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 creating nearly 100 Louisville HQ jobs by end of year
Ten years later, Twinspires has come back home to Kentucky.
Louisville-based Churchill Downs Inc. (Nasdaq: CHDN) has completed the relocation of the advance deposit wagering service from Mountain View, Calif., to the company’s corporate headquarters at 600 N. Hurstbourne Parkway in Louisville.
With the move, about 70 high-paying jobs already have been filled, and CDI has spent $2.2 million to outfit an additional 15,000 square feet in the building, which is in the University of Louisville’s ShelbyHurst Office and Research Park. The company now has 50,000 square feet in the building as its anchor tenant and is expected to create another 25 Twinspires jobs in Louisville by year’s end. The jobs pay $75,000 to $110,000.
With the relocation, Twinspires now has 208 employees in Kentucky, including 140 or so in leased office space in Lexington. Churchill Downs CEO Bill Carstanjen said those jobs will remain in Lexington to keep a strong presence in the state’s two largest cities.
Not surprisingly, the bulk of the jobs are new hires, as only six to eight of Twinspires’ California employees made the move to Kentucky, according to Twinspires officials.
The Twinspires relocation was first announced during an earnings call by Carstanjen last August, and he said Tuesday that the move has been a year in the making.
But the idea got its start in 2014, when company officials started discussing the long-term future of the wagering platform. Carstanjen and other CDI officials conceptualized and founded Twinspires with five employees in Louisville in 2007. At the time, Carstanjen was the company’s executive vice president, general counsel and chief development officer.
Carstanjen said the company was moved to California shortly after its was founded to take advantage of the talent pool and IT experience in Silicon Valley, saying he did not have confidence that Kentucky had the tech talent a decade ago to meet the company’s needs. Last year, $1.1 billion in total handle, or 10 percent of total U.S. wagering on horse racing, came through Twinspires.
But a lot can change in 10 years. Carstanjen said Louisville’s economic development activity has helped created a larger and more robust tech environment in Louisville. And he believes the local tech scene is flexible enough now to help Twinspires stay competitive.
Kentucky Gov. Matt Bevin praised the move, saying it is a trademark example of the type of jobs he wants to come to Kentucky as he works to establish the state as an advanced manufacturing and engineering hub.
Bevin also said it is fitting that an old and storied company such as Churchill Downs is investing in high-tech jobs and a sleek, modern office in Louisville’s East End.
The governor said he will look back and measure success for his administration when governors of other states are scratching their heads and wondering why their residents are moving to Kentucky for job opportunities.
Mary Ellen Wiederwohl, chief of Louisville Forward, Louisville Metro Government’s economic development arm, also praised Churchill Downs for its expansion. She said the city’s business services division is the fastest growing sector for Metro Government and has long-term potential to create jobs that will attract this type of talent from across the country.
Carstanjen said the decision was nothing but “positive energy” and that California’s cost of living and more expensive tax structure were not major factors in the relocation.
But Bevin said the money that will be earned through these jobs will have more purchasing power for its employees to buy larger houses and invest in the city’s vibrant arts and entertainment scene.
“That’s good for Louisville, and it’s good for Kentucky,” he said.
During the news conference, Bevin was asked about the possibility of expanded gaming in Kentucky, particularly casino gambling. Bevin said there is “no political will” for casino gambling by the Kentucky General Assembly, noting that it would take legislative action to legalize such a concept.
Bevin, a Republican, noted that his predecessor, Democrat Steve Beshear, made casino gambling a significant goal for his administration but was unsuccessful in a friendlier legislative environment. Today, the GOP controls both houses of the state legislature.
Carstanjen and CDI long have supported expanded gaming in Kentucky, but he told me after the news conference that the company doesn’t waste its time dwelling on what’s not available. He said a lack of casino gaming in Kentucky has not slowed the company’s ability to harvest all the possibilities available to it here.
“If you worry about what you can’t change, it will drive you crazy,” he told me.
Today, CDI has grown to include several horse-racing tracks and casinos as part of its portfolio. The company also owns totalizator company United Tote Inc. and Seattle-based video game company Big Fish Games.
Nationwide, CDI has about 4,000 employees, 676 of whom are based in Kentucky, either at the corporate office, Churchill Downs Racetrack, Twinspires or United Tote. The company’s East End headquarters has 200 or more of those employees.
