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Churchill Warns Slots Needed "To Keep Racing Viable"

Tuesday, 12th May 2009

Churchill Downs chief executive Robert Evans warned "the company needs legislative help to keep its US racing properties viable entities," reported bloodhorse.com. After reporting a US$4.8 million net loss in the 1st quarter of 2009, Evans emphasised: "You've undoubtedly noticed our financial results are increasingly benefitted by investments in our on-line & gaming businesses. This leads some to conclude we are somehow abandoning racing. This conclusion simply ignores the fact that every single dollar spent by Churchill Downs on slot operations & on-line operations produces more purses for horsemen at CD tracks, expands the customer base to the point where we can market racing & makes CD a stronger financial entity, which enables us to make more investments & take greater risks. We aren't abandoning racing; we're rebuilding it. And given the rather precarious financial situation facing the industry, where we believe that no US racetrack earns its cost of capital, you better be in a strong financial position before you begin the renovation work." CD officials said the company "had driven its total debt down to about US$17 million by April 30 & planned to pay off another US$12-14 million by May 7" (last Thursday). Evans noted: "Rebuilding racing in the US is not going to happen overnight. There is no one silver bullet. It's not going to be without mistakes. To rebuild racing, we are going to have to change the product, change how it is presented & to whom." Evans said tracks without slots (including CD's own Churchill Downs & Arlington Park) "are currently at a competitive disadvantage against those possessing such gaming alternatives" & warned: "The solution for tracks without slots is to cut purses, to cut races & race days or to cut all 3. We've recently seen such smaller tracks as Ellis Park & Turfway Park & larger tracks such as Hollywood Park & Del Mar announce such reductions." Meanwhile CD "is progressing with its US$85 million development of a slots parlor at its Calder Race Course (in Florida) & hopes to have it open by the end of the year, or early in 2010". And Evans added he "is hopeful Kentucky legislators will address the slots issue shortly".

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