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New casinos boost Churchill Downs revenue in Q3


An increase in gaming revenue from new casinos helped Churchill Downs Incorporated (CDI) increase revenue 38.4% year-on-year in the third quarter of its financial year, to $306.3m.

Of CDI’s $306.3m in revenue, $178.3m came from casino gaming, a 61.5% rise from 2018. New casinos were a major boost to CDI’s gaming revenue, with Presque Isle Downs & Casino in Pennsylvania, acquired in January, the largest source of revenue with $38.1m.

Lady Luck Nemacolin, also in Pennsylvania and acquired in March, brought in $10m, while Ocean Downs, acquired in September 2018 from Saratoga Casino holdings, brought in $26.7m, compared to $8.1m in the previous year.

Revenue from casinos which were already owned by Churchill Downs at the start of 2018 increased 1.1% to $117.4m.

The Churchill Downs racetrack saw revenue soar to $31.4m, thanks mostly to the introduction of the Derby City Gaming facility, which is included in the Churchill Downs figure, and brought in $22.5m.

Derby City Gaming’s revenue saw an almost tenfold increase from 2018, when less than three weeks of its revenue was recorded due after it opened on September 14. The Churchill Downs racetrack’s contribution increased 4.7% to $8.9m.

Online wagering revenue from the company’s TwinSpires-branded mobile sports betting and casino slightly declined, however, falling 2.3% to $70.2m. Other revenue fell 6.7% to $26.4m.

However, the acquisition and opening of new venues also led to an increase in expenses as total operating costs rose 38.7% to $278.5m, leading to operating income of $27.8m, a 35.6% increase.

Costs from the company’s casinos aside form Derby City increased 69.2% to $137.3m, while those form the Churchill Downs site increased 57.9% to $30.8m.

Online wagering expenses increased 6.3% to $52.2m while selling, general and administrative costs rose 57% to $34.4m. Other expenses declined 3.4% to $22.9m.

CDI made $14.1 from the income of subsidiaries over which it did not hold a voting stake, a 54.9% increase from 2018. The company’s interest costs rose significantly, up 90.9% to $18.9m.

The company reported a profit of $23.2m from continuing operations before income tax, down 68.5% year-on-year.

However, CDI noted that the comparison with Q3 2018 was distorted by its purchase of Ocean Downs in exchange for its stake in Saratoga Casino Holdings. The deal was recorded as a $54.9m gain in CDI’s 2018 finances. Without this figure, pre-tax income from continuing operations increased 17.2%.

After paying $8.0m in tax, CDI’s total income came to $15.2m, a 73.8% decline from 2018. The company said that when items that affect comparability, such as the Ocean Downs deal, are excluded, it made $400,000 more than it did in 2018.

The company made a $400,000 loss from discontinued operations, leading to a final profit figure of $14.8m, also down 73.8% year-on-year.