Churchill Downs Incorporated is the official gaming pipeline of the Kentucky Derby and so far the 2016 season has been very good to them. Prominently known simply as CDI, the company declared a net income of $2.8 million as of April 28th. This is a 15% increase over what the company made at this point last year.
Overall growth was attributed to the acquisition of Big Fish Games, a mobile developer that CDI purchased last year, which accounted for $30.2 million in net revenue. Advance deposit wagering (ADW) at Twinspires.com also improved by $4 million thanks to an increase of new, unique players by 7%. There was also a $3.3 million increase on the racing and casino factions. CDI reported net revenue of $288.4 million over this three-month span.
Bill Castenjen, who serves as the company’s CEO, said that, the large spike in net revenue speaks “to the strength of the company, and we are pleased with the trend.” CDI also saw a 10.6% increase in para-mutuel handle at Twinspires.com which is more than triple what the national average is. Castenjen also pointed out that CDI “is hyper-focused on obtaining new users.” Growth means scale, and scale means dollars. Big dollars for one of the biggest players in the game.
The upcoming Triple Crown season will be the biggest quarter for CDI, especially with a ton of anticipation mounting with this year’s crop of competitive three-year olds. The wake of American Pharoah’s Triple Crown victory last year has created a wave of new income in thoroughbred racing that the sport and its subsidiaries must capitalize on to maintain their upward projections.
The 2016 Kentucky Derby will once again serve as the largest action generator on the U.S. thoroughbred calendar, with the Preakness Stakes and Belmont Stakes following closesely at second and third. A profitable second quarter will definitely set up CDI for more important developments down the road. As we like to say, a rising tide raises all boats, and few ships are as large as Churchill Downs Inc.