Churchill Downs online growth boosts Q3 figures
Operator spent $1m to launch real-money gaming site Luckity.com " exchange platform in development.
Churchill Downs Incorporated’s (CDI) online business posted a year-on-year increase in net revenues of 9% during the third quarter ending 30 September, but investment in egaming, including the development of an exchange wagering platform, saw EBITDA fall by US$0.8m, the company has announced.
The Kentucky-based racetrack operator posted overall revenues of US$164.9m for the period, a 1% decline from the same period last year, leading to a second highest all-time third-quarter EBITDA of $21.3m.
The 9% improvement in online income, which includes pari-mutual betting website Twinspires.com, saw revenues reach $45.6m. Twinspires.com, the largest online horseracing business in the US ahead of the likes of Betfair TVG, also reported an increase in total amount of bets taken of 10.6% compared to 2.2% growth of total thoroughbred industry wagering for the same period, according to Equibase.com.
However, costs associated with the launch of Luckity.com, CDI’s new real-money gaming site, contributed to Q3 online EBITDA declining by $0.8m. Other expenditure related to the company’s development of an exchange wagering platform, further details of which have yet to be revealed.
CDI’s online division “ formed last month and headed up by newly-appointed president Ted Gay “ launched Luckity.com last week at a total cost of $1m. The site features 24 games which place players in betting pools and allows them to select specific or random horse numbers. Winners are determined by the results of global horse races, a system which CDI claims is legal due to federal law allowing interstate gambling on horse races.
eGR revealed in July that the operator was sharpening its online focus, having applied to become an online poker operator in Nevada and commenced talks with potential software partners including Playtech and Ongame. Gay told eGR that the company was “spending lots of time focusing on poker and egaming”.
Elsewhere in its Q3 results, CDI saw racing operations revenues decline by 6%, or $3.9m, due to three fewer racing days at Churchill Downs Racetrack and weather-related cancellations at Calder Race Course.
Gaming revenues decreased $2.4m, or 5%, during the quarter largely due to continued competition in the South Florida market and the closure of the company’s casino and video poker operations in New Orleans for five days in September as the result of Hurricane Isaac.
CDI chairman and CEO Robert Evans said Q3 was an important period of investment in “growth opportunities” for the company, including the online space.
“We hope to see the revenue and EBITDA growth impact of these new opportunities starting in the fourth quarter of this year, and into 2013 and 2014, including our decision to proceed with construction of our joint venture casino project near Lebanon, Ohio; the completion of the acquisition of Riverwalk Casino Hotel; the launch of the real-money gaming site, Luckity.com; and significant progress on the $15m renovation and rebuilding of Harlow’s following the 2011 Mississippi River flood which we expect to complete by year-end,” Evans added.