Churchill Downs Incorporated reported its business results for the second quarter on July 27.
The second quarter, which ended on June 30, had substantial increases in net revenue, net income and adjusted EBITDA, compared to the second quarter of 2021. The company continues to thrive despite there being no legal Kentucky sports betting on sports other than horse racing.
Churchill Downs Inc. reported a record net revenue of $582.5 million in the second quarter (up from $515.1 million in 2021) and a record net income of $339.3 million, more than triple from its 2021 second-quarter total of $108.3 million. Adjusted EBITDA was $233.3 million during the second quarter of 2021. That number jumped to $291.2 million this year during the second quarter.
Churchill Downs Inc. also posted record revenue ($275.9 million) and adjusted EBITDA (up 67% from 2021) in its live and historical racing.
Churchill Down Racetrack hosted the 148th Kentucky Derby, notching a record Derby Week all-sources handle for the racetrack along with a record Derby Week Adjusted EBITDA.
Derby Delivers For Churchill Downs Inc.
The Kentucky Derby was NBC’s most-watched program since the Super Bowl in February, averaging 16 million viewers with a peak of 19 million.
Guests of the Kentucky Derby enjoyed the new Homestretch Club, an all inclusive trackside area that cost $38 million, nearly $7 million under original projections, according to CEO William Carstanjen. The Homestretch Club, which opened a week before the Kentucky Derby, added more than 3,200 premium seats.
“We were very pleased with the performance of Derby Week. Second quarter adjusted EBITDA for Churchill Downs Racetrack was up nearly $59 million compared to the prior year quarter, and up nearly $12 million compared to the second quarter of 2019,” Churchill Downs Inc. Executive Vice President and Chief Financial Officer Marcia Dall said in the company’s earnings call.
“The margins from this iconic event continue to remain very high and are unparalleled in the gaming and entertainment space.”
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Firing On All Cylinders
Net revenue for Churchill Downs Inc. further increased from an $8.5 million increase at Oak Grove Racing, Gaming and Hotel, a $4.3 million increase from Derby City Gaming, a $2.9 million increase at Newport Racing and Gaming and a $0.4 million increase at Turfway Park, the company said in its release.
Historical racing machines (HRM) marked an increase after the elimination of capacity restrictions that were in place during the second quarter of 2021.
“These HRM properties (are) so unique assets in the early growth stage of their lifecycle,” Dall said in the earnings call. “Our team has built these properties to operate very efficiently as we build the customer databases and expand and evolve the game titles and each of these HRM properties have the best mix of games that our customers want to play.”
Carstanjen added in the call: “The success of our HRM facilities reflects our ability to find and develop great opportunities, build unique entertainment offerings with innovative new products, invest capital wisely and successfully build customer demand.”
Churchill Downs Inc. also recognized a gain of $274.6 million on the sale of more than 100 acres of excess land near Calder Casino for $291 million to Link Logistics.
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