Churchill Downs Inc. Diversifying Business Beyond Horse Racing
Churchill Downs Inc. is "moving to protect its equine roots by moving beyond those roots," according to a front-page piece by Gregory Hall of the Louisville COURIER-JOURNAL. The company last year for the first time "got more profit -- 53 percent -- from online wagering and casino gambling than horse racing." CDI, which "once owned as many as seven racetracks," now has four. And CDI President & CEO Bob Evans said that it is "possible that number could shrink." Evans noted that the tracks that make the cut "likely will have something beyond the routine day-in and day-out racing." Hall notes Churchill Downs racetrack "has the Kentucky Derby and Oaks, and the company's tracks in New Orleans and Florida have casino-style gambling." Evans "calls Arlington Park in Chicago 'the most exposed' of the company's tracks." He "chafes at any suggestion" that CDI's addition of an online wagering business and purchase of a stand-alone casino "compromise the company's commitment to horse racing." He said that diversification "has allowed his company to weather the recession even as the racing industry as a whole has declined." Annual betting on U.S. racing since '05 has declined 21.5%. In that same period, CDI's own revenues have risen 64%. And in the past five years, the company's stock "has risen more than 9 percent." Evans said that CDI's proceeds from the Oaks and Derby are "likely enough to sustain it, and represent 'a big chunk' of the company's racing earnings." But Evans conceded that "even Churchill could see fewer racing days eventually" (Louisville COURIER-JOURNAL, 5/1).