By Marty Finley – Reporter, Louisville Business First Aug 1, 2019, 10:32am EDT
Louisville’s Churchill Downs Racetrack is getting a hotel after years of speculation. Churchill Downs Inc. Chief Executive Officer Bill Carstanjen said during the company’s quarterly earnings call Thursday that it has a significant construction project in the works that will add a hotel, historical race wagering facility and additional permanent, premium seating at the Louisville racetrack .
Carstanjen did not disclose any details about either the hotel or the gaming venue, but he did say the company hopes to have both operational by the 2021 Kentucky Derby. He said the facilities will be located near the first turn of the racetrack.
Carstanjen said an architect has been chosen for the project that will work on the designs and cost estimates. He said more specific details will be released during the third quarter earnings call later this year.
“When you have [a hotel], you can keep guests longer and you can attract new guests to the facility,” he said during the call.
The project will give CDI a second historical race wagering facility in the city after it opened Derby City Gaming on Churchill Downs’ former Trackside and Sports Spectrum operation at 4520 Poplar Level Road. The $62 million venue opened last year with 900 wagering machines, and the company said in April that it was adding another 100 machines. The machines are similar to slots but are based on previously run horse races.
The gaming venue at Churchill Downs Racetrack will be permitted under a current license approved by the Kentucky Horse Racing Commission, Carstanjen said. The company also plans to announce a few smaller projects later this year that will be completed at Churchill Downs Racetrack in 2020, but Carstanjen offered no details on those plans.
CDI continues to invest tens of millions into its namesake racetrack. It completed a $5 million rooftop lounge and some changes to the infield this year and announced in April that it will spend $8 million to construct a new equine medical center and quarantine facility in Louisville as part of a series of safety reforms. The move is aimed at improving the standing of horse racing amid controversy over Thoroughbred racing deaths at Santa Anita Park and other tracks.
The Louisville-based racing and gaming company said the facility will open in March 2020 on the backside of Churchill Downs Racetrack.
Prior to that, the company debuted the $37 million Starting Gate Suites and its new Paddock Gate main entrance and pedestrian plaza at Churchill Downs Racetrack ahead of the 2018 Kentucky Derby. Rivers Casino expansion in the works Carstanjen also disclosed Thursday morning that the company plans to expand Rivers Casino Des Plaines in Des Plaines, Ill., near Chicago, after it purchased a roughly 61 percent stake in the casino.
CDI shares control of the casino with Rush Street Gaming LLC, a minority owner. Rush Street remains in charge of management and daily operations. Carstanjen said the company plans to add another 800 games to the casino, taking the total number of games to about 2,000. The expansion is subject to regulatory approval and an upfront licensing fee of $24 million, he said.
The Rivers Casino expansion will require a physical expansion of the facility, but Carstanjen said CDI could add 200 to 250 machines in the existing footprint if the license is approved. Churchill’s earnings up big CDI’s Adjusted earnings per share for the quarter rose to $2.83 from $2.57 a year earlier. The company’s quarterly revenue increased 26 percent to $477.4 million while net income was up 4 percent to $107.1 million from the same period last year.
The company’s Churchill Downs segment, which includes Churchill Downs Racetrack and Derby City Gaming, reported adjusted earnings of $121.9 million compared to $107.9 million a year earlier. Revenue for the segment rose to $193.1 million from $164.3 million. Adjusted earnings for the company’s gaming segment rose to $76.1 million from $45.7 million while revenue rose to $177.8 million from $108.2 million.