Churchill Downs Inc. net income down, despite record revenues in first quarter

Churchill Downs Inc. had net income of $1.1 million in the first quarter of 2013, down from net income of $1.4 million in the first quarter of 2012, on record revenues of $148.1 million, according to financial statements released by the company late Wednesday.

Revenue was up 7 percent compared to the first quarter last year, but the entire gain was due to the inclusion of revenues from a casino in Mississippi that Churchill did not own last year in the first quarter. Operating income was down 20 percent in the quarter, from $3.7 million in the first quarter of 2012 to $3.0 million this year.

Revenue from Churchill’s racing operations declined 8 percent, from $30.2 million last year to $27.8 million this year. Casino and other gambling revenue was up 21 percent, from $59.3 million to $72.9 million, while revenue from the company’s online operations, including market-leading account-wagering company twinspires.com, was down 3 percent, from $44.0 million last year to $43 million this year.

In a release, Churchill said that it expected higher revenues from its casinos but that the reinstatement of the payroll tax this year and delays in distributing income-tax refunds may have put less money in the pockets of casino customers this year. Casinos across the country have generally posted much lower revenues for the first three months of this year.

While revenues from Churchill’s online business have been one of its strong spots over the past several years, Churchill said a decision to cease taking bets from customers in Illinois had an impact on its online first-quarter revenues this year.