Churchill Downs Inc. has record revenue but net income relatively flat

Churchill Downs Inc. had net income of $61.0 million in the third quarter of 2023, up $4 million compared to the same quarter last year, according to financial statements released on Wednesday afternoon.

Churchill had record revenues in the quarter of $572.5 million, up 49.4 percent compared to the third quarter of last year, but most of the new revenue came from casino properties the company acquired in Virginia, New York, and Iowa late last year. Last year in the third quarter, Churchill had $383.1 million in net revenue, and its net income was $57.0 million.

During the quarter, Churchill’s interest expense was $67.9 million, up 87 percent over interest expense in the third quarter last year. For the first nine months of the year, interest expense has more than doubled, from $92.6 million to $197.8 million, according to the financial statements. At the end of the third quarter, Churchill had long-term debt of $1.59 billion and $3.07 million in notes payable on its balance sheet.

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The company’s live racing and historical horse racing segment had net revenue of $219.5 million in the quarter, up from $92.3 million last year. In last year’s transaction, Churchill acquired Colonial Downs and its off-track betting parlors in Virginia, which all operate historical horse racing machines.

For its racing-related assets, Churchill said in a release accompanying the financial statements that net revenue at Churchill Downs in the quarter – which included July, August, and September – was negatively impacted by $1.1 million due to the decision to move the remainder of the track’s live meet to Ellis Park in June. Churchill would have run over the July 4 weekend if the meet remained at the track.

Revenue at TwinSpires, Churchill’s account-wagering operation, was up $2.3 million in the quarter, to $108.5 million, but operating expenses for the operation increased $8.9 million in the quarter, to $73.4 million.

Revenue from casinos owned by Churchill that do not exclusively operate historical horse racing machines was up 33.2 percent, or $59 million, to $244.3 million. In the release, Churchill said that new properties acquired in the transaction last year in New York and Iowa accounted for $70.2 million in new revenue for the segment during the quarter. Revenues at existing properties were flat.

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