Churchill Downs enjoys record 2022 as M&A activity boosts topline

Churchill DOwns
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Churchill Downs Incorporated posted several records in 2022 following a flurry of acquisitions which helped to boost its topline and spearhead future growth. 

The easing of Covid capacity restrictions helped its race track venues to flourish too, as punters returned to watch live racing on a regular basis. 

Publishing its Q4 and full-year 2022 results, Churchill Downs declared fourth-quarter revenues of $480m, which helped to boost its annual topline to a record $1.8bn, up 13% on 2021’s figures. 

Topline revenues were boosted by the company’s Peninsula Pacific Entertainment (P2E) acquisition, which provided more revenue to the racing and gaming units. The firm paid $2.75bn for P2E in a deal that closed in November. 

The gaming division was the firm’s most lucrative in 2022, contributing $761.8m, compared to $698.4m in the year prior. This was largely driven by properties acquired in the P2E acquisition and the abolition of restrictions throughout the rest of its property portfolio. 

Gaming also contributed $421.9m in EBITDA, up slightly from 2021’s $411.9m, driven by the New York and Iowa property acquisitions. 

Meanwhile, the live and historical racing unit delivered annual revenues of $646.4m, up around 50% YoY, thanks to revenue from its property in Virginia post-P2E takeover and Ellis Park and Chasers acquisition. 

The racing unit was also boosted by Churchill Downs hosting the Kentucky Derby without restrictions that were faced in 2021, which also helped EBITDA of the unit climb to $287.5m from $175.0m in 2021. 

Meanwhile, Churchill Downs’ digital unit, TwinSpires, posted annual topline revenues of $441.6m, down slightly from 2021’s $457.8m, which was due to the form exiting the online sports and casino business in Q1 as horse racing wagering declined. 

However, this exit allowed the unit’s EBITDA to grow because marketing and promotional spend was significantly cut. TwinSpires annual EBITDA stood at $114.1, compared to $82.7m in 2021. 

As well as declaring records for revenues, the firm also enjoyed record net income of $439.4m, up 76% YoY and record EBITDA of $763.6m, which was up 22% YoY. 

Net income records came despite Q4 income slashing to just $1m compared to $43.3m, which was related to transactions in relation to acquisitions made affecting comparisons.