By Kathleen Adams
An official for Churchill Downs Inc. told some 200 financial analysts and fund managers gathered for the inaugural INVESTKentucky conference in Louisville Thursday the racing industry as a whole is in a period of flat growth. "That's why we need Smarty Jones," joked Michael Miller, chief financial officer for CDI. But Miller's tone turned serious as he explained to conference participants that racing has entered an era in which, "wagering seems to have matured fully."
In order to remain financially viable in the future, Miller said CDI plans to actively pursue alternative gaming and the development of overseas markets. As for introducing slot machines at its six racetracks across the country, Miller admitted Churchill Downs hasn't been able to get a lot done legislatively. "It's like handicapping 2-year-old maidens, trying to determine what the legislature will do," he said. Progress, however slow, is being made, he said
In November, voters in California will decide a referendum that will allow slot machines at certain racetracks and card clubs in the state. "It rests on the theory that we would pay a tax where the Indians are not," Miller said in reference to Indian casinos. "How supportive Gov. Schwarzenegger will be is hard to say." A similar movement is underway in Florida, where voters throughout the state will decide whether or not to bring alternative gaming to Dade and Broward counties. When asked specifically about slot machines making an appearance at Kentucky racetracks, Miller shrugged his shoulders and replied: "I don't know. We can't seem to figure it out." Miller seemed most upbeat when discussing plans to develop overseas markets. Currently, Churchill Downs receives no part of the millions of dollars wagered each year internationally. But Miller said that could change. "We really need to get into the international market in a big way," he said. "Each country has its own industry that it's trying to protect. It's like tariffs. You don't want to just throw open the borders. We need to forge alliances with other content providers. If we go into Germany, they're going to want their content to come here. That's where we can leverage the Kentucky Derby." And Churchill Downs, Inc. is also in the middle of implementing a new strategic plan in which customer focus is receiving renewed attention. "It's one of the most exciting things we're doing," Miller explained. "Eighty-five percent of wagering is done through simulcasting. So, we interface with people we don't ever touch. It's important to find out who these people are, and tailor our programs to our customers." A master development plan also exists for all CDI. racetracks to see what excess real estate is available for possible development. The individual tracks will be encouraged to grow into year-round facilities. Hosted by CDI, INVESTKentucky conference chairman Terry McWilliams said the event was designed to create opportunities for both large and small companies to get in front of the investor community. Twelve Kentucky-based businesses participated.