It’s Churchill Downs, By a Mile and Third Quarter

As history shows it’s hard to keep a Churchill down. And Churchill Downs Incorporated (CDI), the host and owner of the Kentucky Derby–arguably the world’s most famous horserace—is no exception.

Cancelled from its traditional May running because of the Covid shutdown, the mile-and-a-quarter dash on dirt, dubbed “the most exciting two minutes in sports”, was moved to August and was fundamental to CDI posting record net revenue of US$337.8m (£261.5m/€289.5m) for Q3, up over 10 per cent, compared to the same period last year 2019.

CDI’s Adjusted Net Income for the quarter, ending September 30, more than doubled to US$47.8m (£37m/€41m); from US$22.3m (£17.3m/€19.1m) in Q3 last year.

The outfit’s third-quarter EBITA was US$121.9m (£94.4m/€104.4m) — up nearly 40 per cent over the same quarter in 2019.

In a company report, CDI conceded that much of this Q3 growth was driven by the rescheduled Kentucky Derby and attendant spike in online wagering. Overall, the company reported that its online betting revenue was up 39.7 per cent to $319.7m (£247.5m/€273.9m) in the tranche.

Revenue from the company’s TwinSpires advance deposit wagering operations, for example, topped an impressive US$54m (£41.8m/€46.3m), with its handle jumping nearly 70 per cent to almost US$254m (£196.6m/€217.6m) during Q3.

Income from the company’s eponymous racetrack, home of the iconic derby race for three-year-old thoroughbreds, more than doubled in the third-quarter, year-on-year, to US$68m (£52.6m/€58.3m).

But bricks-and-mortar gambling, thanks to Covid-19 drags, fell 24.5 per cent to US$134.9m (£104.4m/€115.6m) in Q3. Real world casinos across the firm’s books took hits, much like casinos everywhere in the world.

And while profit from continuing operations was US$43.1m (£33.4m/€36.9m), albeit a high but statistically misleading increase of almost 184 per cent, compared to Q3 2019, more prosaically, net revenue for the full nine months to September’s end fell by just over 26 per cent to US$775.8m (£600.61m/€664.8m).

The company is currently running a loss of US$99m (£76.6m/€84.8m) for the first nine months of the year, compared to the net income of US$133.5 (£103.3m/€114.4m) for the same period last year.

But class, as they say, is permanent. And, like the Kentucky Derby, it looks like CDI is back on track.

Churchill Downs is on the up.

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