Online business drives record Churchill Downs revenues

Churchill Down has posted an 8% jump in FY revenues to $1.3bn, thanks to major contributions from its online horse betting arm TwinSpires and social games arm Big Fish Games.

Big Fish Games’ revenues jumped 18% to $486m, primarily driven by revenues from casual and mid-core free-to-play games.

However, gains here were offset by declines in social casino revenue and premium games revenue, as customers transitioned from desktop games to mobile titles.

FY16 EBITDA grew 15% to $79m. The numbers were slightly less promising in Q4, which Eilers & Krejcik described as a challenging quarter for the operator.

“On the plus side the company was able to control marketing expenses as EBITDA margins improved y/y and were above our estimates,” the analysts said.

“Moreover, management appears to be far more focused on driving long-term profitability. On the negative side, bookings were down a y/y basis for all three segments, including F2P Casual and we see no near-term catalysts to reverse this trend.”

Elsewhere, Churchill Downs’ online horseracing betting arm TwinSpires saw FY revenues jump 10% to $222m with EBITDA of $55m.

The operator said growth came from a 23% increase in active players who were acquired through marketing efforts primarily during the Triple Crown season.

TwinSpires handle grew $131.8 million, or 14%, outpacing the U.S. thoroughbred industry performance by 13%.