CHDN - Earnings call transcript Q3 2018 | Churchill Downs Incorporated

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Operator

Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated 2018 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time.

As a reminder, this conference call is being recorded. I’d now like to introduce your host for today’s conference, Mr. Treasury Relations. President, Vice Zangari, and Investor Nick

Nick Zangari

your at Thank XXXX After Third Good results morning, were call the quarter afternoon. XXXX to this statistical call, the to be G this our and conference including results welcome website release required located period is for the of titled Quarter open copy and prepared the released we you, presented at The business remarks, well company’s section the third Investors available other Ashley. the Company’s company’s churchilldownsincorporated.com, information about will questions. section. A Earnings of financial yesterday as Conference Regulation information Call. announcing and website’s by News, in in as

like the forward-looking some in differ cause would release our considered statements include could you cautionary Before number included today involve may that the factors started, All to actual statements statements. make filings in risks we to of the These statements in of forward-looking a I with that statements SEC. results we our uncertainties remind the should risk and with be materially. and earnings get conjunction

information Form most future today no make on report the XX-Q Any or update these as Form to we result obligation Specifically, statements new forward-looking events. and a that are and of assumptions recent on undertake based XX-K. of we as statements

Chief at Mr. measures. today’s and churchilldownsincorporated.com. GAAP website A Officer, turn During this earnings of financial release available The call, included we to release. call press over I’ll are now, Carstanjen. Form on reconciliation non-GAAP both will non-GAAP our the and press measures Executive present And to Bill XX-Q GAAP our is in

Bill Carstanjen

me today General Marcia our including Chief Officer; members morning, Brad Good our President our and Financial are Counsel. team, several Officer, and Dall, Nick. Operating Blackwell, Chief Thanks, our everyone. Bill Mudd, of With

I’ll year. adjusted over was As quarter were up up indicated we and issued to revenues prior strategic After earnings Des details We larger strong on will yesterday of on quarter. third a will we net Marcia had results at XX% comments, several EBITDA provide in into focus agreement while our a Casino X% the release, definitive least happy questions. release We your Rivers announcing XX.X% Plaines, Illinois. initiatives. our to our a finished acquire take entry with press be in our

of percentage depend by will Our with exit several choose the may along or to us venture who ownership made entire selling Clairvest who the final ownership part stake. minority is elections our on to their remain partners joint a Group,

have Park be in position competitive attractive an to a the which capital, An comparatively. cash gaming state, in free with thrilled which in sports positioned We these and participation on of if Casino the authorizes are an regional Arlington and XXXX, been pursuing and and excellent in per high will to we to engage immediately any. We for expansion we with gaming with of Illinois, market full well Generally, Heights, future invested executive partner in because in Bluhm branch resist future legislature a betting for reluctant is Illinois share, gaming. are determine to Neil Rush acquisitions the iGaming future additional think, forms our sixth market state, thus is an Illinois. most populous valued racetrack Arlington earnings nearby we and and return from we’ve believe Illinois asset our threats flow in acquisition multiples we as work to Ownership opportunity upside, as strategic Casino following. the far the company. the Majority significant ownership accretive achieving of Gaming, regard best-in-class regional are Street asset always important our Casino in aggressively this if

deeply our asset forward. this analysis Bluhm few to and be wanted reasons organization’s it was and keep that partner. one he especially organization his acumen involvement I because critical to participation We his and and and is his would the Neil ownership our for we just valued of respect noted, the business However, political going

believe next A and rate specifics, of Our three-for-one our our of we split, growth Board’s press financial consistent $XXX issued make ourselves, but which stock, growth authorization but initiatives. our program with I our is program, growing couple split. week’s our after will organic continue a practice we to new X% is tax our the the the and important stock and With of is are view We particularly the of view stock a of respect repurchase topic believe of company’s our Board appreciate addressing markets and also XXXX to finance to value Board’s sustainable paying to new release how conservatively performance. growth our free us growth our return cash dividend. the to share Meeting efficient this remarks. investors repurchase flow dividend, repurchases on we Share and to a comment million wanted our Marshall our view approval dividend in ability authorization as consistent way a long-term strongly shareholders. Board’s share an in a prospects

to the volatility our was underlying at plan potential, we’ve leverage, belief Board Given it open an the seen and the in in the stock market prudent implement this felt company’s repurchase time. our low

rewarding shareholders focus share dividend our commitment our acquisition program together, pursuing investing Taken our losing meaningful, opportunities. without on in and policy organic growth and and reaffirms repurchase appropriately consistently accretive our to

