With racing operations continuing to show losses at Churchill Downs Inc., company CEO Bob Evans said May 9 that it would be hard for CDI to justify capital expenditures on racetracks, except in special cases.
Citing the example of the success of the recently concluded Kentucky Derby Presented by Yum! Brands and Kentucky Oaks (gr. I), Evans said, “We do believe there is a demand for high-quality racing entertainment," and that CDI would be looking for such opportunities.
He estimated that Derby Week would contribute an additional $5-$6 million in revenue over the same events last year, saying the track experienced increases in revenues from ticket sales, sponsorships, and television rights.
Evans’ comments came during a conference call outlining CDI’s financial results for the first quarter of 2011, which would not include the Derby Week revenues.
CDI’s racing operations recorded net revenues of $33.1 million, down 3% from the $34.1 million figure of a year ago. Calder reported a 5% increase in wagering during the first three months, from $28.6 million to $29.9 million. Wagering at Fair Grounds fell 6% from $204 million to $191.2 million, with handle down 13% from $14.8 million to $12.9 million at Churchill Downs. Wagering declined 9%, from $72.4 million to $65.7 million at Arlington Park.
Churchill Downs Inc. reported strong first quarter operating results as its online account wagering and casino operations more than offset continuing losses from horse racing operations.
The company reported a loss of $3.1 million during the first three months of 2011, a significant improvement over the $8.7 million loss during the comparable period one year ago. Due to lack of live racing during the first three months of the year at some of its racetrack properties, CDI historically posts a first-quarter loss.
Revenues for the quarter totaled $131.6 million, up 54% from $85.2 million in the first-quarter of 2010.
The greatest increase in revenues came within the online sector, which was bolstered by CDI’s acquisition of Youbet.com in 2010. CDI reported first quarter online business revenues of $37 million, a 100% increase over the $18.5 million figure for the same period a year ago.
Casino revenues increased 75%, from $33.7 million to $59 million, with $14.8 million of that coming from Harlow’s, a Mississippi casino acquired in December 2010. CDI reported that net win per machine averaged $184 daily at Harlow’s. At Calder casino, located at the Florida racetrack, net gaming slot revenues increased $6.4 million, with net win per machine of $172 and Fair Grounds Slots in Louisiana had a revenue increase of $573,000, with $210 net win per machine daily.
Evans said CDI would continue to push for alternative gaming in Illinois, where Arlington Park is located, but that there is no indication that such efforts will succeed now.
The Churchill CEO who is chairman-elect also said the company was perpared to enter the Internet poker business should it be legalized by state or federal lawmakers.
“We’ll be ready to play in that market,” Evans said. “We’re ready to go.”
