Home > Finance > Full year results > Revenue reaches record $2.46bn at Churchill Downs in 2023

Revenue reaches record $2.46bn at Churchill Downs in 2023

| By Robert Fletcher
Churchill Downs Incorporated (CDI) posted record revenue of $2.46bn (£1.94bn/€2.27bn) in its 2023 financial year, although higher spending led to a dip in net profit.
CDI 2023

Revenue was up 36.0% year-on-year at CDI, with the operator reporting increases across all core business areas in 2023.

However, it was its live and historical racing segment where this growth was most apparent. This increase means that the division has surpassed the gaming business to become CDI’s primary source of revenue.

Live and historical racing revenue exceeds $1.00bn

Revenue from live and historical racing rocketed by 70.4% to $1.05bn, a new record for the segment. CDI put this down to Virginia properties acquired during its $2.75bn purchase of Peninsula Pacific Entertainment (P2E) in November 2022. These properties alone added $313.9m in revenue to the segment.

CDI also noted a $41.2m increase in revenue from northern Kentucky, primarily due to the opening of Turfway Park in September 2022. Another $36.4m increase was attributed to properties acquired in the Ellis Park and Chasers deals.

Another $19.2m increase came from growth at Derby City Gaming and the opening of the new Derby City Gaming Downtown in Kentucky in December. In addition, a $16.5m increase was attributed to the Oak Grove property in Southwestern Kentucky,

Gaming growth for CDI

Elsewhere, revenue from the gaming segment climbed 28.1% to $968.6m. CDI said this was helped by the New York and Iowa properties acquired in the P2E transaction, accounting for $230.0m in additional revenue. 

However, gaming growth was partially offset $16.9m drop in revenue in Pennsylvania. This, CDI says, is the result of not renewing its management agreement at Lady Luck.

Meanwhile, TwinSpires revenue edged up 2.0% to $44.9m for the year. This was driven by additional revenue from the purchase of historical horse racing provider Exacta in August. CDI also references the impact of its B2B expansion strategy for United Tote totalisator fees and growth in its retail sports betting business.

An additional $900,000 in revenue came from other activities across CDI, including Arlington International Racecourse. This revenue was 72.7% lower year-on-year.

Higher costs overshadow revenue increase

However, while revenue growth is good news for CDI, the operator also reports a rise in costs. Total operating expenses for 2023 were 27.6% higher at $1.90bn, with the highest increases being across the live and historical racing and gaming segments.

CDI also noted $2.2m in other costs, whereas in the previous year, it posted an additional $287.0m in profit. This was mainly due to gain on the sale of certain assets, something that was not apparent in 2023.

As such, pre-tax profit slipped 7.7% to $561.8m. CDI paid $144.5m in tax, leaving a net profit of $417.3m, down 5.0%. However, in terms of adjusted EBITDA, this increased 39.0% to a new annual high of $1.02bn.

Ending 2023 on a high

As for the final quarter of 2023, there was more good news for CDI. Revenue increased by 16.8% to $561.2m during the three months to 31 December 2023.

Live and historical racing revenue hiked 30.0% to $228.4m. Coincidentally, gaming revenue also totalled $228.4m, with this being 8.3% higher than the previous year. Revenue from the TwinSpires business climbed 11.9% to $104.2m but other revenue fell 71.4% to $200,000.

Operating expenses were reduced by 2.9% to $455.0m, despite higher spending across live and historical racing and gaming. Other expenses amounted to $34.3m, meaning a pre-tax profit of $71.9m, compared to a $3.1m loss in 2022.

CDI paid $14.3m, which left a net profit of $57.6m for Q4, up 5,660.0% from $1.0m in Q4 of the previous year. In addition, adjusted EBITDA increased by 21.3% to $219.1m.

Building for more growth

Alongside the results, CDI also announced details of new facilities that will open in Virginia and Kentucky.

CDI also announced details of new facilities that will open in virginia and kentucky

Phase one of The Rose Gaming Resort in Virginia has been approved and is now scheduled to open in September this year. The facility will feature 1,650 historical racing machines, as well as a hotel and food and beverage options. 

The project is expected to cost $460.0m in total, with details of phase two to be announced at a later date.

Meanwhile, CDI has set out plans to also open Owensboro Racing & Gaming in Kentucky in Q1 of 2025. The new facility will house 600 historical racing machines, a retail sportsbook, simulcast wagering and multiple food and beverage offerings.

Projected spend for the development is $100.0m. 

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