Churchill Downs to sell Arlington Racecourse in Illinois

Churchill Downs Incorporated (CDI) has begun the process to sell the Arlington International Racecourse in Arlington Heights in the state of Illinois.

Once the site has been sold the new owner is expected to redevelop the Illinois-based racetrack.

Plans to sell the racetrack

According to the announcement, CDI expects the sale of the 326 acre Illinois site to bring redevelopment opportunities to the market. 

The site will be marketed to potential developers by the real estate business Coldwell Banker Richard Ellis (CBRE).

Despite announcing plans to sell the property, CDI said it is committed to running Arlington’s 2021 racing calendar which is scheduled to run until 25 September 2021. CDI said that it does not expect the deal to be finalised by this date and it does not expect the sale of the venue to impact the racing schedule in any other way.

Speaking on the sale of the site, Bill Carstanjen, CEO of CDI, said: “Arlington’s ideal location in Chicago’s northwest suburbs, together with direct access to downtown Chicago via an on-site Metra rail station, presents a unique redevelopment opportunity. We expect to see robust interest in the site and look forward to working with potential buyers, in collaboration with the Village of Arlington Heights, to transition this storied location to its next phase.

“In the meantime, we are very committed to pursuing the relocation of Arlington’s racing license to another community in the Chicagoland area or elsewhere in the state. We are exploring potential options with the State and other constituents and remain optimistic that we can find solutions that work for the State, local communities and the thousands of Illinoisans who make their living directly or indirectly from thoroughbred horse racing. 

“We are committed to the Illinois thoroughbred racing industry and will consider all options in working toward opportunities for it to continue into the future.”

CDI’s latest figures

In addition to revealing the sale of its Illinois venue, earlier this week CDI published its 2020 revenue figures.

According to the figures, CDI made a loss of $81.9m in 2020 as revenue slipped 207% to $1.05bn.  

The operator’s online TwinSpires product bought in $403.4m which was up by 40.7% year-on-year. Nearly all of this came from its online horse racing betting product while its online sports betting and casino brand generated $4.3m.

The land-based Churchill Downs venue brought in $142.8m  representing a 48% drop. The racetrack accounted for $63.3m of this while the Derby City racino accounted for $79.5m.

CDI’s other venues were the largest revenue source for the company bringing in $441.4m, however, this was down 36.6% year-on-year. 

The operator’s venue, The Fair Grounds in Louisiana brought in $97.6m of this total, while Presque Isle in Maine brought in $75.2m and Ocean Downs in Maryland $60.2m.

All of CDI’s land-based venues saw a year-on-year drop in revenue. The operator also generated $61.5m from other sources.

Operating expenses totaled $993.8m which was down by 10.8%. Of the total operating costs, $360.4m came from non-Churchill Downs sites, $273.3m were from online products and $141.9m were related to Churchill Downs itself. Administrative, selling and general expenses made up an additional $114.8m.

This left CDI with $60.2m in operating profit which was down 72.1%. After interest costs of $80, and $27.7m in income from other businesses in which CDI holds a controlling stake, the operator was left with $8m in pre-tax profit. After a $5.3m tax benefit, CDI had a post-tax profit of $13.3m.

Carstanjen said: “Against the backdrop of the COVID-19 global pandemic, we managed our business efficiently and responsibly, and with that discipline, we have maintained a strong company. We are moving forward in 2021 with a relentless focus on strategic and organic growth opportunities that will enable us to continue to deliver a strong return on investment to our investors.”