Record Online Betting Triples Churchill Downs Q3 Profit

Churchill Downs Incorporated (CDI)‘s Q3 profit nearly tripled, thanks to an increase in online betting activity on its platform Twinspires.

Net Profit Soars Thanks to Online Betting Growth

Gambling operator CDI has reported a 10.3% year-on-year net revenue increase for the third quarter. The rescheduling of the Kentucky Derby boosted CDI’s online betting net profit per active player up 191.9%.

CDI’s net revenue jumped from $306.3 million in Q3 2019 to $337.8 million over the same period this year. Net income increased from $14.8 million to $43.2 million in 2020, while adjusted earnings went up 38.5% to 121.9%.

Revenue in the first and second quarter of 2020 dropped due to the closure of its properties. However, CDI saw its third-quarter results nearly triple. This is due to strong growth in online betting after the fans were barred from the 2020 Kentucky Derby. The event was moved from May to August as a result of Covid-19 restrictions.

Twinspires Records 40% More Players

During a conference call on Thursday, Churchill Downs highlighted record revenue of $116 million from its online betting platform Twinspires.

Excluding Derby Week, the platform attracted 40% more players and 10% more betting activity per active player in the third quarter compared with last year, the company said.

With the closing of gaming facilities during the peak of the pandemic, gaming revenue fell by 24.5% to $134.9 million.

Churchill Downs shares fell by 2.75% on Friday, to $149.15 on the NASDAQ.

2021 Kentucky Derby to Operate at 40 to 50% Capacity

The Louisville company said it does not plan to move the date for the 2021 Kentucky Derby on May 1. However CDI is expecting to limit reserved seats to about 40 to 50% of capacity. Ticket sales will be delayed until closer to the event.

If the situation improves between now and Derby Week, CDI will plan to sell more reserved seating and consider general admission tickets, CEO Bill Carstanjen said.

He added that the rescheduling of the Derby led to fewer sponsorships, less wagering and no ticket revenue.

CDI Opens New Kentucky Casinos

Since the quarter ended, CDI opened two new properties in Kentucky.

Its Newport Racing & Gaming venue, the $38.4m expansion of the Newport Shopping Center, features an historical racing gaming floor, a bar and a horseracing simulcast area.

The Oak Grove hotel-racino in Oak Grove opened on
October 15 and features 128 rooms.