Kentucky Derby postponement causes Churchill Down Inc.'s numbers to crater

Churchill Downs Inc. posted a net loss of $118.8 million in the second quarter of 2020, with revenue for the company cratering due to the postponement of the Kentucky Derby until the third quarter and widespread closures of casino properties across the United States, according to financial statements released by the company Thursday.

Net revenue for the company in the quarter was $185.1 million, according to the statements, compared to $477.4 million in net revenue during last year’s second quarter. Last year during the second quarter, the company had net income of $108.3 million.

Postponing the Derby had the most significant impact on the quarterly results, with revenue for Churchill Downs the racetrack down from $182.2 million last year to $23.3 million this year. Churchill Downs has rescheduled the Derby for Sept. 5, but the event’s revenue is likely to be severely impacted by limitations on ticket sales, attendance, and concessions.

Additionally, Churchill’s operating expenses for the Louisville track in the quarter was $31.1 million, a number that exceeded revenue by $7.8 million, according to the financial statements.

Churchill’s casino properties also were shuttered for most of the quarter, and its casino revenue dropped from $177.6 million last year to $37.3 million this year. Operating expenses for the casino unit exceeded revenue by $8.3 million.

Revenue from Churchill’s account-wagering operation, however, was up 26.8 percent in the quarter, from $95.6 million last year to $121.2 million this year. With the vast majority of racetracks holding spectator-free racing since the COVID-19 pandemic erupted in March, nearly all handle on racing in the past four months has been funneled through account-wagering operations.

Total handle for Churchill’s account-wagering company, Twinspires, rose from $468.8 million in the second quarter of last year to $569.5 million. With most sporting events canceled since March and many casinos closed, racing has been one of the few gambling options available during the shutdown.

In its financial statements, Churchill said it had cash and cash equivalents of $649.2 million at the end of the second quarter, compared to $96.2 million in cash at the end of the year. The company’s long-term debt has risen from $384 million at the end of the year to $1.08 billion at the end of the second quarter.