When asked, Carstanjen said it us unlikely any of Big Fish Games’ roughly 600 employees will join Twinspires in Louisville. The company was founded and cultivated in Seattle, its executive team has long called Seattle home, and it is a decidedly West Coast company.
The company also has a larger mass of employees in a city where game development talent is widespread.
“If it ain’t broke, don’t fix it,” Carstanjen said.
Marty Finley covers economic development, commercial and residential real estate, government and sports business.
Renovations, William Walker highlight Spring Meet opening at Churchill Downs
After a busy winter at Churchill Downs, track President Kevin Flanery took a few minutes Friday morning to watch some of the horses expected to start in next Saturday’s 143rd Kentucky Derby put in their workouts.
When the 38-day Spring Meet gets underway at 6 p.m. on Saturday, April 29, the track throws open the doors on its latest renovation work, a $16 million project to modernize the second floor of the Clubhouse. The area, which includes a completely upgraded facility with many creature comforts, typically can hold about 13,000 patrons.
But racing fans are likely to spot many other improvements throughout the plant, such as more ATMs and additional trashcans to toss those losing mutuel tickets. In the Clubhouse renovation alone, where foot traffic patterns were streamlined, the restroom capacity was more than doubled, along with the installation of more than 220 flat-screen TVs and upgraded food and beverage service.
“We are focusing on the guest experience,” Flanery said. “It is really amazing what our team does each year.”
With the usual large crowd expected on opening night, Saturday gives Churchill Downs a chance for a shakedown run to work out the kinks ahead of Derby Week, which begins Tuesday, leading up to next Friday’s 143rd Kentucky Oaks for 3-year-old fillies, followed by the Derby on Saturday, when the nation’s attention focuses on the historic Central Avenue plant.
Part of the opening night festivities will include the second annual teaming with Louisville’s Fund for the Arts to showcase some 150 local artists with 20 live arts performances around the track. A portion of the proceeds Saturday will benefit the Fund for the Arts.
But Churchill Downs is built for horse racing, and fans will have an 11-race program to watch.
The feature event is the $100,000 third running of the William Walker Purse for 3-year-olds, which attracted a field of seven, headed by the Todd Pletcher-trained Syndergaard. The New York-bred colt – racing in the colors of Eric Fein, Christopher McKenna, Harris Fein, Guri Singh and Jerry Walia – drew the rail and will be ridden by his regular jockey, John Velazquez.
Syndergaard, the horse and not the Mets’ pitcher (Noah Syndergaard), is making his first start this year after finishing fifth in the Grade I Breeders’ Cup Juvenile last November at Santa Anita. As a 2-year-old, he was nosed out in the Champagne Stakes at Belmont by Practical Joke, after winning his first two starts at Saratoga. He is the 4-5 morning line favorite.
Drawing toward the outside in post position 6 is Conquest Wildcat, a 5-1 shot trained by Randy Morse with Corey Lanerie appointed to ride. The Florida-bred, who won his maiden at Churchill Downs last May, finished second the last time out two weeks ago in the Bachelor at Oaklawn Park.
Not to be overlooked is locally based En Hanse, also at 5-1, who’ll have Julien Leparoux aboard. The colt, owned by Kendall Hansen and Bode Miller and trained by Mike Maker, won here last fall and scored some strong results at Turfway Park before finishing ninth in the Grade III Spiral Stakes on March 25.
After opening night, Churchill takes two days off, before three days of day racing with a 12:45 p.m. post time.
Renovations are making the Kentucky Derby even more posh
KENTUCKY DERBY | Gov. Bevin A Fan of Churchill Downs Renovations
05/06/2017 02:59 PM
Churchill Downs recently completed its renovation of some parts of its legendary Clubhouse.
And Kentucky Governor Matt Bevin is a fan.
“It’s stunning. It’s beautiful,” said Gov. Matt Bevin. “It’s a first-class institution. It’s a first-class company. And the way in which they have continued every year to make this event even better and better for the guests that come is spectacular.”
There are so many new aspects to the Clubhouse, including new bars and lounges, but one thing stands out to Gov. Bevin.
“Just the way they’ve widened some of the hallways where people can move through,” said Gov. Bevin. “It’s just made it a lot more open and airy and accessible.”
