Edited press release
Churchill Downs Inc. reported that business gains at its Louisiana operations helped the company reduce its first-quarter loss by 15.11%, from $9.93 million in 2006 to $8.43 million this year.
CDI usually reports a net loss in the first quarter of each year because its racetracks host few live racing days. In the first quarter of 2007, however, Fair Grounds raced 57 days; because of hurricane damage, the track offered only 12 days of live racing at Harrah’s Louisiana Downs in the first quarter of 2006.
Net revenue from continuing operations for the first quarter of 2007 was $47.84 million, up 32.55% from $36.09 million a year ago.
In the first quarter of 2007, CDI also benefited from lower corporate expenses; Arlington Park serving as the host site for “dark day” simulcast wagering in Illinois for an additional eight days; and from a positive adjustment in workers’ compensation insurance reserves.
CDI president and chief executive officer Robert Evans said that while improving the company’s year-over-year financial performance from continuing operations during the first quarter, the Churchill Downs team also moved forward with a key strategic initiative intended to position the Company for future growth.
“In early March, we announced our entry into the account-wagering business, and two months later launched our new online wagering platform, twinspires.com, in time to accept wagers on this year’s Kentucky Derby (gr. I) and Oaks (gr. I) at Churchill Downs,” Evans said. “We experienced exceptional demand from customers wanting to register for TwinSpires accounts during the four days between our launch date and the Kentucky Derby on May 5, with approximately 9,500 customers signing up for and funding TwinSpires accounts. We had a very ambitious plan to bring TwinSpires to the market in a very short period of time.
“We are still examining to what extent changes in the account-wagering market may have impacted handle on Kentucky Derby and Oaks Days, considering two large U.S account-wagering providers were not taking wagers on our products and our own platform, TwinSpires, debuted in the middle of Derby week. Based on the wagering data we have so far, we are pleased to see that handle did migrate to other account-wagering providers that pay higher host-fee commissions to the horsemen and tracks that produce the races as a result of the agreements they negotiated with TrackNet Media Group. Through these agreements, we have the potential for revenue and purse growth with or without growth in handle.
“In the weeks ahead, we look forward to beginning construction on both a temporary and permanent slot machine gaming facility at Fair Grounds, with an October 2007 target date for the opening of our temporary operation. We also anticipate adding new content, features, and handicapping tools to our TwinSpires account-wagering platform that will further distinguish TwinSpires from its competitors.”