Churchill Downs Inc. Optimistic Despite 2020 Challenges

As expected in a year that many of its facilities were forced to close to the public or faced significant attendance restrictions because of protocols aimed to halt the spread of COVID-19, casino and track owner Churchill Downs Inc. reported losses for 2020.

That said, the company saw improving fourth quarter numbers and its TwinSpires.com advance-deposit wagering platform helped offset some of those 2020 losses.

In the company's business results for the year and fourth quarter of 2020 announced after the close of trading Feb. 24, CDI reports a decline in adjusted net income to $33.3 million, down 81% compared with $179.9 million in 2019. The company reports a 37% decline in adjusted earnings to $286.5 million.

CDI attributed those losses to "the temporary suspension of operations at all of our gaming properties that reduced the revenue generated at these properties."

With horseplayers seeing tracks and simulcast facilities closed in 2020, ADWs flourished and CDI-owned TwinSpires.com certainly welcomed that business. Net revenue for TwinSpires reached a record $405 million, up 39% compared with 2019. Adjusted earnings for TwinSpires improved 62% to $126.8 million.

In the fourth quarter the company saw positive signs as its net income improved to $17.1 million compared with just $4 million in the final quarter of 2019. Adjusted earnings improved from $73.8 million to $79.2 million.

The company noted that despite the challenges of 2020, it was able to host the Longines Kentucky Oaks (G1) and Kentucky Derby Presented by Woodford Reserve (G1) at its flagship track in Louisville, Ky. Those races were delayed to the first weekend of September because of COVID-19 and not open to the public.

Contributing to its fourth quarter gains, late in the year CDI launched its historical horse racing facility (opened in September) and hotel (opened in October) at Oak Grove Racing Gaming and Hotel in Kentucky, which offers harness racing. In October CDI also opened Newport Racing and Gaming, an HHR facility tied to CDI-owned Turfway Park.

The company noted that its Kentucky HHR facilities are on stable ground after the Kentucky State Senate and House of Representatives approved legislation this month that clarifies their legality as pari-mutuel wagering. Gov. Andy Beshear signed that legislation into law.

Despite the challenges of 2020, investors have remained confident in CDI. Last year at this time CDI shares were trading for $156.86. The company's stock closed Wednesday at $236.67 a share, up 51%.

After trading closed Feb. 23, CDI officially announced its intention to sell the Arlington International Racecourse property, while adding that it hopes to move that license elsewhere in the state. Wednesday's closing price of $236.67 a share marked a 3.8% gain for the day.