Churchill Downs Posts Solid Q1 2107 Profits, But Questions Linger
Churchill Downs Incorporated posted solid revenues for Q1 2017 and is a company that’s definitely in the black. But despite positive news on the revenue front, the company’s still profitable social gaming division could be seeing big changes in its future.
Overall, Churchill Downs reported Q1 2017 revenue of $279.5 million. While that number is very impressive, it’s actually down 3 percent from this same time last year.
That revenue decline, however, has not necessarily had a negative impact on the company’s big picture. Adjusted earnings are sitting at $57.3 million, that’s more than 20 percent over the previous year.
Despite the cavalcade of good news, there is one area that is causing a bit of concern in the Churchill Downs ecosystem, social gaming.
Churchill Downs’ social gaming division, Big Fish Games, posted revenue of $112 million for the first quarter of the fiscal year. That’s actually down about eight percent over this same period last year.
In an earnings call to investors, as reported on by CalvinAyre.com, company CEO Bill Carstanjen placed some of the blame for Big Fish Games’ revenue decline on increased competition and the expense of acquiring new customers.
Carstanjen also pointed out that his competitors in the social gaming space have been having similar difficulties. When asked if Big Fish Games might be put on the auction block in the near future like Double Down Casino was recently, Carstanjen demurred and praise his competitors for their successes.
Churchill Downs did experience a slight dip in revenue from horse racing, but that’s generally been blamed on factors beyond the company’s control, such as a shift in event scheduling and an outbreak of equine disease that greatly impacted race lineups.
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