Gaming beats horses in 2013 Churchill Downs revenue

jpatton1@herald-leader.comFebruary 26, 2014 

Churchill Downs Horse Racing

Tapiture, ridden by jockey Ricardo Santana Jr., won the Kentucky Jockey Club Grade II Stakes race at Churchill Downs on Nov. 30, 2013. Churchill reported Wednesday that racing revenues for 2013 fell nine percent.

REED PALMER PHOTOGRAPHY — AP

For 2013, Churchill Downs Inc. made more money from casino gambling than fromf racing: full-year revenue from the company's five gaming properties surpassed revenue from the company's four racing properties for the first time, the company reported Wednesday.

Racing revenues for the year fell 9 percent, to $274 million, while revenue from other forms of gaming grew 33 percent, to $297.5 million, leading to net revenue of $779.3 million — a 7 percent increase over 2012.

Despite the increased revenue, fourth quarter and year-end earnings showed that the Louisville-based racetrack and casino company's earnings fell in 2013.

For the quarter, which ended Dec. 31, Churchill reported a net loss of $5.7 million, down from earnings of $2.4 million the same quarter of 2012. Per net diluted share, Churchill reported a loss of $0.33, compared with earnings of $0.14 in the same quarter of 2012. For the year, Churchill reported net earnings of $54.9 million, or $3.06 per diluted share, down 6 percent from 2012.

Churchill Downs executives will discuss the results at 9 a.m. Thursday in a conference call with analysts that can be accessed at ChurchillDownsIncorporated.com.

In a news release, Churchill Downs Inc. chairman and CEO Robert L. Evans said that "2013 was a good year, but we had planned to do even better." He noted that "general economy softness, notably in job growth and personal disposable income growth, along with state-specific changes in legislation and regulation, and one-time expenses combined to negatively affect our performance, particularly in the fourth-quarter."

Evans said that several developments in 2013 should help results in 2014.

"We acquired Oxford Casino in Oxford, Maine, last July and opened our joint venture project, Miami Valley Gaming & Racing, north of Cincinnati in December," Evans said. "Our $26.5 million investment in the new, 2,400-seat Grandstand Terrace and 15,224 square foot, 4K-resolution 'Big Board' video board at Churchill Downs Racetrack, combined with a new, 10-year media rights deal with NBC should be reflected in our 2014 Kentucky Oaks and Derby Week results."

Churchill and NBC announced the extended sponsorship deal for Derby and Oaks earlier Wednesday but did not release a dollar figure.

For 2013, profitability on the Kentucky Derby and Oaks was up 8 percent, or $5.8 million.

For the quarter, revenue was boosted by the Oxford Casino, but the increase wasn't enough to offset lower Calder Race Course revenues, driven by lost hosting fees and a 22 percent decline in live races, Churchill said. Additionally, the company spent $1 million on a new online gaming platform and $2.5 million in relation to potential rights for a New Jersey internet gaming deal that fell through. Churchill is suing to get that payment back.

Janet Patton: (859) 231-3264. Twitter: @janetpattonhl.

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