Churchill Downs Incorporated to Acquire Harlow's Casino Resort & Hotel

[trigger]

http://www.stockmarketsreview.com/news/37920/

[CryingForTheHorses]

Amazing how they spend money like its water and give us crap purses at Calder

[Charlie D]

Amazing how they spend money like its water and give us crap purses at Calder


Maybe the horsemen need to re-negotiate terms with CDI

[Saratoga_Mike]

Amazing how they spend money like its water and give us crap purses at Calder

I assume each track is viewed as an independent business unit by mgt - and quite rightfully so, imo.

[DeanT]

Amazing how they spend money like its water and give us crap purses at Calder

I thought the 3% takeout hike in April of 2008 was supposed to roll those purses up?

Apparently it did not quite work out as planned.

[Striker]

CDI has made consistent threats on having to close Arlington Park, especially if they cannot get slots in the near future, but can go ahead and make this investment without blinking an eye.

[Charlie D]

I thought the 3% takeout hike in April of 2008 was supposed to roll those purses up?

Apparently it did not quite work out as planned.


No surprise Dean is it???

[Saratoga_Mike]

I thought the 3% takeout hike in April of 2008 was supposed to roll those purses up?

Apparently it did not quite work out as planned.

Could you pls post CRC handle for the prior 12 months to the hike and the 12 months subsquently? You usually have that type of info. Thanks.

[Saratoga_Mike]

CDI has made consistent threats on having to close Arlington Park, especially if they cannot get slots in the near future, but can go ahead and make this investment without blinking an eye.

They're running a business, attempting to maximize shareholder value.

[DeanT]

Could you pls post CRC handle for the prior 12 months to the hike and the 12 months subsquently? You usually have that type of info. Thanks.

Calder's handle 2007 $490 Million (172 Dates)
2008 $378 Million (160 Dates)
2009 $334 Million (152 Dates)

http://cangamble.blogspot.com/2010/01/los-alamitos-handle-down-25-first-night.html

2010 down 15% according to Bloodhorse, altho with less dates. According to CDI the drop in handle this year is somewhere around average.

[Saratoga_Mike]

Calder's handle 2007 $490 Million (172 Dates)
2008 $378 Million (160 Dates)
2009 $334 Million (152 Dates)

2010 down 15% according to Bloodhorse, altho with less dates. According to CDI the drop in handle this year is somewhere around average.

Wow those numbers are horrible - could you post the total numbers for all US tracks, too?

[DeanT]

I dont know that exactly. It's somewhere.

I did find the email sent to horseplayers who were complaining about the takeout increase in early 2008 at Calder. This is one of the funniest responses I have ever seen from racing. "Prices are going up so we have to increase takeout". That means, of course, that as inflation goes up you should raise takeout. i.e. in 2045, takeout will be 122%.

Thank you for taking the time to write to us at Calder.

Due to all-around higher costs of doing business, Calder Race Course found it necessary to increase the take-out percentages this season on certain wagers (Pick 3, 4, 5). A minor increase was also applied to daily double and exacta wagers. At present, there is no increase on win, place or show wagers, nor trifectas, superfectas or Pick 6s.

We understand that a raise in prices is undesirable for customers of any product; however, with the rise of costs in the current economic climate, an increase of our take-out was deemed necessary. Please note that Calder had not raised its prices in many years.

We appreciate you being a customer and hope to continue the relationship. We also encourage you to take advantage of the Twin Spires Club, our player reward program where you earn points, prizes and privileges based on your level of play.

[Saratoga_Mike]

Dean,

Could you also explain the impact on ADWs when a track like CRC raises their takeout by 3%? Unless the ADW pays more for the signal after the takeout increase, doesn't most of the increase accrue to the ADW? Sorry for the detailed question (and if you want to move it to a different thread, I understand), but I'd like to understand the math behind these moves. Thanks.

[Robert Goren]

CDI is going where the money is. The money is in almost any form of gambling except horse racing these days. I look for them to slowly but surely get out of the horse racing business. It is the smart thing to do.

[Charlie D]

Dean posted a link to blog that had some CDI information on it. It seemed to me they love horse racing, in particular the ADW side of it.

[Saratoga_Mike]

CDI is going where the money is. The money is in almost any form of gambling except horse racing these days. I look for them to slowly but surely get out of the horse racing business. It is the smart thing to do.

Right - horse racing is in secular decline. I don't think the same is true of the casino business. CDI isn't a not-for-profit.

[Canarsie]

CDI is going where the money is. The money is in almost any form of gambling except horse racing these days. I look for them to slowly but surely get out of the horse racing business. It is the smart thing to do.

Then why did they just go out and buy youbet.

http://www.kentucky.com/2010/06/02/1289941/churchill-completely-merger-with.html

[Saratoga_Mike]

Then why did they just go out and buy youbet.

http://www.kentucky.com/2010/06/02/1289941/churchill-completely-merger-with.html

ADW biz is the one part of racing that is growing and it isn't capital intensive?

[Robert Goren]

Then why did they just go out and buy youbet.

http://www.kentucky.com/2010/06/02/1289941/churchill-completely-merger-with.html Because it "may" make money. Show me a race track where the horse racing part of the business is doing well. There may be a few, but not many. The future is not bright for even them.

