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.