Racing, casino and social gaming operator Churchill Downs Inc. (CDI) generated record revenue in Q2 thanks to a strong Kentucky Oaks and Derby week and continued strength at its online operations.
CDI’s total revenue in the three months ending June 30 came to $409.2m, a 35% improvement over the same period last year. Adjusted earnings rose 34% to a record $157.2m while net earnings fell 4% to $55m thanks to costs associated with last year’s $885m acquisition of the Big Fish Games social and mobile games operation.
Company CEO Bill Carstanjen said all of CDI’s verticals showed improvement in Q2, but Big Fish was the “largest growth catalyst.” The division reported revenue of $112.7m, with $48.2m coming from social casino, $36.5m from free-to-play casual and $28m from premium games. Total bookings were up 40% from the comparable quarter prior to CDI’s acquisition.
Social casino bookings were up 31% year-on-year, as average paying users rose 24% and average bookings per paying user rose 6%. Free-to-play casual reported average paying users up 173% and average bookings per paying user up 78%. Premium bookings fell 22% as customers continued their shift away from paid PC games to free-play mobile products.
CDI’s online race wagering business TwinSpires saw revenue rise 6% to $60.7m, while earnings gained 19% to $16.7m thanks in part to a favorable tax ruling on pari-mutuel wagering in Pennsylvania. TwinSpires’ betting handle was up 8.6% to $289.4m for the quarter.
In contrast, land-based racing handle fell 16% to $557.8m thanks to the July 2014 closure of the Calder track in Florida. Racing revenue fell 3% to $155.4m despite a record-breaking Kentucky Oaks and Derby week at CDI’s flagship Churchill Downs track, which added $8.4m to Q2’s revenue total. On the plus side, decreased costs via the Calder closure helped push racing earnings up 9% to $85.2m.
CDI’s brick-and-mortar casino operations reported revenue of $83.8m, up 2% year on year, while earnings gained 7% to $28m. Gains at CDI’s Oxford Maine facility partially offset declines at Fair Grounds in Louisiana, which was recently hit by the new indoor smoking ban in Orleans Parish.
CDI CONFIRMS CALIFORNIA ONLINE POKER PARTNERSHIP
CDI used its Q2 results to confirm industry rumors that it had partnered with the Oceans 11 cardroom in Oceanside, California and the Crystal Casino & Hotel in Los Angeles regarding a prospective intrastate online poker deal. Both properties are owned by Haig Kelegian Snr. Kelegian is also managing partner of the Bicycle Casino, which has its own online poker partnership with Amaya Gaming’s PokerStars brand.
California’s online poker legislative efforts appear to have stalled for 2015 but CDI has its bases covered for whenever the state’s politicians get their act together. CDI says its deal with Kelegian is for a 10-year term commencing when the first online hand is dealt. Under the partnership, CDI would provide the technology platform while both parties would handle the site’s marketing.