On February 21, 2021, the Securities and Exchange Commission released a 10K for Churchill Downs, Inc. (CDI), reporting operating results for the year 2020.

During 2020, CDI opened Oak Grove historical racing facility and Oak Grove hotel.  Oak Grove is near Fort Campbell, Kentucky, just across the Tennessee border.  CDI also opened Newport Racing and Gaming in Kentucky, south of Cincinnati, Ohio.  (Although the Kentucky Supreme Court in 2020 ruled elements of historical racing gaming to be illegal, the Kentucky legislature on February 1, 2021 approved clarifying legislation and the governor signed the bill into law.)

Net revenue for 2020 was $1.054 million, down by 21% from 2019, primarily due to pandemic-caused suspension of gaming operations.  While gaming operations were idle, net revenue from online wagering on horse racing via TwinSpires soared to $405 million, up 39% from 2019. 

CDI had a net loss of $81.9 million in 2020 compared to net income of $137.5 million the previous year.  However, after adjustments, such as a tax benefit from the CARES Act, CDI had net income of $33.3 million for 2020.

Adjusted diluted earnings per share for 2020 were $0.83 in contrast to $4.43 in 2019. 

CDI identifies four business segments within its corporate umbrella:  gaming, online wagering, Churchill Downs racetrack, and all other, which includes racing operations at its remaining racetracks and United Tote.

Gaming had net revenue of $443.9 million in 2020 vs. $694.8 million in 2019.  Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for this segment was $176.7 million in 2020 and $280.9 million in 2019.

Net revenue for online wagering was $409.9 million in 2020 and $291.6 million in 2019.  Adjusted EBITDA was $109.3 million in 2020 and $66.3 million in 2019.

Net revenue for Churchill Downs racetrack was $160.5 million in 2020 and $289.4 million in 2019. Adjusted EBITDA for 2020 was $38.3 million versus $137.7 million in 2019. CDI reported that “the loss of ticket revenue, fewer sponsorships, and lower wagering during Derby week” resulted in a $121.8 million decline of revenue from 2019.

The catchall “all other” segment had net revenue in 2020 of $74.7 million and $84.2 million in 2019.  Adjusted EBITDA was negative $37.8 million in 2020 and negative $33.5 million in 2019.

CDI stock (symbol CHDN) was $137.87 per share at the start of 2020 and closed the year at $196.44, with a low of $52.90 per share coming at the outset of the COVID-19 pandemic.  At this writing in 2021, CDI stock is at $238.92 per share.

(On Wednesday, March 9, 2021, Horse Racing Business will discuss the recently announced decision by CDI to sell the land Arlington Park racetrack near Chicago occupies, particularly the ramifications for the U. S. racing and breeding enterprise.)

Horse Racing Business 2021