Increases in gaming and racetrack sales from Churchill Downs Incorporated offset a slight decline in digital wagering in the third quarter of the year.
The headquartered business Louisville, Kentucky, which announced $411 m in additions in two of its stable earlier today, saw a 38% increase in net sales over the period to $306.3 m (2018: $221.3).
Adjusted Q3 EBITDA rose 41.7% to $88 million (2018: $62.1 million) as net income dropped significantly to $14.8 million, consisting of $15.2 million in net income from ongoing operations and $400,000 in net losses from discontinued operations.
The decrease from the previous year’s $56.3 million, consisting of $58 million in net income from continued operations and $1.7 million in net loss from discontinued operations, was mainly due to a $42.3 million after-tax non-cash gain in the third quarter of 2018 from the acquisition of the remaining 50 per cent equity interest in Ocean Downs Casino and Racetrack, in exchange for the 25 per cent equity interest in Saratoga NewYork and Saratoga Colorado properties.
With the exception of this and other problems, Q3 net income from continuing operations rose by $0.4 million, despite net losses from discontinued operations dropping by $1.3 million compared to the previous year due to lower legal expenses related to Big Fish Games.
CDI’s gaming division saw revenue rise from 61.6% to $178.6 million (2018: $110.5 million), with the company stating that revenue was powered by:
- $38.3m increase due to the acquisition of Presque Isle Downs and Casino.
- $18.6m increase due to the consolidation of Ocean Downs Casino and Racetrack, as a result of the acquisition of the remaining 37.5 per cent.
- $10m increase due to the company’s assumption of management and acquisition of certain assets of Lady Luck Casino Nemacolin.
- $2m increase at Mississippi properties due to rising attendance driven by the opening of retail BetAmerica Sportsbooks.
Adjusted segment EBITDA also increased to $71.7 million, up 60.4 percent from $44.7 million, driven by increases in equity investment in Midwest Gaming and the acquisition of Presque Isle and Lady Luck Nemacolin.
Online wagering slightly dropped to $70.4 million (2018: $72.1 million), with online sports betting and ignored net income down $100,000 as New Jersey’s sign-up bonus incentives outpaced gross revenue.
Net revenue for Q3 in the’ Churchill Downs ‘ category grew by $20.9 m due to a $20.2 m increase from Derby City Gaming as a result of continued growth and a full quarter of results, and a $700,000 increase at Churchill Downs Racetrack, primarily due to handle increases.