In just three months, Terre Haute Casino Resort has positively impacted its parent company, Churchill Downs Inc.
During CDI’s second-quarter earnings call last week, CEO Bill Carstanjen specifically mentioned the successful opening of its new resort in Indiana.
“Regarding our investment in gaming properties, we held the grand opening for our Terre Haute Casino in Indiana on April 5th, followed by its hotel on May 15th, both on time and on budget. We’ve been happy with the performance since the opening.”
The multi-state gaming and horse racing company reported record profits and handle during the three months that ended June 30, and viewership was up at the 150th running of the Kentucky Derby in May.
Terre Haute Casino built to attract customers from Indianapolis
Terre Haute Casino Resort opened in April, becoming the 12th retail casino in the state. Lawmakers are expected to consider legalizing Indiana online casinos next year. Until then, Indiana sweepstakes casinos are the only option for Hoosiers looking to play online casino games.
During the Q2 report, Carstanjen said factors contributing to the casino’s instant success included being “an appealing entertainment venue with limited competition in the surrounding market area.”
He also said the resort is “a destination for people from the Indianapolis area, particularly from the northern and western portion of the metropolitan statistical area.”
“We were really thrilled with how Terre Haute opened. … It opened quite a bit stronger than we expected. That’s a great thing. It seems to immediately been a hit with the local population. And we’ll keep working on building that database locally, and we’ll keep working and expect to see improvement over time, reaching further afield into those suburbs of Indianapolis that are 60, 70, 80 miles away down I-70.”
CDI expects Terre Haute Casino to remain profitable
CDI CFO Marcia Dall underscored Carstanjen’s remarks with some data on how the Terre Haute casino contributed to the company’s EBITDA (earnings before interest, taxes, depreciation and amortization).
“Our Terre Haute casino performed extremely well since opening on April 5th, contributing more than $19 million of adjusted EBITDA during the quarter and a 57% margin. It is important to note that we benefited from a lower initial gaming tax rate in the second quarter because of the tiered structure of Indiana’s gaming tax rates and the state’s fiscal year ending June 30th.”
Dall said the company expects the casino to remain a high-performing property.
“The gaming tax rate will normalize at the expected long-term tax rate beginning in the third quarter. Terre Haute margins will remain at the highest levels of all of our regional gaming properties, albeit lower than the second-quarter level.”
During its first three months of operation, the Terre Haute Casino’s monthly revenue was always more than $10 million.
- April: $11.6 million, 5.7% of state total
- May: $12.25 million, 5.9% of state total
- June: $11.37 million, 5.9% of state total
June’s revenue drop was in line with other casinos in the state. Nationally, casino revenue tends to drop during that month. Even so, Indiana casinos enjoyed a 4% year-over-year revenue increase in June.
CDI outlines strategy moving forward
During the presentation that accompanied the earnings report, CDI revealed its “strategic advantages” for its regional properties. They included:
- Unique brands and marketing strategies
- Menus and offerings reflect local tastes
- Promotions catered to the local customer base
- Loyal player base
- Utilizing analytics on customer behavior to optimize customer trips and casino food and beverage offerings
CDI has 10 regional gaming properties. Terre Haute sits on 48 acres and has 1,000 slot machines, 36 table games, a high-limit lounge, a retail sportsbook, and a 122-room luxury hotel.