Churchill Downs soars to numerous records through third quarter

Churchill Downs
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Churchill Downs has hit record revenue and earnings through the third quarter of the year driven by across the board increases, with the group’s live and historical racing and gaming segments standing out.

The gaming and racing group’s top line witnessed third quarter year-on-year growth of 49.43 per cent to $572.5m (2022: $383.1m), with net income up seven per cent to $61m (2022: $57m) and adjusted EBITDA closing at $218.2m, an increase of 34 per cent from $163.2m.

The lion’s share of Churchill Downs’ revenue came via its land-based gaming network, which saw records hit across both revenue and AEBITDA. 

The former delivered an increase of 32 per cent to $244.9m (2022: $185.9), driven by New York and Iowa properties gained in the company’s $2.48bn Peninsula Pacific Entertainment transaction. 

These were offset by a $8.7m decrease in Pennsylvania primarily due to a decision not to renew the management agreement at Lady Luck, as well as a $2.5m net decrease from our other gaming properties.

Earnings are up ten per cent to $122.3m (2022: $111.6m), with increases regarding the aforementioned properties being offset by numerous factors.

These include decreases of $6.5m from equity investments, $4.9m from other wholly-owned gaming properties, and $2.9m attributable to proceeds for business interruption insurance claims related to Hurricane Ida. 

“We received $4.1m of business interruption insurance proceeds in the third quarter of 2022, compared to $1.2m during the third quarter of 2023,” the group noted.

In addition, live and historical racing also delivered a best performance across revenue and AEBITDA, with the former more than doubling to record $225.5m (2022: $102.4m).

This is put down to increases of $89m courtesy of Virginia venues gained from the aforementioned purchase, $14.7m from properties acquired in the Ellis Park and Chasers transactions, $8.8m due to the opening of Turfway Park in Northern Kentucky in September 2022, $7.4m from Derby City Gaming property in Louisville, and $4.3m from Oak Grove in Southwestern Kentucky. 

These were partially offset by a $1.1m decrease at Churchill Downs Racetrack due to the decision to move July race days as part of the spring meet to Ellis Park. 

Earnings rose 134 per cent to $80.9m (2022: $34.5m), which each of the above cited once again, as well as a portion of benefit coming from the group’s Exacta purchase.

The TwinSpires horse racing online wagering business saw revenue increase five percentage points to $112.4m (2022: $107.4m), while AEBITDA through Q3 hit a high of $33.9m (2022: $31.1m).

Increases were attributable to the gain of Exacta and B2B expansion strategy associated with United Tote totalisator fees, with headwinds coming from a reduction in online casino and sports betting following a much publicised decision to exit these segments.