Churchill Downs Inc. posts record quarterly revenue

Churchill Downs Inc. had net income of $57.3 million in the second quarter of 2014 on record quarterly revenue of $303.7 million, according to financial statements released Wednesday.

All of Churchill’s major business segments experienced growth in the quarter, with racing revenue from its four tracks up slightly, by 1 percent; revenue from its casinos up 23 percent; and revenues from the company’s mostly racing-related online business up 9 percent, according to the statements.

Racing revenue during the quarter was $159.4 million, a figure that includes revenue from the company’s Kentucky Derby and Kentucky Oaks, held the first weekend in May. In a statement accompanying the financial documents, Churchill said its earnings before interest, taxes, depreciation, and amortization (EBIDTA) for the Derby and Oaks was up $8.8 million from last year’s events, setting a record.

Revenue from Churchill’s five casino properties, including casinos at Fair Grounds in New Orleans and Calder Race Course in Miami, was $82.0 million, up 23 percent compared to last year’s second quarter. All of the gain, however, was due to the company’s purchase of a casino in Maine last July. Net revenues at all of its other casino properties were down compared to the second quarter of last year, some by as much as 10 percent, among a slowdown in U.S. casino operations in general.

Revenue from twinspires.com, Churchill’s account-wagering company, and its other online businesses, including an offshore wagering company for high rollers and robotic wagering programs, was $57.1 million, up 9 percent compared to revenue for the businesses of $52.5 million in the second quarter of last year, according to the financial statements. Churchill said in the release that handle through its online businesses was up 5.5 percent during the quarter.

Although handle during Churchill’s spring meet, which ended in late July, fell 11.5 percent amid field-size declines and calls for a boycott, revenue at the track during the second quarter was $118.3 million, up 9 percent compared to last year, according to the financial statements. Churchill raised the takeout rates on wagering for its spring meet, spurring some horseplayers to call for the boycott. Churchill also began seeking a higher rate for its simulcast signal this year, which may have raised more money for the track from out-of-state simulcast outlets.

Racing revenue at Calder fell 43 percent during the quarter, to $9.7 million, as the track raced head-to-head against Gulfstream Park and lost a monopoly on selling simulcast signals in the state. At the end of the quarter, Churchill reached an agreement with the owner of Gulfstream, the Stronach Group, that gave the Stronach Group the right to lease Calder’s racing operation while Churchill retained ownership and operation of the track’s casino, which had revenue of $19.8 million in the second quarter.