Churchill Downs record results fine, but more work ahead

Thursday, July 25, 2024 3:52 PM
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  • Rege Behe, CDC Gaming

After record quarterly results, it would be natural for Churchill Downs CEO Bill Carstanjen to take a victory lap.

Churchill Downs Wednesday reported revenue of $890.7 million and EBITDA of $444.8 million, both records, for 2Q24.

“We are demonstrating that we can deliver strong returns on the strategic choices and capital investments we make, and we remain focused on executing our-long term strategies to deliver best-in-class growth for years to come,” Carstanjen said Thursday during an investor’s call.

But Carstanjen’s comment was followed by an outline of the work and projects that still need to be done by the Kentucky-based gaming company.

  • For Churchill Downs Racetrack, this year’s unveiling of a redesigned paddock area will be followed with a renovation of the grandstand area, with 10,000 seats that are viewed as “lower-end hospitality” being replaced with 8,300 “premium hospitality” seats. The capital investment project comes with a price tag of $85 million, with a payback of less than eight years.
  • There also will be an expansion of Churchill Downs’ historical racing machine facilities, with a new venue expected to open in Owensboro, Kentucky, in the first quarter of 2025. A new HHR venue is expected to open in Dumfries, Virginia, in late September 2024. And another HHR project, in conjunction with IGT in Malta with 2023 National Lottery PLC, was announced in early July.
  • The acquisition of Exacta Systems in 2023 has allowed Churchill Downs to provide technology to third party HHR facilities in Kentucky, New Hampshire, and Wyoming. “We are also in the process of converting approximately 10 percent of our gaming ports in Kentucky to Exacta technology to improve our top line and product offering over the long term,” Carstanjen said.

The recent opening of Terre Haute Casino Resort in Indiana also was successful. “Terre Haute Casino provides an appealing entertainment venue with limited competition in the surrounding market area,” Carstanjen said.

“The second quarter was great for us,” Carstanjen said. “With all-time record results, we have a strong pipeline of additional investments, and potential acquisitions that we are evaluating to position our company for future growth. We have one of the best balance sheets in the industry, great assets that we believe will continue to drive us. We remain committed to delivering superior returns for our shareholders with consistent execution of our growth strategy. Our track record shows we can deliver.”

Rege Behe is lead contributor to CDC Gaming. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.