The announcement followed the release of first-quarter earnings that showed record earnings thanks to continued gains from its online gaming company, Big Fish.
The hotel will include an expansion of the existing Oxford Casino, plus 100 new guest rooms, more dining options, and meeting and banquet space.
“The new hotel will be a great addition to the Oxford Casino property and is a sign of our commitment to provide a first class facility in southern Maine,” Bill Mudd, president and chief operating officer, said in the news release.
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This is the second time CDI has invested in and expanded the Oxford casino since buying the property in July 2013.
For the quarter, Churchill reported profits of $2.8 million, or 16 cents per diluted share, up from a loss of $1.6 million, or 9 cents per diluted share, in the same quarter of 2015.
“We delivered record net revenue and adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) this quarter and are encouraged by the early 2016 results in each of our segments,” CEO Bill Carstanjen said in a news release. “With a strong first quarter behind us, we are now focused on the 142nd Kentucky Derby on May 7.”
Churchill’s racing division reported an increase in revenue but still finished the quarter with a loss, while revenue from the casino division was flat and revenue from the TwinSpires advance-deposit wagering division was up slightly.
Big Fish Games showed significant gains, growing from $91.9 million in the first quarter of 2015 to $122.1 million in 2016. Top games include Gummy Drop!, Dungeon Boss, Fairway Solitaire Blast and Sunken Secrets.
For the quarter, total bookings (payments players make in the game) grew $23.4 million, or 22 percent.
Despite the increase in revenue, the Big Fish division showed a $5 million drop in contribution to EBITA.
In a conference call with analysts Friday, Churchill executives explained that $3.3 million of that was a one-time benefit in 2015 because of an accounting change. The rest is due to increased spending on user acquisition, Carstanjen said.
Big Fish has been ramping up its spending on drawing in new players to new games and encouraging them to spend money in free-to-play games, he said. The company spent $14 million more on user acquisition in the first quarter of 2016 than in the first quarter of 2015.
“Most all was due to new investment opportunities for newer games,” Carstanjen said.
Big Fish Casino, which is a slots-style game that rewards players with more play and functions as a social platform, has seen an increase in paying users, Carstanjen said.
“We plan to release new products in this space,” Carstanjen said. “We are on this.”
Churchill Downs Inc. will release information after the Kentucky Oaks and Derby next weekend on the financial impact. Details on ticket sales or new sponsorships were not released.
“We will let (that release) speak for itself. We are excited for the 142nd edition. We just completed a $19 million renovation and we look forward to showing that off as well as celebrating the day with all our fans,” Carstanjen said.