With eyes looking forward to next weekend's Kentucky Oaks and Derby, Churchill Downs Inc. executives said Thursday that they consider the company's first quarter "solid" despite a $700,000 loss and that they expect great things to come next quarter.
In a conference call with stock market analysts a day after the Louisville horse racing and gambling company's earnings announcement, they discussed the results so far this year, which have seen lackluster revenues from Mississippi and Louisiana casinos.
But CEO Bob Evans was excited about the huge $12 million video screen that Churchill has installed at the Louisville track.
"People will be really excited," Evans predicted of the 171-foot-wide, 90-foot-tall, ultra-high-definition video board. "It lets us do things no racetrack has ever been able to do. ... Everyone will be able to see the race, from beginning to end. Horses are about 70 feet tall on the screen. I don't think it will be too hard to spot your favorite."
Evans said Churchill will have some advertising and sponsorships for the big board this year, and he expects more next year.
There were questions from analysts about some of the bigger issues that Churchill is facing, including the hold on its license at Fair Grounds racetrack in New Orleans.
Bill Carstanjen, chief operating officer, said that as a result of a "fairly active publicity campaign requesting that we invest more on the racing side at Fair Grounds," Churchill's annual renewal of its 10-year racetrack license has been upheld. Company leaders were due back in front of the Louisiana racing commission Thursday.
"If they were ever to withdraw, we would dispute that vigorously and believe our position is strong," he said.
Churchill leaders also were asked about the $1.1 million spent last quarter on an Internet gambling platform. The company also put $1.1 million in the fourth quarter of 2013. Evans didn't give any indication when that site will go live or begin to produce revenue, but he said that level of investment will continue at least through the end of the year — which would mean Churchill will invest more than $5.5 million.
Churchill already has bought an online poker site, although it doesn't yet offer live gambling.
"We believe over time the Internet gaming market will develop into a significant opportunity for us, as well as for others," Evans said. "We plan to be a significant player in that market."
Churchill acknowledged spending $600,000 in unspecified efforts to get expanded gambling through the Kentucky legislature this year. Churchill executives, including Evans, were involved in the failed "Kentucky Wins!" campaign.
"We'll have another shot in 2015, but that's a short session and probably unlikely that anything material gets done then," Evans said. "But realistically our next shot is 2016."