NEWS
Churchill to review racing operations of four tracks
Posted: Thursday, June 17, 2010 3:56 PM
CHURCHILL DOWNS
PhotosByZ.com/Thoroughbred Times
by Frank Angst
After reviewing the performance of a company increasingly reliant on added gambling and account wagering for its success, Churchill Downs Inc. President Robert Evans announced plans to review all four of its racetracks beginning next week.
The comprehensive review could result in significant changes for Churchill’s two tracks without added gambling: Churchill Downs and Arlington Park. Evans is not optimistic about the future for North American racing for reasons he outlined in a presentation at the company’s annual shareholder meeting Thursday in Louisville.
While Evans is confident that racing operations with added gambling at Calder Race Course and Fair Grounds will fare well, he expressed particular concern for Arlington, which does not have added gambling to subsidize purses or a racing weekend as big as Churchill’s Kentucky Derby (G1) weekend, though it does play host to the International Festival of Racing that includes the Arlington Million Stakes (G1) and two other Grade 1 races.
Evans said all options are on the table in terms of making Arlington more viable, from reducing dates to selling the track.
“The future of racing at any track without added gaming is going to be in question,” Evans said. “If you think it’s bad now, wait and see in a few years. Every track that does not have alternative gambling is going to be in trouble.”
At the meeting, Evans described Churchill Downs Inc. as a company that still features racing as its core business but has become increasingly reliant on its gaming and online businesses while it hopes to build its entertainment division. All four Churchill tracks realized declines in pari-mutuel revenues in 2009, with Churchill down 6%, Arlington off less than 1%, Calder down 5%, and Fair Grounds down 15%.
While the tracks’ racing operations struggled, Churchill’s TwinSpires.com enjoyed a 41% handle spike and a 38% increase in net pari-mutuel revenues to $64,316,000.
Churchill’s gaming operations now include the Calder Casino and Studz Poker Club at the Miami track and slot machines at Fair Grounds along with video poker at off-track sites. Churchill’s gaming revenues increased 22% in 2009 to $61,227,000.
Evans outlined racing’s $2.47-billion dip in pari-mutuel wagering in 2009 compared to ’07 and noted that foal crops continue to get smaller. The Jockey Club projects an 11.8% decrease in foals in 2010. With that in mind, Evans believes the tracks that will thrive will be the outlets that are able to boost purses with money from added gaming to attract entries from a shrinking pool of horses.
Evans said the company’s comprehensive review of racing operations would not necessarily lead to immediate changes.
“I’m not sure about the timeframe of any of this, but we have to be realistic,” Evans said. “Every track without alternative gaming or some other way to get money into purses is going to be in trouble. There’s no other way to survive.”
The economic downturn, according to Evans, has likely prevented more tracks from being sold for development. He said low property values have made selling tracks unattractive but if residential and commercial property values rebound, several tracks would likely be sold.
In other news from the annual meeting:
• Churchill has outperformed the S&P 500 since 2006. Churchill has maintained a cumulative performance rank of 92 while the S&P 500 is at 87. Evans said he is not pleased with Churchill’s annual performance rank this year compared to the S&P 500.
• Evans said talks continue on a television deal for the Triple Crown races. He said Churchill could announce a TV deal as early as next month on Kentucky Derby prep races. Churchill and NBC showed three Derby preps last year and Evans said Churchill would like to add more weekends in 2011.
• According to figures presented at the shareholder meeting, TwinSpires.com and Youbet.com accepted 7.1% of all North American pari-mutuel wagers in the first quarter of 2010. The two companies officially merged on June 2. Evans said Churchill’s call center for online wagering will expand by about 60 employees to about 100 by 2011.
Frank Angst is senior writer for Thoroughbred Times
READER COMMENTS
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Posted by: Bellwether, Chespeake, VA on June 19, 2010 at 09:36 AM
FOURCATS..."ITS CALLED INNOVATION"...ty...
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Posted by: FourCats, Reston, VA on June 18, 2010 at 06:11 PM
"Evans said all options are on the table in terms of making Arlington more viable, from reducing dates to selling the track."
“I’m not sure about the timeframe of any of this, but we have to be realistic,” Evans said. “Every track without alternative gaming or some other way to get money into purses is going to be in trouble. There’s no other way to survive.”
Um, how about some marketing, promotion, advertising, thinking outside the box? I can think of dozens of ideas off the top of my head (most of them inexpensive). If he can't, why doesn't he at least put a few suggestion boxes at the tracks and get some ideas from his customers. The only options this guy talks about are reducing dates, selling the track and getting alternative gambling. No wonder horse racing is in trouble. If they had tried new ideas that failed, then maybe you could somewhat justify these comments. But they've done nothing. Is there anyone competent heading any of the tracks?
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Posted by: Bellwether, Chesapeake, VA on June 18, 2010 at 02:42 AM
ps...AFTER MR. EVANS REMARKS WHO THE HELL WOULD WANT TO BUY A HORSE TRACK???...HIS REMARKS HAD TO B POINTED @ THE STATE HOUSE N KY...THIS IS ONE REASON THE GAME IS N THE SHAPE ITS N TODAY...WAY TO MUCH BS!!!...LONG LIVE THE QUEENS TOO!!!...ty...
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Posted by: Bellwether, Chesapeake, VA on June 18, 2010 at 02:16 AM
MR. EVANS IS NOT A PROMOTOR & CDI & HORSE RACE N NEEDS TO LISTEN OUTSIDE THE BOX..."THE GAME" HAS GOT TO GET "A FACE" & "A REEL PROMOTOR"("WON Oh! WON"tm)...PERIOD...LONG LIVE THE KING!!!...
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