Racing week a September delayed Kentucky until We in in in opened final decision Derby long $XX with long, XXX organic late racing for their maturity state-of-the-art to encouraged property are This and any date jurisdiction, our opportunity. machine in of for and machine racing the November we license October. Louisville earlier through very machines. Louisville opened Horse with are before in for We’ve a historical associated by deployed moment. other the this and excited for been Speaking just way never results we City come. market new historical Kentucky awarding another million the mid-September. is what is racing Commission in machines learned Staying gaming we Having opportunities, that growth and

open would in and have racing with XXXX. Oak facility expect a We XXXX, hotel spend which Kentucky, amenities. a HRM located Nashville. off among upto up X,XXX awarded and will machines license the to partner, $XXX application race track a Keeneland approximately facility If just and a million to in submitted XX, We constructing Grove, in Association, we race and conditional with the racing construct the an facility hotel for miles track license, standardbred XX our from XXX-room other historical machines to is Interstate

of We update General are and last Presque processes Downs night, in received progressing from to with Erie, Pennsylvania authorities. Counsel after our Isle Farmington, complete the licensing through Luck the acquisitions & our his regulatory Lady I Casino, visit an Nemacolin Casino regulatory and Pennsylvania. in

for line right wanted quarter August expect database years. our in We execute of at move this and Ocean this and XX% EBITDA operate within that transaction addition to its of property estimate. close only swap, top Internet on New at early we offer since room period at us regulatory with best build marketing a rights the and rights iGaming entirely with and to remind of XX, Casino exchange are our pleased is New continues not adjusted remaining growth the very it XXXX. plenty and obtain Holdings. of gaming York Holdings we to the Colorado. or XX reaches York the interest Saratoga betting Internet customer final to We acquisition is maturity as Ocean grow awaiting This to we the this granted in our and Casino our Maryland has think programs. behalf approval, mid-first in we as Colorado completed timing In past On in team control, least of everyone were for exclusive we result and in equity the December a ownership this in Downs we’ve sports and been Casino before of from Downs for of to games XX% for and the table Berlin, Saratoga the We continued also Saratoga connection receiving

complete, currently and seven one have investment properties, states. Casino wholly six we owned in six With different equity the swap

well noted, we I As Lady Luck we on on as Rivers With as Presque as hope Nemacolin. will our also announcement yesterday, Downs Casino Plaines Isle well. to licensing close soon process Des the begin

we proposal. We didn’t above should learn Oak our gaming, which also include proceed Grove we month and with later this can whether Derby now have City I

stable, markets. and will strategy our reflects gaming cash believe portfolio we Our of predictable Greenfield properties investments, offer flows in diverse and acquisitions

mortar online on jurisdiction. holders, Casino may ultimately become like also to we We it believe their and grant Casino the to gaming states brick sooner legal access relevant that license

in wagering decision Following overturning the where through Court on sports sports products our and expect to to May the offer it licensed, ban we we the is wagering, jurisdictions platform U.S. in are permitted. federal we’ve Supreme added

in offer the Riverwalk, We confines the now Casino. property we are launched and have online Casino where on each of brick we locations forms Sportsbook not business will in In We at August. permitted mortar various states three in and sports. where is pursuing Mississippi, the of Harlow’s of currently wagering or sports operations Vicksburg outside but our the Casino, late

the and as build online thought very in Jersey Casino an these we In we breaking excellent solely team’s our expertise New gain and market. so us will a so, our Skins management economically wagering is to Nugget the performance stakes enter having Casino Jersey, State and of limited larger raised segment. entered iGaming before Given been to we immediately technology have market and but opportunity view to not an nicely numbers are are wagering known New on not profitable, which is We’ve opportunities. pleased they the with Agreement market location, We our We’ve Nugget, local sports of what Golden in to significant markets out New Golden by a into Jersey the released more and from the with with have numbers access as test but Mississippi physical Mississippi the reflected directly well sports in site. September been Greenville to the our do were control Vicksburg. our allow arrangement far, full own and Casino the