[therussmeister]

Then why did they just go out and buy youbet.

http://www.kentucky.com/2010/06/02/1289941/churchill-completely-merger-with.html
Because if the US legalizes on-line poker they will bring poker to Youbet.

[ukbro00]

As a publically traded company, Churchill Downs has to act in the best interests of its stock owners, or else they will face penalties from the SEC. It doesn't really matter that they started off with only race tracks, they have to try to grow the company as best as they can.

[Trotman]

DeanT nice post, in any other business who ever was in charge of this segment of the business would have been shown the door. Further proof that Horse Racing doesn't matter to Corporate and the suits march on. :ThmbDown:

[stuball]

This has to be a sharp pain to the horsemen as CDI is positioning themselves to a point where if the horsemen strike CDI will be diversified enough to withstand the pressure..They have a number of tracks under their umbrella
but each bargains separately. If they have to shut down 1
the rest of the branches continue to operate..This was just another branch.

Stuball

[Grits]

Churchill Downs Inc. is buying its first casino without a racetrack attached, spending $138 million for a gambling hall and hotel in rural Mississippi.

The purchase, announced Monday, is the latest effort by Churchill to diversify its business beyond the horse racing that made the Louisville company famous around the world.

http://www.courier-journal.com/article/20100913/BUSINESS/309130061/Churchill+Downs+looks+to+diversify++buys+Mississip pi+casino

(scroll down for page 2 of article in Courier Journal site)

Evans said that if pari-mutuel gambling were eventually allowed in Mississippi, the company would consider an off-track betting parlor at the casino there, but doubted the company would add a track.

“That’s not on our short list of things to get done in the near term,” he said. “ … I’m not sure anybody anywhere is building new racetracks. But the OTB opportunity might prove interesting.”

We can't lower takeout or anything like that--but we're paying CASH (and maybe a little from our line of credit) for a casino in rural Mississippi, while in an article above this one (at Equidaily) another casino, Mohegan Sun is cutting 355 of its jobs due to the economic downturn.

http://www.norwichbulletin.com/carousel/x827973884/Mohegan-Sun-cuts-355-jobs

Hope this one works well for ya, Bob. Keep those shareholders and yourself on top of the world.

[Bruddah]

Living in Mississippi, I am very familiar with all of the Casinos. The one purchased by CDI is at the base of the new Mississippi River bridge in Greenville Ms. This location is in the heart of the Ms. Delta (farming region) and generally populated with very low income families. There are approximately 21 casinos in Ms. In ranking them from 1-21 on volume, the CDI casino would rank very near the bottom.

My first reaction to the purchase price was that CDI paid way too much. ($138 million :eek: ) Other Casinos with greater volume have sold recently for much less.

On the positive side, it is an entr'e to land based Casinos and within 150 miles of Oaklawn and Hot Springs Ar.. Oaklawn has been a desired property for CDI for many years. However, Charles Cella has refused to entertain any offers. Mr. Cella has recently allowed his son to manage some of the day to day activities and gain a greater control. Unfortunately, the son is more of a spoiled little rich "playboy" looking for daddy to die. I would love to be a fly on the wall and privy to some of the conversations of the CDI Board of Directors. I can almost assure you that Oaklawn is in the middle of their long range plans.

Much speculation in my reasoning, but I believe it's something to understand and consider.

[Striker]

Living in Mississippi, I am very familiar with all of the Casinos. The one purchased by CDI is at the base of the new Mississippi River bridge in Greenville Ms. This location is in the heart of the Ms. Delta (farming region) and generally populated with very low income families. There are approximately 21 casinos in Ms. In ranking them from 1-21 on volume, the CDI casino would rank very near the bottom.

My first reaction to the purchase price was that CDI paid way too much. ($138 million :eek: ) Other Casinos with greater volume have sold recently for much less.

On the positive side, it is an entr'e to land based Casinos and within 150 miles of Oaklawn and Hot Springs Ar.. Oaklawn has been a desired property for CDI for many years. However, Charles Cella has refused to entertain any offers. Mr. Cella has recently allowed his son to manage some of the day to day activities and gain a greater control. Unfortunately, the son is more of a spoiled little rich "playboy" looking for daddy to die. I would love to be a fly on the wall and privy to some of the conversations of the CDI Board of Directors. I can almost assure you that Oaklawn is in the middle of their long range plans.

Much speculation in my reasoning, but I believe it's something to understand and consider.
Excellent info Bruddah. People seem to think all casinos regardless of location are means to endless profits. This is simply not true. Some of the casinos-riverboats in northwest Indiana had to file for bankruptcy protection a few years ago and still are not operating in the black. MGM just reported 880M loss for their 2nd quarter, but that can be made up rather quickly with a company like theirs. Casinos are laying off tons of workers also. You can visit Las Vegas and tell the difference in the amount of people gambling now as opposed to the people that go there for shopping and dining. IMO besides what you are saying with possible plans to try and obtain Oaklawn, these decisions are coming from/influenced by Tim Bryant who use to work at Harrahs before being hired as President at Fairgrounds and as a Sr Vice President for CDI in April.