TwinSpires Helps Churchill Downs Inc. to Strong Quarter

A strong quarter of pari-mutuel wagering on horse racing as well as improved revenues from sports wagering helped Churchill Downs Inc.'s TwinSpires to a strong third quarter as the company reported positive financials Oct. 27.

For the third quarter of 2021, CDI reported $156.1 million in adjusted earnings, up 28% compared with the third quarter of 2020. That improvement was driven by record third quarter net revenue for the company of $393 million, compared with $337.8 million in the third quarter of 2020.

Those numbers are especially strong for CDI when you consider that the Kentucky Derby Presented by Woodford Reserve (G1) was contested in the third quarter of 2020, as it was moved to the first Saturday of September because of the COVID-19 pandemic. This year the Derby returned to its usual second quarter slot on the first Saturday in May, resulting in those financials being reported last quarter.

With the Derby in the third quarter in 2020, in its third quarter report CDI opted to compare TwinSpires' horse racing handle to the third quarter of 2019 rather than last year. It reported a $113.2 million increase in handle—up 30.7%. CDI attributed the increase to a shift in wagering from brick-and-mortar locations to online wagering. 

TwinSpires saw net revenue from horse racing increase $30.6 million in the third quarter of 2021 compared with the same quarter of 2019. Adjusted earnings were up 56%. While the comparison is significantly impacted by the timing of the Derby, CDI reported adjusted earnings of $20.7 million for TwinSpires in the third quarter of 2021, compared with $32.6 million for last year's third quarter.

The company continues to invest in its TwinSpires sports wagering online platform and brick and mortar locations. With increased marketing and promotional activities of TwinSpires sports wagering during the quarter, losses increased $6.2 million.

It was a busy quarter for CDI as the company announced the sale of the 326-acre Arlington International Racecourse property for $197.2 million to the Chicago Bears. Also in the quarter, CDI announced plans to open a new 43,000 square foot historical horse racing venue in downtown Louisville, Ky. Plans call for the Derby City Gaming venue to offer 500 HHR machines.

Churchill reported strong adjusted earnings from the final race meet at Arlington. The company said for the third quarter the meet drove a $5.9 million increase in adjusted earnings thanks to increased revenue from handle and admissions.

During the quarter the company's board of directors authorized a stock repurchase plan of up to $500 million. In the third quarter the company repurchased 245,132 shares of its common stock (under the 2018 Stock Repurchase Program) at a total cost of $49.2 million ($199.89 a share). The company also announced a $0.667 per share annual dividend payable to shareholders Jan. 7, 2022.