company employee and obtaining the process key in our gaming are licenses. of We

Casino partner sports platform Presque In addition, products. is believe suite and getting the online with Downs. wagering fourth entry their process iGaming operational of through be into In quarter license. will a in in wagering SBTech the our we will We be technology Isle sports gaming Pennsylvania, and of our

not table games. and submit to cooperatively have have yet, we worked conduct for slots closed with online to Eldorado Given we licenses

interested this a time. We are Pennsylvania pursuing not at in license in poker

for an file Isle license a have clarity will as We wagering mortar Sportsbook when is closing noting brick are that worth in very It would also we online allow Downs transaction license well Presque wagering as at interested sports available and date. the offering throughout state. on our we and that sports

wagering TwinSpires we’ve platform. SBTech As our be previously, running team responsible business discussed utilizing the for our will online

strong includes of am begin markets team States the we might with we and in TwinSpires operational expectations. products. iGaming will and Casino talent market obtain will over not an sports estimate that going sharpen or experience be wagering enough to time, Our the soon I from of market deep sizes online share outside United you give

thoughtful technology much team working been entry ourselves upside on is and access significant to and market while as practicable. partners preserve for iGaming have outsourced modest vendors for us we to cost capabilities, as for with building approach our a relatively the we’ve with Given already

you of many know, As weekend a Downs Churchill big for this is Racetrack.

is own to Breeders’ the have And year. held US event a of associated compensated back Breeders’ Cup not To championship horse generally thoroughbred excited to while international strategic the the for create days Cup financials to With the community, It hosting be still investors the certainly our XX for investors Cup for we of appropriate every comparable Kentucky owned variety material may this shareholders’ And to are our and Racetrack is two event, quarter. are for the we over that Downs to while low the our consist last Grade moves remind maintaining by done be is us and be fairly different our fourth in two for wonderful the days. who while hosted the and final will We’ve flagship of The and our racing our capital of at it is create which of Breeders’ versed and The both our activities where is a flexibility Breeders’ our team for Derby. members. different plan hope and economics dividend tracks Louisville. few in are with not beyond shareholder thoughtful some current increased businesses partner I wagering capacity our new We the excellent impact categories caution and non-profit assets. fans that TwinSpires.com, thoughts. XXXX. for fans, official well event share flow Churchill pursuing a will continue value across because of and not reinvesting in X Cup. and track opportunity We long-term races an leverage, cash stewards tracks, from growth repurchases. for opportunistic significant of our our to a opportunities to A

quarter. provide additional that to that have. you Marcia, over third like details will questions we I’d Marcia? any answer Now, the call turn Thank After to to on the some you.

Marcia Dall

good Thanks, morning, everyone. Bill, and

said, at Ocean a Gaming. opening EBITDA quarter, properties. prior or management the the As continuing million our details Overall, primarily Casino are continuing $X our on our driven and on performance revenue owned compared revenue Derby thoughts compared reported million, with net of of to results. prior of operations X% and XX% strong of quarter, continued Casino few the Downs, up was provide City $XX earnings to will million nearly pleased from third we growth consolidation by year strong the third net from year Adjusted all $XX I quarter We actions. $XXX the our nearly continued additional additional of properties quarter up Bill capital million, primarily or operations wholly from our

Turning segment to the for our quarter. Racing third

as compared $X.X was of Fair due lower prior year other to Our of the one-time revenues down Race and $XXX,XXX items. the the a Grounds of Downs. decrease the poor revenue timing franchise quarter. and million also impact Course recognition to other Racing of down was at from meet third Churchill taxes due by Arlington and number segment million quarter under maintenance ASC as driven was down well was expenses, higher adjusted XXX race from $XXX,XXX expenses, during $X.X EBITDA to weather the smaller in to $XXX,XXX

