Churchill Downs Inc. had record net income in 2022
Churchill Downs Inc. had record net income of $439.4 million in 2022, according to financial documents released on Wednesday afternoon, with roughly $200 million of that income coming from the sale of property at the former Calder Race Course in Florida.
The record figure was attained during a year in which Churchill bought and sold numerous properties and companies, held a Kentucky Derby without capacity restrictions for the first time since 2020, and saw its net revenue from its Kentucky casinos skyrocket. On the flip side, revenue at its account-wagering operation declined as bettors made more of their wagers at bricks-and-mortar locations, while business at Churchill’s casinos in several other states dropped.
All told, revenue from live racing at the company’s racetracks in the U.S. and at its Kentucky casino operations jumped from $409.1 million in 2021 to $614.6 million, according to the financial documents. In a release describing the results, Churchill said $77.6 million of the increase was “primarily due to the running of the 2022 Kentucky Derby without capacity restrictions,” a figure that demonstrates why Churchill continues to pour money into capital expenditures at its Louisville track to leverage the power of the Derby.
During 2022, Churchill purchased Ellis Park and its casino operations in western Kentucky, adding the track to a stable of Kentucky operations that also includes Turfway Park and the standardbred racetrack Oak Grove. Both Turfway and Oak Grove also operate casinos. It also purchased substantially all of the assets of a company that owned and operated Colonial Downs and its off-track casinos in Virginia.
Net revenue for Twinspires, Churchill’s account-wagering business, dropped from $457.8 million to $441.6 million, a decline of 3.6 percent. Churchill attributed the decline to exit costs from its decision earlier in the year to drop a sports-betting operation tied to the Twinspires brand, as well as “a higher portion of our patrons” choosing to place their bets at tracks or off-track betting facilities compared to 2021.
Although net revenue for Churchill’s casinos outside of Kentucky increased 9.1 percent, from $698.4 million to $761.8 million, most of that gain was attributable to casinos acquired under transactions that closed in 2022. In a release, Churchill said that net revenues for the company’s casinos in Mississippi and Pennsylvania dropped $18.3 million “due to the current economic conditions.”
Churchill spent a net of $2.92 billion on acquisitions in 2022, and its long-term debt obligations increased from $780.8 million in 2021 to $2.86 billion in 2022, according to its statement of cash flows. It ended the year with $204.7 million in cash, compared to $355.6 million in cash at the end of 2021. Its interest expense in 2022 was $147.3 million, compared to $84.7 million in 2021.
In total, Churchill had $1.810 billion in net revenue for the year, up 13.3 percent compare to net revenue of $1.597 billion.
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