Renovated Churchill Downs clubhouse draws bustling crowd, high praise on Oaks Day
May 5, 2017, 1:52pm EDT
Louisville-based Churchill Downs Inc. dropped $16 million this year to upgrade the second-floor clubhouse at its namesake Louisville racetrack.
The project wrapped up just a few weeks before Derby week, and it served as a warm shelter for hundreds of people escaping the rain, wind and sudden cold snap of weather that hit the Kentucky Oaks this morning.
As I previously reported, Churchill Downs has modernized about 95,000 square feet in the clubhouse to improve circulation and service. During larger events, the clubhouse typically hosts thousands of guests.
The project includes updated televisions, several bars named after past Derby winners and more points of sale and larger walkways to reduce wait times and long lines.
I took a walk around the clubhouse before noon today and found the wagering booths, bars and concession stands had heavy traffic, but the wider hallways and the numerous pay options kept the lines lean and manageable.
I also spoke to several people — grizzled Oaks and Derby veterans and first-timers alike — who were pleased with the service and quality of the products they received and were enamored with the new artwork on the walls, including a splashy mural that shows Derby jockeys, trainers and owners and immediately catches your eye.
Kenny and Lenae Kavanaugh of Jeffersonville are frequent visitors to the Kentucky Oaks and said they felt much more comfortable in the clubhouse with the wider layout and ease of service that has cut the lines.
Kenny Kavanaugh said people were almost on top of one another in the old clubhouse layout, which cheapened the experience, forced them to wait longer to buy food or drinks or place bets and made it harder to get from the clubhouse to their seats for the next race.
“Kudos to Churchill Downs for this investment,” and listening to their customers, Kenny Kavanaugh said.
Dawn Paden and George Heilman have been coming to the Derby for decades. The couple met seven years ago at the 2010 Kentucky Derby and are involved in Thoroughbred training back home in Mountain Home, Ark.
They stop into the clubhouse when they come to town, and Heilman said the renovation is a definite improvement on the old layout and should make life easier for those who use its services.
With rain and wind hitting the track hard today, Heilman expected many would look to the clubhouse for warmth and accommodations.
“It’s going to be a real test,” he said. As the day chugged along, the clubhouse filled with more people and lines did get longer.
From a broader standpoint, Heilman did express some reservations with the direction CDI has taken with its capital improvements, saying he feels the company is focusing more on luxury areas inside the track and, in the process, making the experience harder to afford for those with modest incomes.
Charles and Jennifer Ansaroff, a Boca Raton, Fla., couple, were taking in the experience inside the clubhouse’s new Aristides Lounge, named after the winner of the first Kentucky Derby.
The lounge is in a corner of the clubhouse that previously was used for storage and temporary event space during the Derby and other special events. Now, it has table seating for about 300 guests, 27 flat-screen televisions and a full-service bar. During my visit earlier today, a large crowd had filed into the lounge, where a large food spread was arranged and a band was playing.
The lounge also includes graphics honoring Aristides and his jockey, Oliver Lewis, as well as mosaic wallpaper created from vintage wagering tickets.
Charles Ansaroff in particular paid attention to what he called an old-school feel in a “prestigious” event setting.
“This place is amazing,” Ansaroff said.
Kevin Flanery, president of Churchill Downs Racetrack, has said the clubhouse redesign is a re-imagining of Churchill Downs’ vaunted history, paying respects to the past while modernizing for the future.
Scott and Lisa Cochran, a couple from Atlanta who recently moved to Fort Knox, Ky., on an Army assignment, were snapping pictures of one another in front of one of the clubhouse murals after upgrading their tickets from the infield.
“We want the entire (Derby) experience,” Scott Cochran said.
Marty Finley covers economic development, commercial and residential real estate, government and sports business.
Here's who was hanging out at the Turf Club at Churchill Downs on Derby Day
The Turf Club is one of the most exclusive spots at Churchill Downs Racetrack outside of the Mansion, and it is never short on celebrities and other high-profile guests on Derby day.
Photographer Ron Bath and I took a tour of the Turf Club in the early afternoon Saturday and were immediately inundated with famous faces, such as country music stars Kix Brooks and Eddie Montgomery of Montgomery Gentry.