the compared couple content growth will was lower X% TwinSpires’ things helpful TwinSpires was for industry compared the offset to primarily for of TwinSpires. rate under was by by and partially the to for TwinSpires. the driven to third the for year, responsible for was are X% $XXX,XXX handle handle, which comparable of we just handle prior-year quarter. Turning be It to prior adjusted EBITDA quarter, up the in increased which growth growth a believe understand expenses. industry that up to quarter

this a believe quarter of year. slowed under the to growth shift calendar the quarter the from just growth attributable third a premium quarter. second industry First, from to in year X.X% first of X% half rate during into We is third content mainly this

had year TwinSpires we the days. drivers last, handle a year this was perspective, of the we which third producing one through there XX% the in the From to addition, In from year-over-year slowing a quarter. X% couple half than first are fewer the highest believe growth day of of weekend

we closed in of First, acquisition year. BetAmerica last April

we of the giving lift from the the this acquisition. in So year additional BetAmerica quarter are third not

rebates. larger few had defect we’ve a players or for large worn-out Second,

them glad make are when sense customers, we players not While large it to we economically. have not as do those chase does

focus content Our and Breeders’ players like the Kentucky weekends and acquiring the growing unique on is during the our Derby Cup. premium

and compared of horse and work this TwinSpires. the unique life increasing in players. customers we combine big at to Derby be in to introduce to to We opportunity will cycle Kentucky regard quarter, then Cup Saturday, season this Breeders’ year. players to the prior event the move a and Downs and of players, hosting unique Triple continue with players these racing through fans industry Racetrack iconic two the core outside the In provides both casual XX.X% to Crown third new and to Friday successful casual ultimately Churchill are brands We which

our to Casino Turning segment.

in contributed and in XX% million nearly grew $X.X EBITDA segment adjusted versus prior-year third growth quarter Casino quarter. the Our

results delivered owned Our for Ocean quarter growth. $X.X Downs wholly including million over the Casinos of

were down continued to due their gaming the quarter floor transaction. from $XXX,XXX Saratoga, investments as decrease in Miami the equity and as far Downs more the was success the Saratoga Valley as equity at by Our than the Gaming Ocean swap of expansion in interest offset the

growth the at has to wholly of the from of Downs growth Ocean expansion see XXXX. games table our from Regarding their the end continued floor the owned gaming and of quarter-over-quarter addition Casinos,

and patio the and and beginning the our nearby And addition its transaction. following of benefited a million customer end opening to closure income of the XXXX. prior-year compared gaming the the was from near hotel of Our gain from driven million Ocean lasting second net of $XX.X the floor. related by XXXX benefit smoking Downs May quarter, competitor Calder of expanded Reported $XX.X from Oxford quarter, the to in Saratoga continue Casino book retention primarily and Casino to the through up

we the As swap our the on York XX% equity closed Downs Bill August XX, of and so Casino the XXXX. interest mentioned, properties, Saratoga’s Colorado XX% in of Ocean ownership remaining New

outstanding shares related quarter, structure and swap, average of the million book in and $X.XX on quarter $XXX,XXX the growth $X.XX, reduction $X.X approximately was only or repurchases the a transaction liquidation reflecting gain weighted to million $XX.X in earnings prior-year share Ocean per of SCH net transaction. the Downs of the due XXXX. Saratoga gain of over transaction. first gain this a income the up partial of net share the to result, book recorded we recognized cash million we tax the to a As $XX.X through Diluted of a entity, of on the tax Due

was or up in growth the our the income from tax Ocean Saratoga operations, $XX.X and our the excluding recorded gain lower income net adjusted $X.X million, XX% for Our corporate continuing million reflecting the rate We’ve swap, core continuing as press in pre-opening included to well release understand our operating and better help Downs reconciliation a with as transaction other costs. results. supplemental a and schedule you

cash paid had to in through the Turning cash year result $XXX Fish a as flow. sale reduction down sale the of million Big flow the as million the gain the $XX well from quarter, a taxes of flow prior January due cash in XXXX. to the third from as on of We the of operations from

impact sales our was up the Big the through EBITDA strong of million, from the Fish, Excluding predominantly flow third of growth quarter by cash driven operations adjusted $XX year-to-date.

