Through the first quarter of 2022, Churchill Downs sets records

Gambling News

Through the first quarter of 2022, Churchill Downs sets records

Churchill Downs has set a number of new benchmarks across its primary financial metrics through the first quarter, with the company's land-based gaming sector continuing to account for the lion's share of overall revenue.

The firm has achieved its highest quarterly performance in terms of sales, net income, and adjusted EBITDA for the first quarter of the year, with the former increasing by 10.93 percent to $364.1 million (compared to 2021's figure of $324.3 million).

The January through March time frame had a 14.25 percent increase in net income, which brought it to $42.1 million (2021: $36.1 million), while AEBITDA saw a 13.93 percent gain, bringing it to $128.5 million (2021: $110.6 million).

This comes during a quarter in which CDI announced agreements to acquire all of the assets of Peninsula Pacific Entertainment for a total of $2.485 billion, as well as Chasers Poker Room in Salem, New Hampshire, along with development plans for an investment of up to $150 million total. Both of these deals were announced simultaneously.

In addition, the first two phases of an already-announced $90 million expansion of Rivers Casino in Des Plaines have been finished.

Gaming continues to be the largest contributor on a segmented basis after recording Q1 revenue of $179.2 million. This represents an increase of 14% compared to 2021's Q1 revenue of $154 million, which was brought about by the removal of certain capacity restrictions that had been in place during the previous year at Oxford, Calder, and Presque Isle.

Because of the capacity limits indicated earlier, adjusted EBITDA climbed by 9.54 percent, reaching $91.1 million in 2020 from $82.4 million in 2021. This growth was driven by greater net sales as well as a rise of $3.1 million in equity investments.

Revenue from CDI's live and historical racing division increased by 25.8 percent to $87.2 million in 2022 (it had been $64.7 million in 2021), primarily due to increases of $11 million at Oak Grove Racing, Gaming and Hotel, $9.9 million from Derby City Gaming, and $1.9 million at Newport Racing & Gaming. This increase reflects overall growth as well as the elimination of COVID mandated restrictions. The adjusted EBITDA came in at $27.9 million in 2021, representing a 34.4 percent increase.

Last but not least, TwinSpires brought in revenue totaling $101.4 million, which was down 3.5 percent from $105 million the previous year. This was due to a decline of $6.9 million in horse racing, which was partially offset by an increase of $3.3 million across the sports betting and online casino division.

The former has decreased as a result of customers going back to traditional brick and mortar establishments, while the latter has benefited from development into more states, according to CDI.

The difference between the prior year's adjusted EBITDA of $23.1 million and the current year's adjusted EBITDA of $24.1 million is related to a rise of $3.7 million across sports and casino as a result of lower marketing and promotional efforts.

CDI said earlier this year that it planned to exit the business of providing B2C online sports betting and gaming services over the next six months.

The operator indicated that the decision had already been made since it does not see a route that would allow the business model to produce stable and appropriate profits "for at least several years."

This happened as the organization commented that it "had great aspirations for the ability to establish a lucrative company in the space" with the overturning of PASPA in 2018. This came as the group reflected that it "had high hopes for the potential to build a profitable business in the area."