We also ran into multiple sports stars, including recently retired Major League Baseball slugger David Ortiz, who has become a Boston icon for his storied tenure with the Boston Red Sox, and NFL great Jerry Rice, who dazzled audiences with his quick feet and smooth hands while playing for the San Francisco 49ers.
Ortiz is featured in our gallery. Unfortunately, Rice was moving quickly (no surprise for a hall-of-fame wide receiver) and made it to the off-limits Turf terrace before we could grab him for a photo.
Dolvett Quince, a personal trainer on “The Biggest Loser” and grand marshal of the Pegasus Parade, was gracious enough to chat with us and even recorded a video greeting for my wife, who is a big fan.
To see our full line-up of Turf Club names we ran into, check out our gallery above.
Churchill Downs Unveiling Upgrades For Derby
Sneak peek inside $16M upgrade at Churchill Downs Clubhouse
The long-stagnant, second-level Clubhouse area at Churchill Downs has undergone a $16 million transformation that has turned a large and somewhat shabby space into vibrant, welcoming quarters.
A few final touches remain, such as hanging some artwork, but the revamped sector at the top of the escalators just off Gate 17 will be open to all track-goers starting for simulcast wagering Wednesday, April 5, and then for the track’s spring racing season that leaves the gate April 29, said Ryan Jordan, Churchill Downs Racetrack’s general manager.
“We have a lot more amenities,” Jordan said during an unveiling of the facilities Tuesday morning. “We have doubled the number of restrooms, increased the number of wagering locations and added significantly more concession stations.”
“We have reconfigured the food court area with wider aisles for better circulation and flow. So we should have shorter lines, and people should get their food much, much quicker.”
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Much of the work is cosmetic – and has greatly spiffed up the premises. Wood-like vinyl flooring has been put down in much of the space and tile flooring installed in other areas. Walls have been redone in a combination of mostly neutral colors – including earth tones, greens and white.
The architect on the renovation was R2 Architects of New Jersey, and the chief contractor was Calhoun Construction of Louisville. The track paid for the project out of its own revenues, with no government aid, Jordan said, and work began last November.
The modernization has encompassed most of the 95,000-square-foot Clubhouse area and was designed to improve the track experience for the roughly 13,000 guests that typically enter the space on Oaks or Derby Day, track officials said.
Other updates include:
- The Aristides Lounge – formerly an unfinished space that was occasionally used for select events (including the Kentucky Derby Post Position Draw), “is now a permanent fixture, outfitted with table seating for nearly 300 guests, 27 flat-screen TVs and a full-service bar.”
- The Loft at Aristides Lounge – above the Aristides Lounge and accessed by a new staircase and elevator, designed to offer intimate dining with table seating for more than 300 guests, 38 flat-screen TVs and full-service bar.
- Champions Bar and Gold Room – an area exclusive to VIP bettors and horsemen, features seating for more than 240 guests and almost 100 TVs. The Champions Bar features 38 bar seats, 114 table seats and 46 TVs. “The Gold Room is a Las Vegas sports book-style area with 49 flat-screen TVs, 48 carrel seats, 28 table seats and 13 countertop seats, each outfitted with new Bet Pro betting machines,” the track said.
- The Champions Bar and Gold Room Balcony – offers a view of the Paddock area and has covered table seating for approximately 130 people.
In addition, the track has upgraded food and beverage items in an improved concession area that now has nine themed stations and 25 points of sale. Jordan said the food preparation area has also undergone upgrades, with new equipment added to speed up service.
Several new bars have been developed – appropriately named after Derby winners: the Spend a Buck Bar, the I’ll Have Another Bar, the Behave Yourself Bar and the Regret Bar.
A nice break for track visitors: there will be no immediate increase in concession prices, Jordan said.
The project has included more than 60 staffed pari-mutuel wagering windows, 40 self-serve betting machines – and a more than doubling of both the men’s and women’s restrooms fixtures.
Meanwhile, with upgrades seemingly unending, the track broke ground in January on a $37 million suites tower near Turn 4. The foundation for the tower is in, with work temporarily halted but due to resume after this year’s Derby. The tower suites should be ready for Derby 2018, Jordan said.
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Churchill announced plans for the $37 million project last November. The so-called Starting Gates suites project will encompass approximately 60,000 square feet of new commercial space on the north end of Churchill Downs Racetrack’s 147-acre facility along Central Avenue.
