Boosted by the recent acquisition of online betting service Youbet.com and a new casino in Florida, Churchill Downs said Wednesday its third-quarter revenue jumped 35 percent. But the decision to close its entertainment division after the failure of the HullabaLOU music festival led the company to report a loss for the quarter.
The Louisville-based company had revenue of $135.7 million in the quarter, up from $100.9 million in the same period a year ago. Driving that increase was $25 million in revenue linked to Youbet and United Tote, which Churchill acquired in June. Because of that, their results were not included in last year's figures.
Churchill's Calder Casino, which opened at its Florida track just before this year's Super Bowl, also contributed $13.2 million, according to Churchill.
But the boost those two operations gave wasn't enough to overcome a $4.4 million accounting loss claimed for discontinuing Churchill Downs Entertainment. Last month, the company reversed course and canceled plans for a second HullabaLOU Music Festival, which had been staged by the division in July. The festival lost more than $5 million.
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At the same time, Churchill announced it would dissolve the division, which also had staged food and wine festivals in an attempt to use the company's properties for functions other than racing.
With the loss attributed to that division, Churchill wound up reporting an overall loss of $689,000, or 4 cents a share, in the third quarter, better than its loss of $2.33 million, or 17 cents a share, in the same period in 2009.
The quarter also saw Churchill's core racing operations continue to struggle. That division's revenue fell $5.9 million, or 9 percent, to $62.4 million.
That still outpaces revenue results from Churchill's online businesses ($38.7 million) and gaming ($28.3 million).
"While the third quarter showed that the business of operating race tracks remains in decline, we feel a great sense of optimism ... as we execute on our diversification strategy," said CEO Bob Evans in a statement.