LOUISVILLE, Ky. (WDRB) – Churchill Downs Inc. will add 100 slot-like historical racing machines to its Derby City Gaming facility in Louisville next month, an 11 percent expansion of the gaming capacity at the off-track betting parlor.
The additional machines will hit the Derby City Gaming floor by mid-May, Churchill Downs executives told investment analysts on an earnings call Thursday.
The expansion comes after Derby City Gaming – which opened in September 2018 – produced what Churchill Downs CEO Bill Carstanjen called a “best in class” profit margin of 41 percent during the January – March quarter.
“We believe the property is a long way from maturity,” Carstanjen told analysts on the conference call.
Churchill Downs disclosed Thursday that Derby City Gaming made up more than 10 percent of the company’s $75 million in adjusted earnings before financial expenses.
Derby City Gaming contributed $7.6 million of adjusted earnings on $18.4 million in revenue during the quarter, the company said.
Churchill Downs opened the $62 million facility at 4520 Poplar Level Road last fall with 900 historical racing machines.
The machines technically offer betting on previously run horse races, but the look and function like slot machines. Casino gambling is illegal in Kentucky, but the state horse racing commission has allowed historical racing since 2010.
WDRB reported in February that public records suggest Derby City Gaming has taken business from Horseshoe Southern Indiana, the full-blown casino across the Ohio River in Elizabeth, Ind.
But Carstanjen said Thursday he thinks that Derby City Gaming is attracting new customers instead of simply diverting them from Horseshoe.
“There’s a lot to the idea that we are expanding the market and not just trying to take share from what we have across the river,” he said.
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