Churchill Downs Incorporated has seen increases in gaming and racetrack revenue offset a slight online wagering decline in the third quarter of the year.
The Louisville, Kentucky, headquartered firm, which unveiled $411m of expansions to two of its stable earlier today, saw net revenue increase 38 per cent during the period to $306.3m (2018: $221.3).
Adjusted EBITDA for Q3 rose 41.7 per cent to $88m (2018: $62.1m) as net income saw a significant decline to $14.8m, comprised of $15.2m in net income from continuing operations and $400,000 in net loss from discontinued operations.
Falling from the prior year’s $56.3, made up of $58m in net income from continuing operations and $1.7m in net loss from discontinued, the decrease was primarily due to a $42.3m after-tax non-cash gain in the third quarter of 2018 on the acquisition of the remaining 50 per cent equity interest in Ocean Downs Casino and Racetrack, in exchange for the 25 per cent equity interest in the Saratoga New York and Saratoga Colorado properties.
Excluding this, and further issues, Q3 net income from continuing operations increased $0.4m, with net loss from discontinued operations decreasing by $1.3m compared to the prior year due to lower legal expenses related to Big Fish Games.
CDI’s gaming segment saw revenue soar 61.6 per cent to $178.6m (2018: $110.5m), with the firm stressing it was driven by:
- $38.3m increase due to the acquisition of Presque Isle Downs and Casino.
- $18.6m increase due to the consolidation of Ocean Downs Casino and Racetrack, as a result of the acquisition of the remaining 37.5 per cent.
- $10m increase due to the company’s assumption of management and acquisition of certain assets of Lady Luck Casino Nemacolin.
- $2m increase at Mississippi properties due to rising attendance driven by the opening of retail BetAmerica Sportsbooks.
Adjusted EBITDA for the segment also rose to $71.7m, 60.4 per cent up from $44.7m, pushed along by increases from equity investment in Midwest Gaming and the acquisition of Presque Isle and Lady Luck Nemacolin.
Online wagering dropped slightly to $70.4m (2018: $72.1m), with online sports betting and igaming net revenues down $100,000 as sign-up bonus incentives in New Jersey outpaced gross revenue.
Net revenue grew $20.9m for Q3 in the firm’s ‘Churchill Downs’ category due to a $20.2m increase from Derby City Gaming as a result of continued growth and a full quarter of results, and a $700,000 rise at Churchill Downs Racetrack, primarily due to increases handle.