Churchill Downs Hits Record Revenue Amid Strategic Expansions

Churchill Downs Inc. (CDI), renowned for hosting the iconic Kentucky Derby, announced a momentous financial performance for 2023, marking a year of record achievements despite facing operational challenges. With a strategic focus on expanding its historical horse racing (HHR) operations in Virginia and Kentucky, CDI saw its adjusted EBITDA earnings soar to an unprecedented $1 billion, a significant 34% increase from the previous year. This financial growth was complemented by a record net revenue of $2.5 billion, up 36% compared to 2022, solidifying CDI’s position in the gaming and betting industry.

However, the company did experience a 5% decline in net income, settling at $417 million for the year. This decrease was attributed to lower gains from property sales compared to the prior year, notably the sale of the Calder Race Course property in 2022 versus the proceeds from the sale of Arlington International Racecourse outside of Chicago.

CDI’s financial success was largely driven by the lucrative performance of its HHR machines in Kentucky and Virginia, coupled with significant contributions from casinos it operates. The acquisition of Peninsula Pacific Entertainment late in 2022, which included Colonial Downs and its off-track betting parlors in Virginia, as well as casinos in New York and Iowa, played a key role in this achievement. This expansion not only bolstered CDI’s revenue streams but also positioned the company to open new HHR venues in Kentucky and enhance live racing results, highlighted by a $20.7 million revenue boost from Kentucky Derby week operations.

Churchill Downs Hits Record Revenue Amid Strategic Expansions

Image Source: TwinSpires Racing

The company’s TwinSpires segment, encompassing account-wagering and online casino operations, also saw a modest increase in revenue, benefiting from the 2022 acquisition of Exacta Systems. This technology provider for HHR contributed to a $19.1 million gain in the online casino segment in 2023. Additionally, casino gaming revenue, excluding HHR machines, surged from $761.8 million in 2022 to $974.6 million, with significant input from the newly acquired Peninsula properties.

Looking ahead, CDI is set to further expand its footprint with the approval to build a new casino in Dumfries, Va., featuring 1,650 HHR machines and scheduled to open in September 2024. This new venture, inclusive of a parking garage and a 102-room hotel, is expected to increase live racing dates at Colonial Downs, adhering to Virginia’s regulatory requirements linking HHR machine operations to live race days.

Despite facing increased interest expenses and navigating operational shifts, such as the relocation of the Churchill Downs spring meeting due to equine safety concerns, CDI’s strategic investments and expansion efforts have laid a robust foundation for continued growth and innovation in the gaming and betting sector. With a cash reserve of $221.8 million at the year’s end and a committed strategy for future projects, Churchill Downs Inc. remains a formidable player in the industry, poised for further success in the years to come.

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Originating from Pazardzhik, Bulgaria, Neshko Manev pursued his studies in business management and game design, transitioning from Varna Free University in Bulgaria to the University of Greenwich. During his tenure at Greenwich, he concentrated on game design, with a significant focus on Virtual Reality systems. This intensive study provided him a nuanced understanding of the gaming sphere, influencing his subsequent professional path.