage two existing SHRI properties, Saratoga Casino and Raceway in Saratoga Springs, New York and Saratoga Casino Black Hawk in Black Hawk, Colorado. The deal won’t officially commence until CDI has acquired the necessary licenses in those states.