Churchill Downs Inc. Reports Strong First Quarter

With its most important weekend of the year approaching, Churchill Downs Inc. has plenty to be optimistic about based on its first quarter financial results reported after trading closed April 21.

The Louisville, Ky.-based racetrack and casino owner reported a 28% spike in its first quarter net revenue, when compared with the first quarter of 2020, to $324.3 million. That increased revenue was fueled by a strong quarter for Churchill's historical horse racing operations in Kentucky as well as a successful opening three months of 2021 for its advance-deposit wagering platform, TwinSpires.com.

CDI and Churchill Downs racetrack are preparing for the Longines Kentucky Oaks (G1) April 30 and the Kentucky Derby Presented by Woodford Reserve (G1) May 1 as those races return to their normal dates. Last year the races were contested on the first Friday of September and first Saturday of September, respectively, as the track adjusted to COVID-19 protocols.

The first quarter results suggest the company is rebounding from a challenging 2020 because of the COVID-19 pandemic.

For the first quarter of 2021, CDI reports a $35.6 million increase in net revenue from its live and historical racing in Kentucky fueled by a $19.4 million increase in revenue from Oak Grove Racing Gaming and Hotel, which opened its historical horse racing facility in September and hotel in October. CDI also saw an $11.3 million increase in revenue from its Derby City Gaming facility in Louisville, primarily due to being open all three months as compared with last year when it was forced to close in March because of the pandemic.

During the pandemic, handle on live racing has shifted to ADW platforms and TwinSpires continues to benefit from that trend. In the first quarter of 2021 its net revenues improved from $69.1 million last year to $100.1 million this year. That increase was primarily due to a $26.1 million increase from wagering on horse racing, while an additional $4.6 million was credited to sports wagering. The company said pari-mutuel handle on racing at TwinSpires was up $113.3 million.

The company also reported that its gaming segment delivered record adjusted earnings for the first quarter of $82.4 million, up 72% compared with the first three months of 2020.

The company noted that Kentucky lawmakers passed legislation in February that clarifies the legality of historical horse racing in the state. It also noted the Feb. 1 purchase of 1 million shares of CHDN stock from The Duchossois Group for $193.94 per share in a privately negotiated transaction.