Churchill Downs looking for acquisitions
Associated Press
LOUISVILLE, Ky. — Churchill Downs Inc.'s top executive has told shareholders that the gambling and racing company plans to be aggressive in seeking new acquisitions as it comes off a record-setting financial pace in 2011.
The Kentucky-based company also sees growth potential for its online wagering business, and has been encouraged by the popularity of the limited night-time racing at its namesake Churchill Downs racetrack in Louisville, said company Chairman and CEO Robert Evans.
Churchill posted record revenues and pre-tax earnings in 2011, attributing the gains to growth in its casino gambling and online horse betting. Besides its hometown track, which is home to the Kentucky Derby, the company owns and operates racetrack and gaming operations in Florida and Louisiana, a racetrack in Illinois and a casino in Mississippi.
That success in 2011 has Churchill in a position to pursue growth opportunities, Evans said at the annual shareholders meeting.
“We will continue to be very active in seeking potential acquisitions,” he said.
He gave more of a glimpse into the company's acquisition preferences later, saying: “We continue to look closely at every casino that's up for sale, as well as considering additional joint-venture opportunities. We have one of the strongest balance sheets among gaming companies, and we have the financial resources to do more deals.”
The company's gaming and online revenues have risen sharply since 2007.
Churchill is a partner in a joint venture to develop a gaming and harness racing operation in Lebanon, Ohio. Evans said construction is on pace to be completed in 2013, but the $225 million project has been tangled in litigation over the gambling operation. The plan is to install up to 2,500 video lottery terminals at the facility.
Meanwhile, Evans said the company will continue to invest in its Twinspires.com account-wagering site. Online wagering has been a growing segment of the largely sluggish thoroughbred racing industry.
Churchill Downs track is coming off a record Kentucky Derby attendance of 165,307 this year. All-sources handle for the 13 Derby Day races at Churchill totaled a record $187 million. This year's Kentucky Oaks — a race for 3-year-old fillies run at Churchill the day before the Derby — drew its second-largest crowd of 112,552 ever.
The track also has dabbled with night racing since 2009. Attendance for the 15 night racing events since that time has averaged 26,000 fans, more than three times the attendance on equivalent days, the company said.
Night racing features music and other fan-friendly offerings along with racing.
“While the broad thoroughbred racing industry may be in decline, there is still a growing, profitable market for top-flight racing combined with entertainment,” Evans said.
He also said the track will keep pushing for a change to the Kentucky Constitution to allow casino-style gambling at the state's racetracks. Churchill and other tracks say they are losing horses to states that supplement their prize money with revenues from slot machines.
Efforts to allow slot machines at Kentucky tracks have been stymied in the Kentucky General Assembly.
“We will continue to aggressively work with our political allies in Kentucky toward the goal of securing gaming for Churchill Downs racetrack,” Evans told shareholders.
Meanwhile, shareholders approved bonuses for four Churchill executives, the largest of which is up to $1.1 million for Evans. Shareholders also approved a performance-based incentive plan for top executives that could pay up to $5 million.
The company owns and operates the Churchill Downs racetrack, as well as racetrack and casino operations and a poker room in Miami Gardens, Fla.; racetrack, casino and video poker operations in New Orleans; racetrack operations in Arlington Heights, Ill.; and a casino resort in Greenville, Miss.