LOUISVILLE, Ky. (WDRB) – Churchill Downs plans to expand its historic racetrack on Central Avenue by enclosing the track’s first turn area with a hotel, a gaming facility offering slot-like historical racing machines and premium seating for live racing.
The Louisville-based company aims to complete the expansion by the 2021 Kentucky Derby, CEO Bill Carstanjen told analysts on the company’s quarterly earnings call.
Churchill Downs executives had floated the project publicly since November before committing to it on Thursday.
The project underscores the success of Derby City Gaming, the 10-month-old historical racing facility on Poplar Level Road where the company has about 1,000 slot-like terminals.
The gaming venue netted Churchill Downs nearly $9 million in earnings before taxes and financial expenses, on $21 million in revenue, in the April-June quarter.
“You can’t argue with a 42% (earnings) margin; it’s great,” Carstanjen said during Thursday’s call.
Churchill Downs’ license from the Kentucky Horse Racing Commission allows for up to 2,000 historical racing machines, so it could place up to 1,000 terminals at the Central Avenue track.
And the commission could approve more machines for the racetrack “if there is a market” that the company can demonstrate, Carstanjen said.
He also said he’s confident that the hotel “stands alone as an economically viable property” independent of Derby Week and the track’s Spring Meet.
Carstanjen said historical racing – which resembles slot playing but is based on horse racing math – will be a “big driver” of hotel guests during off months, and the hotel and gaming venues will be complimentary.
“When you have an amenity like a hotel you can keep guests longer and you can attract additional guests to the facility,” he said.
He added that there are other “constants” that will attract hotel guests year round, such as proximity to the University of Louisville, Louisville Muhammad Ali International Airport and to downtown.
Carstanjen said details like the project’s cost haven’t been worked out. Executives did not disclose a hotel brand.
The hotel project comes on top off $180 million in renovations and expansions to the track since 2010, including a rooftop lounge, the starting gates, a new infield gate and a large parking lot and entryway on the west side of the track.