Just in time for the 143rd running of the Kentucky Derby, Churchill Downs unveiled the results of its $16 million clubhouse renovation project. The updated clubhouse features 95,000 square feet of renovated space, with 220 flat screen televisions and 180 new parimutuel wagering windows. New bars are named after past Derby winners, such as Behave Yourself, Spend a Buck, Regret and I’ll Have Another.
Churchill Downs Chief Executive Officer Bill Carstanjen said, “We are very excited for 143rd edition of the ‘Run for the Roses.’ We have focused on improving on everything we do and hope our customers appreciate and feel the difference. These improved amenities and features will be apparent to everyone who enters the clubhouse, but will be especially appreciated by the nearly 18,000 guests who utilize the restrooms, food and beverage offerings and wagering windows in this section of our facility. Our goal is to surprise our customers and exceed their expectations. I’m confident we will achieve that this year.”
In the past seven years, Churchill Downs has spent $125 million on capital improvements at its namesake racetrack. Looking ahead, the property is planning a new $37 million, 77,000 square foot tower that will add 1,800 new seats and 36 new luxury suites on the north side of the racetrack next year. “Every year, we want to be able to demonstrate to our customers that we are making the event bigger, better and more fun for everyone,” Carstanjen said.
Although Churchill Downs’ TwinSpires online betting platform has been a success, has had strong success attracting bettors to its TwinSpires online wagering platform, Carstanjen considers the Kentucky Derby the “crown jewel” of the company. “While we have benefited over a long period of time from the trend of horseplayers moving their play online from traditional brick-and-mortar outlets, we market expensively around the Kentucky Derby, the Triple Crown season, and the Breeder’s Cup, since that is when the sport acquires new fans,” Carstanjen said.
The Derby was supposed to have featured the race’s first-ever Japanese participant but due to logistics the plans did not work out.
Meanwhile, Churchill Downs reported a dip in revenue, but a rise in income for the first quarter.
The Kentucky Derby operator posted revenue of $280 million for the first quarter of 2017—a 3 percent dip from the prior year—and adjusted EBITDA of $57 million, up 23 percent.
Net income was up more than 1.5 times to $7.3 million as was diluted earnings per share of $0.44 – a 175 percent jump, according to cdcgamingreports.
The revenue drop included a $10 million decrease from Big Fish Games and a $2.4 million dip decline in the racing segment. Big Fish reported bookings revenue of $111 million for the quarter, down from $128 million in the prior year quarter. However, Big Fish EBITDA grew $11.4 million year-over-year because of new operating efficiencies and lower user acquisition costs, the report said.
A $2.4 million revenue increase in the quarter from TwinSpires was another highlight. The online racing platform TwinSpires reported a $2.4 million revenue increase for $52.3 million in revenues and $13.2 million in adjusted EBITDA. The numbers were boosted by a 20 increase in the number of active players and 7 percent growth in total handle.
“While Big Fish Games, TwinSpires and our casino segments drove positive growth, our racing segment was a headwind for us,” said Bill Carstanjen, chief executive officer in a press release.
Carstanjen said Big Fish remains a key asset in the company’s portfolio and affords significant competitive advantage.
“Our objective is not simply to chase bookings for bookings’ sake but rather to achieve sustainable profitable bookings growth,” said Carstanjen.
However, recent high-end sales of social gaming platforms have sparked interest in Big Fish as a possible growth asset for the company, the report said.
