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Churchill Downs Incorporated returns to profit in Q1


Churchill Downs Incorporated (CDI) returned to profit in Q1 of 2021 as revenue grew 28.2% year-on-year to $324.3m, thanks to the acquisition of new race courses and the continued growth of the operator’s online division.

Almost half of CDI’s revenue came from land-based casino gaming away from the Churchill Downs site, up 4.1% to $152.0m from the first quarter of 2020, the final weeks of which were impacted by the novel coronavirus (Covid-19) pandemic. 

Breaking this figure down further, CDI’s racino at the Fair Grounds racetrack in New Orleans brought in more gaming revenue than any other site, at $38.3m, up 21.2%. Presque Isle in Maine followed, even though revenue declined to $23.8m. Ocean Downs, Riverwalk and Harlow’s Casinos also saw revenue increase, while it declined at Calder Casino, Oxford Casino and Lady Luck Nemacolin.

The recently rebranded TwinSpires online division, meanwhile, saw revenue increase 44.7% to $99.7m. The vast majority of this came from horse racing, which brought in $92.7m, up 39.2%, while sports betting and casino gaming contributed the remaining $7.0m, up 180.0%.

Revenue from live racing plus historical racing machines at the Derby City Gaming venue at the Churchill Downs racecourse skyrocketed 124.9% to $63.2m. 

The main reason for this was the acquisition of Oak Grove racetrack, also in Kentucky, which brought in $19.4m. The newly acquired Newport Racecourse in Tennessee brought in a further $4.4m.

Derby City Gaming, meanwhile, brought in $32.9m, up 52.3%, after a new bill was signed into law in February to confirm the legality of historical horse racing machines in Kentucky.

Turfway Park brought in $4.5m, while the Churchill Downs racetrack itself contributed $2.0m.

Other revenue ticked down by 4.3% to $9.4m.

The operator’s expenses were up too, by 5.0% to $277.6m. Costs related to gaming declined to $106.3m, TwinSpires expenses grew to $73.0m and live and historical racing expenses were up to $54.7m. Selling, general and administrative expenses were up 25.0% to $30.2m.

As a result, CDI made an operating profit of $46.7m, compared to an $11.7m operating loss in Q1 of 2020.

Churchill Downs Incorporated paid $19.4m in interest expenses, up 0.5% from the prior year, but made $24.9m from equity in businesses in which it holds a non-controlling stake, after a $3.3m loss in this area in 2020.

This meant the operator made a $52.3m pre-tax profit, compared to a $34.2m loss last year.

After paying $16.2m in taxes, Churchill Downs Incorporated’s final profit was $36.1m, compared to a $23.1m loss the year before.