Churchill Downs has announced it will build a hotel and add gaming to its Churchill Downs Racetrack in Louisville, Kentucky, by 2021.
Churchill Downs CEO Bill Carstanjen said: “This will be a significant construction project to build a hotel with suites facing the track, more permanent premium seating and a historical racing machine facility as well as other complementary amenities. It will be located around the first turn of the racetrack. Our objective is to have these new amenities opened by the 2021 Kentucky Derby.”
The project is permitted under its existing license from the Kentucky Horse Racing Commission.
The historical racing machine facility will be in addition to Derby City gaming. The machines that will be at Churchill Downs Racetrack are permitted under the current license issued by the Kentucky Horse Racing Commission.
“We have selected the architect for the project and are in the process of finalizing the design, cost estimates and selecting a construction company,” Mr. Carstanjen explained. “When you have an amenity like a hotel, you can keep guests longer and you can attract additional guests to the facility. Derby City Gaming generated net revenue of $21m during the last three months. Derby City Gaming is making a big difference, not only at the Churchill Downs racetrack, but to the health of thoroughbred racing across Kentucky.”
The company’s net revenues for the quarter were up 26 per cent with adjusted EBITDA up 23 per cent over the last year.
“Those are meaningful increases, and there are a handful of key developments that drive the year-over-year change,” Mr. Carstanjen added.
In January, the company completed the acquisition of Presque Isle Downs & Casino, which has also provided an opportunity to launch retail BetAmerica Sportsbook at the Casino. Last week, it soft launched this in the anticipation of an August 8 Grand Opening. Churchill Downs will also launch a BetAmerica Online Sportsbook and iGaming platform across the entire Pennsylvania market later this year.
Mr. Carstanjen said he was also ‘very excited about the potential of the Illinois sports wagering market, which includes both online and mobile and the brick-and-mortar opportunity.’
“We will participate in this new market through our 61 per cent ownership of Rivers Casino, and certainly, we have the option to do so separately through our horse racing licenses. We will announce our plans soon.”
Governor Pritzker signed the Illinois Gaming Expansion Bill in late June, which among other things, gives Rivers the right to expand from 1,200 gaming positions to 2,000, and gives Arlington Park the right to install up to 1,200 gaming positions.
Rivers notified the Illinois Gaming Board last week that it intends to fulfil all 800 additional gaming positions that are allowed. This will require an upfront licensing fee of $24m payable in 2020 as well as an additional reconciliation licensing fee after three years of operations.
Mr. Carstanjen explained: “To install the full 800 positions, Rivers will need to expand the existing building footprint, construct an extension of the parking garage and invest additional capital to support the expansion.”
The Gaming Expansion Bill also authorises the creation of six new casinos in the state with Churchill expecting to participate in a bid for one of these casinos. “We’ll reveal the details in good time,” Mr. Carstanjen explained. “Our company sees opportunities for growth in Illinois, and we look forward to sharing specific plans with you when we can responsibly do so. Please stay tuned. Our casino properties are well positioned in their respective markets, and we have incremental growth already locked in for the segment, with the addition of Rivers Des Plaines, Presque Isle and Nemacolin.”
Churchill Downs now operates over 11,000 slot machines and VLTs and approximately 200 table games in eight states.