Racing, casino and social gaming operator Churchill Downs Inc. saw profit fall 16% in 2014 as acquisition-related interest costs spiked.
CDI enjoyed record revenue of $812.9m in 2014, up 4% over the previous year, while earnings were up 15% to $202.5m. But profit fell to $46.2m as interest payments more than tripled, in part due to CDI’s $885m acquisition of social gaming operator Big Fish Games late in the year.
For the three months ending Dec. 31, revenue from CDI’s casino operations was flat at $78.7m while earnings rose 21% to $22.7m. The gains were partly attributable to a full quarter’s contributions from the Miami Valley Gaming joint venture in Ohio, which launched last December. Business was up 7% at the Oxford Casino in Maine but single-digit declines at CDI’s other casino properties erased these gains.
CDI’s online advance deposit wagering site Twinspires.com reported essentially flat revenue of $40.9m while earnings fell 5% to $10.1m, which CDI blamed on new online pari-mutuel taxes in New York. Twinspires’ betting stakes rose 4%, outperforming the nationwide thoroughbred racing handle, which fell 4%. VSI aka Velocity Wagering Services, the company’s Isle of Man-based high-roller online business, saw revenue nudge up 1% to $8.6m.
CDI’s core racing operations fell 21% to $30.4m thanks to the cessation in July of pari-mutuel operations at Florida’s Calder Race Course. However, that event also cut costs, which helped narrow racing’s earnings loss by 33% to $5.4m.
Big Fish Games contributed $13.9m in revenue and $3.8m in earnings during the brief period following the acquisition. For the fourth quarter as a whole, including the pre-acquisition period, Big Fish bookings were up 33% year-on-year to $95.4m. Of this sum, $46.9m came via Casino, $32.3m via Premium Paid games and $16.2m from Free-to-Play Casual games.
Big Fish’s Casino category was up 94% year-on-year, driven by a 77% increase in average paying users and a 9% gain in average bookings per paying user. The Premium category was down 23% year-on-year as customers shifted from paid PC games to mobile free-play. Free-to-Play was up 200% thanks to the launches of Gummy Drop! on iOS in Q3 and on Android in Q4.
