By David A. Mann – Reporter, Louisville Business First
Churchill Downs Inc. received approval from the Kentucky Horse Racing Commission to increase the number of historical racing machines for the opening of its new Derby City Gaming facility in Louisville.
The nearly complete 85,000-square-foot, $65 million facility is scheduled to open on Poplar Level Road in September. It will feature 900 machines, up from the 600 previously announced.
Churchill Downs Inc. requested approval for the additional machines because of widespread enthusiasm in the new venue, a news release said. The company anticipates significant consumer demand for these machines, which it believes will have a positive impact on Kentucky’s horse racing industry.
“We’re overwhelmed by the support we’ve received since announcing Derby City Gaming — it’s clear that Kentuckians are passionate about how the new HRM facility will strengthen the commonwealth’s horse racing industry,” Kevin Flanery, president of Churchill Downs Racetrack, said in the release. “Derby City Gaming will support Kentucky’s equine industry through larger purses and greater incentives for breeders and owners. That’s important because a stronger horse racing industry means a stronger Kentucky.”
Kevin Flanery, president of Churchill Downs Racetrack and senior vice president of Churchill Downs Incorporated poses for a portrait at Churchill Downs.
Derby City Gaming is expected to create a total of 450 jobs, including 250 already involved in construction and an estimated 200 new full- and part-time jobs to operate and manage the facility. The company will soon be hosting job fairs to help fill these new positions.
Derby City Gaming will house two quick-service, walk-up food venues, as well as a bar with seating for 50 and large format televisions. The facility will open with a player’s club reward center offering special perks and benefits, including an exclusive parking area for loyal guests.
Derby City Gaming is located at 4520 Poplar Level Road, which was formerly the company’s Trackside site (also known as the former Sports Spectrum.) It’s located less than half a mile from the Poplar Level Road exit off the Watterson Expressway.
The Horse Racing Commission also conditionally approved the Ainsworth Game Technology historical racing operating system and an initial group of game themes for the Derby City Gaming machines, the release said.
Historical race wagering machines are similar in look and feel to slot machines and can be designed with different styles of push-button games, Flanery said previously. The numbers generated for the games are patterned off historical horse races that already were run, and players can receive background on the races while playing — though not enough to reveal the race or the results.
Churchill Downs CEO sheds more light on $60M gaming facility, Derby's huge TV showing
Jul 27, 2017, 2:15pm EDT
Churchill Downs Inc. CEO Bill Carstanjen said Thursday that the company is finalizing the design for a $60 million historical-race wagering facility at its former Trackside training and simulcast wagering facility on Poplar Level Road in Louisville.
And he vowed it will be both “innovative” and “competitive,” teasing that it could be the start of something bigger for the company.
Last month, CDI (Nasdaq:CHDN) announced plans for the 85,000-square-foot facility, which will offer historical-racie machines — also known as instant racing — that model games on previously run horse races.
The company received conditional approval from the Kentucky Horse Racing Commission to establish historical race wagering during a meeting in Frankfort last month.
During CDI’s quarterly earnings call with investors and analysts Thursday morning, Carstanjen said the facility will initially be outfitted with 600 historical racing machines, which are similar to slot machines. If the facility proves successful, he said, the complex will be large enough to bring in more machines as needed.
One analyst asked Carstanjen whether this could be the start of multiple facilities of this type in the company’s portfolio. Although nothing else is planned now, Carstanjen said the company hopes more facilities like this one will follow.
In addition to the machines, the complex will have walk-up food venues with quick-service menus and a bar that will seat as many as 50 people alongside large televisions.
The project is expected to create 450 jobs, including 250 temporary construction jobs. The other 200 full- and part-time employees will operate and manage the facility.
Carstanjen said the goal is to have the facility open by late summer or early fall of 2018.
Bad weather but great ratings for Kentucky Derby
Miserable weather on Kentucky Oaks and Derby days in May prevented CDIfrom breaking live attendance records, but it didn’t dissuade the television viewing audience.
Carstanjen said the Derby earned its highest television audience since 1989, with a peak viewership of more than 19 million people. That was the highest Saturday afternoon television program since the NFL’s NFC divisional playoffs in early January, Carstanjen added.
And despite the bad weather, Kentucky Derby Week attendance this year was about 350,000. Last year’s Derby Week attendance was a record 376,980.
