Churchill Downs Incorporated’s net revenue for 2019 increased 33.0% to $1.33bn, thanks mostly to the building and acquisition of new casinos, though this expansion also weighed on the operator’s bottom line.
Casinos away from the Churchill Downs site were the largest source of revenue for CDI, at $692.4m, up 54.0%.
Much of this was due to the acquisition of new casinos. Presque Isle in Erie, Pennsylvania, and Lady Luck Nemacolin in Farmington, Pennsylvania were purchased in January 2019, while the acquisition of Ocean Downs Casino in Berlin, Maryland – in exchange for its ts 25% Interest in the Saratoga Casino – was completed in September 2018.
Presque Isle, in its first year under CDI ownership, was the operator’s most successful property, bringing in $138.5m in revenue. Lady Luck brought in $29.3m while Ocean Downs contributed $85.9m.
Revenue increased at all but one of CDI’s other casinos, too. The Fair Grounds Race Course & Slots in New Orleans brought in $123.0m, up 4.5%. Revenue at Calder Casino, in Miami Gardens, Florida, was up 1.2% to $99.m, while revenue from Riverwalk casino in Mississippi rose 8.1% to $58.9m.
Harlow’s Casino, also in Mississippi, brought in $55.3m, up 10.2%. However, revenue from the Oxford casino in Maine declined 0.3% to $101.7m.
Churchill Downs itself brought in $274.2m in revenue up 40.0%. Of this figure, $187.6m came from the Churchill Downs racetrack, up 3.6%, and $86.6m from the Derby City Gaming facility, opened in September 2018 on the Churchill Downs site.
Online wagering remained level at $290.5m, with almost this entire figure coming from the TwinSpires online racing betting site. A total of $600,000 was brought in from online sports betting and igaming on Churchill Downs Interactive’s BetAmerica-branded site. Other revenue fell 1.2% to $72.6m.
The new casino acquisitions also led to greater operating expenses, at $1.11bn, up 35.8%. Operating expenses from gaming facilities (excluding the Churchill Downs site) came to $528.1m, up 59.5%. Operating expenses from the Churchill Downs site came to $163.8m, up 40.8%.
Despite revenue remaining stable, online operating expenses rose 4.9% to $205.8m.
Selling, general and administrative expenses rose 34.7% to $122.0m. Transaction expenses almost halved to $5.3m while all other operating expenses rose 17.3% to $89.0m.
These costs left operating income of $215.7m, up 14.2%.
The operator paid interest costs of $70.9m and received investment equity income of $50.6m.
The operator paid $19.3m in other expenses, a contrast from 2018, when it received $45.1m in other income. This, plus a $54.9m gain from the purchase of CDI’s Ocean Downs property, meant that income from continuing operations declined 16.0% to $233.9m.
After paying $56.8m in taxes, up 10.7% from 2018m CDI’s ncome from continuing operations came to $139.6m, down 23.5%.
CDI made a loss of $2.4m on discontinued operations in 2019, compared to a profit of $170.2m in 2018. This led to overall income of $173.2m, down 41.1%.
For the fourth quarter of 2019, CDI’s revenue came to $280.6m, up 28.1%. Revenue from the Churchill Downs racetrack slightly declined to $15.4m, but Derby City revenue almost doubled to $24.2m.
Land-based gaming revenue away from Chruchill Downs came to $167.7m, up 40.3% and led by Presque Isle at $33.6m.
Onlinewagering revenue remained flat at $61.6m, while other revenue increased to $11.7m.
CDI’s operating expenses for the quarter, however, increased 33.9% to $277.1m. Gaming facilities made up the largest portion of this at $132.6m. Expenses from Churchill Downs came to $36.0m and online wagering $46.5m.
Selling, general and administrative expenses increased to $32.6m and transaction expenses fell to $300,000. Other expenses more than doubled to $29.1m.
These costs resulted in operating income of $3.5m. After an $18.9m interest expense, a $22.9m gain on investments, a $400,000 gain from the Ocean Downs purchase and $4.4m in other income, CDI’s pre-tax income from continuing operations came to $7.9m.
CDI paid $3.7m in taxes, resulting in after-tax income of $4.2m. After discontinued operations were accounted for, the operator’s final profit for the quarter came to $3.7m, down 67.5%.