to Turning $X.X down capital primarily timing. maintenance in spent year, quarter, prior million capital. million third was We from $X.X which to due the on

properties. final gate. of used spent facility. on $X Gates, area, million balance complete in additional million to of work spent invoices on of be parking Regarding project the quarter project relate capital the remaining The parking approximately We primarily quarter, will related Racetrack. million will west the and We to be project Casino and for Downs investments approximately on Derby And $XX machine improvements the on pay Infield on City anticipate the project of the the Rooftop to other estimate our Starting related sending project $XX will million Colonnade Churchill Racetrack new of historical XXXX. remaining extend Derby that in the facility in The smaller the approximately City this $XX remaining quarter, which build to project, the Louisville. XX% Churchill Downs capital build-out we lot third Gaming to approximately capital the accrued fourth spending approximately capital at $XX capital building million racing on lot Gaming

Board our three briefly, approved discussed decisions. Bill capital related As

increased December and over be record of for is dividend the XXXX authorized the XXXX. First, holders a to paid of XXXX the of dividend $X.XX increase a on the dividends. in paid X, Board consecutive X, eighth This represents January XXXX, year on X.X% we’ve January it

million program. Second, repurchase authorized a $XXX share the Board

our split third, ours share of better there and a reflecting capital program to we investment dividend when approved to long-term shareholders And potential the Our and have growth alternative our company. Board not their investment. commitment repurchase in are returning do our belief stock three-for-one reflects the options,

under transparency the in Our to us expanded investments Kentucky split. stock. authorized the price as the years The Board past stock company coming significantly with years. at operations stock capacity increase and organic proportionate stock potential grown. have increase has believe, and grown the of the conjunction to our few statute, the to strategic the split gives modestly share has growth, for repurchases We also leveraged liquidity a the our We over net of and times dividends remain acquisitions, the over X.X which support shares very leverage, significant approved

as of are States. about to of is material opportunity We United Des Casino best in the Casino acquire Illinois, excited the share one the assets Plaines, the in Rivers recognized which

in Given to execute leverage, call the open our investment turn able we that, continuing call also while our can to and that make program. so the Churchill at a back and he questions. are I’ll over share Bill? low projects additional invest repurchase other strategic for properties Bill, to Downs the also Racetrack With

Bill Carstanjen

Marcia. Thanks,

Everyone, I ready questions. for your we’re think Okay.

So fire away.

Operator

Jefferies. Instructions] And line comes first of [Operator David with from Katz question the our

Your line now is open.

Erik Hellquist

Erik guys Good you How for Katz. This Hi. doing morning. David today? is Hellquist are

Bill Carstanjen

Welcome. Great.

Erik Hellquist

on announcements. Congrats the Thanks.

a things. few just I on touch want to So,

can So it Street, in as benefits the of goes, engaging whether about transaction elsewhere. talk just with you strategic as or far the Illinois some be Rush of

talk partnership? rationale the about the kind Just behind of

Bill Carstanjen

Sure. to that. I’m do happy

nail think I you the head. hitting started the by on off

Rush and of state Illinois, a a from respect legislative has of think, the Street gaming perspective. I to great and with regulatory performance understanding history a

Casino some and the maximize know also that I of record to track wagering great So see Illinois, getting Rush forward wagering, markets impressive, things outside the of their like really our with States what state and learning it’s opportunities they perspective with is gaming and United gaming couldn’t course, only for And sports both or to been think, opportunity. shape beyond. of arrangement online perspective their in on as better imagine to a and Street I the these is really, look we of state but partner the certainly them to about other the to respect

to been yesterday. So perspective we or learn in Illinois know it’s it’s arrangement them announced today with don’t better, we get their transaction them but -- just the and have been any to nice beyond announced

Erik Hellquist

-- you. think, that to Thank you gaming about company And far on goes, you that fair Right. what it’s iGaming I say more the in than seems overlooking as Can may do the gaming it space? is Internet as talk others. so constructive think Internet competitors be most

