Churchill Downs Reports Record 2023 Revenues
Kentucky-based horse racing and gambling operator Churchill Downs Incorporated (CDI) reported a record $2.5 billion in revenues for 2023.
That’s up 36% compared to 2022. The company’s results were buoyed by significant expansion of its casino and historical horse racing gambling venues, and its acquisition of Virginia horse betting operator Peninsula Pacific.
The 2023 Kentucky Derby generated record interest and handle, even as it proved a tough racing season for Churchill Downs. A dozen horses died at its main track across the race season, leading to a two-month shutdown as it conducted a comprehensive safety review and upgrade.
Nevertheless, CDI’s revenues and adjusted revenues hit record levels. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) hit $1 billion for the year.
Casino-style gaming accounted for $974.6 million of base revenues, with the rest coming from online betting and its U.S. horse race betting operations.
Property Breakdown
Rather than a regional revenue breakdown, Churchill Downs’ 2023 report offered an insight into the revenue increases at each of its new properties.
Its record revenues were driven primarily by its Virginia casinos acquisitions, which added $140 million in revenues. After the Peninsula Pacific deal, Virginia became Churchill Downs’ biggest market, ahead of Kentucky.
The record $15.7 million from the Kentucky Derby weekend was another highlight.
The addition of six retail sportsbooks in Kentucky when that market opened in September would have also boosted revenues, although CDI did not report by how much.
Also in its home state, the opening of Derby City Gaming in downtown Louisville, Kentucky, added $7.2 million to the operator’s pot in just a few months after opening in September.
On the other hand, non-Derby Week racing revenues were down $7.1 million for the year. That was primarily due to the moving of the Spring Meet at Churchill Downs Racetrack to the smaller Ellis Park because of the aforementioned horse deaths and subsequent safety review.
The operator’s report euphemistically called it a “decision to move a portion of the Churchill Downs Racetrack Spring Meet to Ellis Park” without mentioning the equine fatalities.
The biggest fall for the year in revenues came from its losses in the Pennsylvania casinos market. In July 2023, the struggling Lady Luck Nemacolin ended its five-year contract to run the Western Pennsylvania casino’s operations, which cost CDI $16.9 million in revenues.
Total costs for the year also increased. Operating expenses were at $1.9 billion for the year, which was up 27% on the previous year. This included the above mentioned product and casino venue launches compared to 2022, when it made several asset sales to offset costs.
Racing into 2024
In 2024, Churchill Downs came out with a statement of intent when it upped the prize fund for its flagship race.
The operator increased the prize pool for the upcoming 150th Kentucky Derby event to $5 million. That’s a 67% increase on the 2023 prize.
That pot will be helped by a new deal with venerable media company Sports Illustrated, who will be hosting a sportsbook experience at the 2024 Kentucky Derby.
CDI also soon plans to launch its latest venture among Indiana casinos. The long-awaited Terra Haute Casino Resort is set to open doors on April 5.
The $239 million venue is a full casino gaming resort, with 1,000 slot machines, 34 gaming tables, and a 10-story luxury hotel tower, as well as a new addition to the list of Indiana retail sportsbooks.
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