CDI tells investors its plans for Turfway, Arlington and Derby

Construction on Turfway Park’s grandstand and gaming facility has restarted with a target of completion in summer of 2022, Churchill Downs Inc. CEO Bill Carstanjen said on Thursday.

The news came was provided to CDI shareholders during the company’s earnings report for Q4 of 2020. The project at Turfway had been paused following the Kentucky’s supreme court ruling the historical horse racing gaming machines, which are similar to slots, were illegal in the state. However, the state legislature earlier this month passed a law that legalizes their use. 

“We anticipate spending approximately $145 million in project capital to finish building this premier facility,” Carstanjen said, adding a forecast the project will create around 800 construction jobs and 400 permanent jobs at the track.

Another project that had its construction delayed was a planned hotel and gaming facility adjacent to Churchill Downs in Louisville. That build is still on pause as CDI finalizes plans to “reimagine” some of its elements.

The call focused largely on matters away from the track, though Carstanjen did mention this week's announcement that Arlington Park will be sold. He specified CDI will be looking for a buyer who will not continue to operate the facility as a racetrack.

“We will conduct racing in 2021 at the track while moving forward with the transaction to sell this highly desirable land for other non-horse racing, mixed-use options,” Carstanjen said. “It is our intention to work constructively with state and local authorities to find a solution to continue thoroughbred operations in Illinois.”

[Related: Horsemen call Arlington closure 'a step too far']

Carstanjen’s words seemingly throw cold water on some Illinois horsemen’s plan to try and buy the track and continue to operate it for racing.

The CEO also confirmed previously known plans to try and have fans for the Kentucky Derby. Carstanjen suggested the event could operate at 40-50 percent capacity, and left the door open for even more.

“(We) may offer some amount of general admission tickets when we are a little closer to the date,” Carstanjen said. “We may adjust our ticketing plans as we see further improvement in the circumstances surrounding the pandemic.”

A major point of emphasis from Carstanjen was on strategies moving forward with the company’s TwinSpires online wagering platform, which is expanding to include sports gambling and replacing BetAmerica branding in that space.

“TwinSpires is a very profitable, high margin operation with substantial revenue and adjusted EBITDA growth,” Carstanjen said.

Before the call, CDI released its fourth quarter and full year results for 2020. The numbers showed an adjusted net income of $33.3 million, an 81 percent drop from 2019.

Revenue was also down 21 percent. CDI Executive Vice President and CFO Marcia Dall said she remains optimistic despite the negative numbers, which the company said will get better as the country moves out of the COVID pandemic.

“Our strong balance sheet, relatively low leverage and flexible capital structure proved to be a critical fortress that enabled our company to navigate the challenges that were thrown at us in 2020,” Dall said.