Louisville, Kentucky-based horseracing, casino and online gambling operator Churchill Downs Inc. (CDI) posted record revenue and earnings in Q3 thanks largely to recent casino acquisitions and a strong showing by its online wagering site TwinSpires.com. In the three months ending Sept. 30, CDI reported revenue of $186.5m (+13%), earnings of $31.8m (+31%) and net income of $9.25m (+53%). The financial haul encouraged CDI to announce a 21% increase in its annual dividend, the third consecutive year that CDI has been able to make it rain for shareholders in this fashion.
The October 2012 addition of the Riverwalk Casino Hotel in Vicksburg, Mississippi and the July 2013 addition of the Oxford Casino in Maine helped push CDI’s brick-and-mortar gaming revenue up 61% to $79.8m. That outpaced CDI’s mainstay horse wagering operations, which saw revenue fall 19% to $50.7m thanks in part to fewer racing days at Arlington Park (Illinois) and Calder Race Course (Florida).
CDI’s online operation reported a 6% revenue rise to $48.5m thanks to a 7.3% rise in handle at the TwinSpires advance deposit wagering (ADW) site. The improved handle helped raise the online division’s earnings by 31%. CDI didn’t offer specific figures for its online pseudo-bingo site Luckity.com, but did note that the online division’s expenses were down now that Luckity’s development costs were in the rearview mirror. CDI also made a passing reference to Velocity Wagering Services, the company’s hush-hush Isle of Man-based high-wagering-volume ADW site for international customers. Velocity’s earnings apparently rose in Q3 thanks to “higher wagering from existing customers and the addition of a new high-volume customer.”
ILLINOIS AGAIN STRUGGLING TO RENEW ADW LEGISLATION
TwinSpires’ 7.3% rise in wagering handle easily eclipsed the national thoroughbred handle increase of 1.3% (according to Equibase) but that figure could dip if Illinois lawmakers once again fail to renew their state’s ADW legislation on time. Last year, the pols’ indecisiveness led to the state temporarily suspending the four ADW licenses it had issued, including one to TwinSpires. The current law is set to expire Jan. 31, 2014, and the fall ‘veto session’ of the legislature has so far failed to produce a resolution to the problem. The final sittings of the fall session run from Nov. 5-7.
The uncertainty has prompted the state’s racing board to approve four different racing schedules for the coming year, including one plan that envisions just 87 racing days, less than one-fifth 2013’s total. Arlington Park VP Jim Stumpf told the Associated Press that ADW is “the only type of activity that has shown growth in the last three years” and that the current law “must be extended without a sunset to enable racing to survive in this state.”
