Slots help boost Churchill's net income
Churchill Downs Inc. had net income of $2.5 million in the third quarter of 2008, up $1.7 million compared with third quarter net income last year, according to financial documents released by the company on Wednesday.
The results were bolstered by significant increases in revenues from slot machines at Churchill's racetrack in New Orleans and from the company's 15-month-old account-wagering operation, even as overall revenues during the quarter declined.
Revenue in the quarter was $99.6 million, compared with $103.9 million in the third quarter last year, a 4 percent decline. Revenue from racing operations was $73.9 million, a 15 percent decline from last year's third quarter revenues of $87.1 million. The decline was principally caused by an $8.5 million drop in revenue from Calder Race Course in Florida, where disputes with horsemen have limited distribution of the track's simulcast signal. In addition, revenues from racing operations at Churchill's other tracks - Fair Grounds in New Orleans, Arlington Park near Chicago, and Churchill Downs in Louisville - were all down in the quarter, reflecting a general drop-off in betting on the sport as the U.S. economy deteriorates.
Revenue from Churchill's account-wagering operation was $13.1 million, a 46 percent increase over revenues of $8.9 million in the third quarter of last year. Churchill launched its account-wagering operation, Twinspires.com, in the second quarter last year, and then later merged three account-wagering companies it bought into the operation. The company has been aggressively pushing its customers to the account-wagering business.
Revenue from slot machines at Fair Grounds jumped 83 percent to $11.6 million in the quarter, up from $6.3 million last year, according to the financial statements.
For the first nine months of the year, Churchill has net earnings of $32.6 million on revenue of $344 million. For the first nine months of last year, net earnings were $22.2 million on revenue of $321.7 million.