Gaming, Online Sectors Help CDI Bottom Line

Churchill Downs Inc. reported growth in net earnings from continuing operations.

Churchill Downs Inc. reported net earnings from continuing operations of $19.6 million in 2010, up from $17.7 million for 2009.

The company March 14 released its fourth-quarter and full-year financial statements for 2010. Net revenue for 2010 was $585.3 million, up 24% from $470.5 million the year before.

CDI attributed net revenue growth to the operation of Calder Casino, which opened Jan. 22, 2010; the company’s acquisition of the advance deposit wagering system; and continued growth in its online business segment, including its branded ADW platform.

For the fourth quarter CDI reported net revenue from continuing operations of $137.2 million, up 47% from $93.6 million in the fourth quarter of 2009. CDI cited hosting the 2010 Breeders’ Cup World Championships as a key revenue driver.

“The significant capital we invested to expand our gaming business and grow our online business during 2010 contributed to the record net revenues from continuing operations and record (earnings before interest, taxes, depreciation, and amortization) for the year,” CDI president and chief executive officer Bob Evans said in a statement accompanying the financial report. “We look forward to an even stronger performance in 2011 as we record the full year results from the combined account-wagering platform,  from Harlow’s (Casino), and from the Calder Casino, which has been subject to a lower gaming tax rate since July 2010.

“Additionally, we incurred higher expenses last year related to our acquisitions, many of which are costs that should not impact our results going forward. Overall, we are very pleased to see the positive impact these strategic investments have had on CDI’s profitability.

“We still face a number of challenges as we work to improve the results of our racing operations, including nationwide declines in handle and intense competition for racehorses with tracks that are able to subsidize their purses with alternative gaming revenues. The results from last year’s Kentucky Derby, Kentucky Oaks, and the Breeders’ Cup World Thoroughbred Championships at Churchill Downs demonstrate to us that racing fans will support a high-quality racing product that is packaged with an exceptional entertainment experience, and we continue to focus on producing racing that customers want.

“Our sales of reserved seats for this year’s Derby and Oaks are trending ahead of last year, as are sales of premium seats to Churchill Downs’ “Opening Night” event on April 30. Starting the 2011 Kentucky Derby week with a night racing event under the lights will be another first for our flagship venue, and we hope it becomes a lasting part of the Derby tradition.”