The steel structure, which will feature three floors of individual suites, along with dining and event space, is adjacent to the Jockey Club suites, which opened in 2003. It will host 1,140 ticket guests and boasts 36 new individual suites that can accommodate groups of various sizes, track officials said previously.
Track officials have committed approximately $125 million to major capital improvements over the last eight years.
Reporter Sheldon S. Shafer can be reached at 502-582-7089, or at firstname.lastname@example.org.
SNEAK PEEK: Churchill Downs shows off $16 million in new clubhouse improvements (PHOTOS)
Apr 4, 2017, 1:14pm EDT
With only a month standing between now and the Kentucky Derby, Churchill Downs Racetrack is showing off its new upscale offerings.
Racetrack president Kevin Flanery and general manager Ryan Jordan gave local media a tour of the track’s $16 million enhancements to its second-floor clubhouse. The clubhouse sits between the paddock and the racetrack itself, offering wagering booths, food and beverage services, bars and restroom facilities.
With the upgrades, Churchill Downs has modernized about 95,000 square feet in the clubhouse to improve circulation and service. During larger events, the clubhouse typically hosts 13,000 or more guests.
The project included the addition of more than 220 flat-screen televisions, which replaced outdated analog versions. The clubhouse also has new food and beverage options, including multiple themed stations that offer about 25 new points of sale.
Flanery said the former configuration was set up as a food court with only a few points of sale, which led to long lines that disrupted the flow of the clubhouse. The new setup also removes the need to stand in separate lines for food and alcohol, he said.
“Lines are lines,” Flanery said. “People want to be out on the track.”
Jordan pointed out that the hallways in the clubhouse have doubled in width to improve walkability and flow, and Churchill Downs has created several small bars named after past Kentucky Derby winners.
That includes the Behave Yourself Bar, the I’ll Have Another Bar, the Spend a Buck Bar and what Flanery called the appropriately titled Regret Bar.
With the upgrades, Churchill Downs has also added more than 180 new pari-mutuel wagering windows, self-serve betting machines and other wagering equipment. It also more than doubled the number of restroom stalls inside the clubhouse, to 133.
And the clubhouse has new lounge and event amenities, including The Aristides Lounge, named after the first Kentucky Derby winner.
The lounge is in space that previously was used for storage and as temporary event space during the Derby and other special events. Now, it has table seating for about 300 guests, 27 flat-screen televisions and a full-service bar.
The lounge also includes graphics honoring Aristides and its jockey, Oliver Lewis, as well as mosaic wallpaper created from vintage wagering tickets.
Flanery said the clubhouse redesign is a re-imagining of Churchill Downs’ vaunted history, paying respects to the past while modernizing for the future. For instance, a pari-mutual wagering machine used in the early 1900s is on display, and Churchill Downs is adding murals honoring winning jockeys, graphics honoring past Derby and Oaks winners and a wall of fame.
Above the Aristides Lounge is The Loft at Aristides Lounge, a new event space for VIP guests that can seat about 300 or more guests for intimate dining and events. The lounge has more than three dozen flat-screen televisions and a full-service bar. A staircase has been built to access the Loft.
Also, racetrack officials have expanded the Champions Bar and Gold Room, a sweeping sports bar concept and wagering area for VIP bettors and horsemen that seats more than 240 and has nearly 100 televisions in multiple rooms.
Flanery said the space was designed for those who follow horse racing religiously and want to keep up with races at other tracks year-round.
To add to this amenity, Churchill Downs has added a balcony outside of the Champions Bar and Gold Room that includes an awning and seating for about 130 people overlooking the Paddock, where a new video board has been installed.
With these enhancements, the track and its parent company, Louisville-based Churchill Downs Inc. (NASDAQ: CHDN), have invested about $125 million toward major capital improvements at the racetrack in the last seven years and nearly $250 million since the massive Clubhouse and Grandstand renovation in 2005.
Looking ahead, the racetrack has broken ground on a $37 million three-story addition that will add 1,800 seats in luxury suites, dining areas and a third-floor grandstand.
The 77,250-square-foot Starting Gate Suites will be at the north end of the racetrack, next to the Jockey Club Suites. The project will add as many as 36 luxury suites with indoor lounge seating and a private tiered balcony. Each of the three levels in the addition will have event space with dining tables.
That project will be ready in time for the 2018 Kentucky Derby.