Kentucky Derby boosts Churchill Downs third quarter by $28.4 million, when compared to 2019
The Kentucky Derby, or Run for the Roses event, helped Churchill Downs run up Wall Street-forecast, topping third-quarter results.
Churchill Downs was forced to push the race event to Labor Day weekend due to pandemic restrictions, which saw fans barred from attending the event. It marked only the second time in the Derby's history that it had not taken place during the first Saturday in May since 1945 during World War II.
Understandably, lower ticket revenue, fewer sponsorship's and lower wagering accompanied the rescheduling of the race. Churchill Downs officials stated that “their decision to keep reserved seats and grandstands empty made sense”.
However, earnings did not suffer. Churchill Downs mentioned during a statement that took place on Thursday, that net income amounted to $43.2 million, or $1.08 per share, for the three months ended Sept. 30. This was a huge increase from the previous year, which registered a net income of $14.8 million, or 36 cents per share.
Officials further added that $27.6 million after-tax increase, accompanied by the operations and equity income from unconsolidated affiliates, contributed to the quarterly outcome. There was also a rise of 38.5% of $121.9 million from $88 million in relation to adjusted earnings before interest, taxes, depreciation and a cash flow measure that excludes one-time costs. Revenue by the end of the quarter surpassed the forecast of $293.5 million as it stood at $337.8 million, an increase of 10.3% on $306.3 million
During the same Thursday conference call with sector analysts, the record increase in revenue was highlighted. It was revealed that $116 million in revenue was generated through its TwinSpires online betting platform.
It was also reported that, excluding Derby Week, 40% of the platforms players were new and TwinSpires also encountered a 10% increase in handle wager per active player in the third quarter compared to 2019.
Overall, the platform's revenue increased to 77% when compared to 2019. While handle wager per active player rose to more than $730 million, equivalent of 69%.
The company praised the openings of the Oak Grove hotel-racino and the Newport racino, calling them potential future revenue boosters. Churchill Downs also stated that it was relieved to reopen their gaming properties after they were all ordered to shut due to the ongoing pandemic.
William Carstanjen, Churchill Downs CEO, noted that “Our third-quarter results were strong, not just because the Kentucky Derby was in it, but because of the strength of all of our businesses,” he further mentioned “Our focus in the quarter was on operating all of our properties under our strict safety and social distancing protocols against the continued backdrop of the COVID-19 pandemic.”
Carstenjen said horse racing fans tuned in to watch the Derby, drawing 20% more viewers than the most-watched sporting event on 2019’s Labor Day weekend. "In many ways,” he said, “the Kentucky Derby showed its strength as a unique and special asset. … It’s a great economic engine.” Carstanjen continued to say, during the conference call, that his company aims to run the next Kentucky Derby in its traditional date in May assuming that reserved seating will be at 40% to 50% of the 165,000 capacity.
Source: CDC Gaming Reports
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