CDI sees revenues soar as Big Fish Games dips
CDI posted second-quarter record net revenue of $451.9 million, a 3 percent increase from a year earlier, and record net income of $78.3 million, a 12 percent increase from the prior year.
The company also reported record net income per share of $4.81, diluted, which was 17 percent higher than the previous year.
That came with increases in most of the company’s business segments. Racing net revenue was up about 6.6 percent, to $175.7 million, because of the boost from the Kentucky Derby. Casino revenue was up about 4.6 percent, to $88.3 million, because of a strong quarter in a few of the company’s properties.
But BIg Fish Games, the Seattle-based mobile and online video game company owned by CDI, saw a 10 percent decline in its overall net revenue, to $112.6 million.
The company said it anticipated the fall and attributed it to revenue declines for both its premium and casual free-to-play games. Social casino gaming purchases were actually up for the quarter.
Carstanjen said the company remains confident in its purchase of Big Fish Gamesand its offerings and believes it will generate a strong return on investment over time.
Marty Finley covers economic development, commercial and residential real estate, government and sports business.
Churchill Downs to spend $60M on new gaming facility in Louisville
Churchill Downs Inc. is investing about $60 million to build a historical race wagering facility in Louisville at its former Trackside training and simulcast wagering facility on Poplar Level Road.
The 85,000-square-foot facility will offer historical racing machines, also known as instant racing, that model games off previously run horse races. The announcement came after Churchill Downs (NASDAQ: CHDN) received conditional approval from the Kentucky Horse Racing Commission to establish historical race wagering during a meeting in Frankfort today.
“A state-of-the-art historic racing facility will allow us to deliver an exciting and compelling pari-mutuel product for our customers in Louisville,” Churchill Downs Racetrack president Kevin Flanery said in a news release. “This is a great opportunity for us to revitalize another area of our city while strengthening the commonwealth’s equine industry through larger purses and greater incentives for Kentucky breeders and owners. Stronger horse racing means a stronger Kentucky.”
In a phone interview following the announcement, Flanery told me Churchill Downs has been considering this option since the commission authorized historical race wagering several years ago, but it wanted to ensure it is competitive and can produce the type of facility the community will take pride in.
The facility will feature 600 historical racing machines, which are similar to slot machines, and a player’s club reward center. The reward center will offer perks for members, such as exclusive parking. And the complex will sport walk-up food venues with quick-service menus and a bar that will seat as many as 50 people alongside large televisions.
Construction of the facility will start later this year, and it is expected to open by the summer of 2018.
The project will create 450 jobs, including 250 temporary construction jobs. The other 200 full- and part-time employees will operate and manage the facility.
Churchill Downs said it will hire hourly and salaried employees in a number of designated areas, such as operations, marketing, finance, food and beverage, maintenance, information technology, human resources, security and administration. To find employees, job fairs will be held at the Trackside site and at Churchill Downs Racetrack.
Historical race wagering’s legality has been questioned at the state level for years, and a long-running court case challenging it remains pending in Franklin Circuit Court. Flanery said Churchill Downs’ general counsel has thoroughly reviewed the case and feels comfortable in moving forward on the facility.
Opponents have argued historical race wagering does not follow state regulations on gaming, but the option already has been adopted at Keenelandand The Red Mile in Lexington, Kentucky Downs in Franklin and Ellis Park Racecourse in Henderson, according to this report by the Lexington Herald-Leader. Turfway Park in Florence also has been approved for the option, the report said.
Flanery said final approval for individual machines will be required from the Kentucky Horse Racing Commission, and the racetrack will work hand-in-hand with the commission on floor layout and facility design.
This announcement comes in the midst of a very busy time for Churchill Downs. The company recently relocated its advance deposit wagering service, TwinSpires, from Mountain View, Calif., to the company’s corporate headquarters at 600 N. Hurstbourne Parkway in Louisville.
The move cost about $2.2 million for the office expansion, and it is expected to create about 100 high-paying jobs.
Likewise, a hum of activity is circulating at and around Churchill Downs Racetrack itself. The racetrack has started a $37 million three-story addition that will add 1,800 seats in luxury suites, dining areas and a third-floor grandstand. That development will be finished in time for the 2018 Kentucky Derby.
Churchill Downs also has spent more than $13 million scooping up properties around the track, some of which will be used to expand parking.