Bill Carstanjen

really always are on know these deeply into Because I thinking I’m competitors careful Well. calls tell, to what what about. not delve what I what is only about or largely they’re can see. too I doing them

markets. take focus the fashion a performance And at environment, vulcanized in analyze of by to is by ties the US Europe in on and of state has we about what influenced they each by different certainly seems market the with on one-by-one determined the then this and in markets pretty our also, are it. been we’re a performance we’ve going elsewhere states the regulatory federal market whole sure, we we our in performance we with. in terms those instead dealing influenced environment world those And to in markets products that’s our rollout point state of certainly legal business. population our TwinSpires as we how to perspective markets authorities environment as and on seen the And in wealth look it’s at with and by solution how we look state So But to markets. a US then and the pretty at that, different clear in how feel perspective

we much a try our as by what by expect, population, state they of state take start equal, much differ states of a degree not of XXX by all by but view as philosophy, as wealth. certainly, developers to regulatory So -- differ they are differ And they we with we to can analysis.

a lot on it’s of term. complex believe we But mosaic. time long So we and one of spent it’s bit a a

a in of Europe, there’s lot Just markets as seen opportunity as we’ve open.

Erik Hellquist

Great, bit one how thank Derby just up about talk opening? me. City little you question And then Can see last for the shaping you. you a since more

Bill Carstanjen

colleague, on I’m that, Mudd. offer to to my something he wants He start it. to to going floor Bill but might add the have also

out is, For about rolled way just rolled in product with. of exciting very, a and to in well maturity start performed one the yet very things a Louisville know from product that we out, a me, Greenfield the long we’re we we

competition mature the developed So it the hasn’t haven’t does not across Indiana to have Louisville because -- in a doesn’t while fully the a the there river been market, on It’s city, there happen be market, in it’s side. market.

room rolled before, there’s top product this think historical of a to So racing of out we lots the of version course, our grow and that’s line been in rolled we And jurisdiction. machines. never that’s out

our understanding customer there’s on product. explanation and of with for grow their we and base So have and a a to improvement of lot to learn development that, there’s a the lot appetite lot

and exciting machines strongly maturity. way from it did, long the product itself, is So as the out most we it that itself recognizing it a is perspective, from both market the what’s about as that my opened rolled

are pretty was I opening things the anything you about excited know better because come. the high do super I to of want to have you picture, strength So add. Bill,

Bill Mudd

lot, I Yeah. head. With you that nail a whole the on Bill, think hit the

not I XX new horse with, familiarity thing a in market the other racing historical is. a point, these opened what would to is, product The Bill’s there’s we say titles are with

and the don’t maybe bring in really think the location there diversity like the tried They’re have to customer floor. I We we the competition. have the working floor, to But of been have coming do customers back. base. we’re our We product advantage a have great vis-à-vis in educate So to product that it, our it. they on more

natural we’re this delivering more there and service or But every the to think, day. building try our this. Gulf Coast steakhouse thing more we do the have at of it, database don’t and grow Probably end, to proud And product And they games, the has long disadvantages, the the hotel. would we’re longer team the a the are table and Casino. there to day. more single customers. to way continue We this and a we maturity back. very some don’t there’s out And a on We’re come or be the I I’m to facility we going are maturity every people built have way on then have going

I be couldn’t happier thus So far.

Operator

next Morgan. question Thank the you. JP our And from line Dan Politzer of comes with

is open. line Your now

Dan Politzer

Plaines. trailing I bit the talk regional on XX.XX to could times Des for your bit some acquisition. gaming little relative a multiple of basis was premium a the little Casino, at I a hoping, recent least it’s we Rivers know, a about at a of it’s

I of going Rush to hoping, opportunities there you’re there, with could for given guess, or that are And was is apply property synergies improvements, on I manage operational So any still day-to-day, you given the them that. kind partnering Street’s now?

Bill Carstanjen

Sure.

me Let take in order. those questions

to for a us an since see one we higher a coming multiple, what here Rush as those because remarked XX it transactions, that with my won was saw us high. eye both particularly special generally, won’t think saw asset, I we’re all of were it’s times I it we the that. license years Street and it’s Suntar be. years coveted First, multiples And going think been pay or pretty gaming that going and north times with you’ve a just than pretty XX.X A is a of ever certainly careful you ago, all high saw that, comments before. Yonkers we that’s kept seen it’s and paying it we really coming and in couple the and multiple historically asset opened. general, the it This so on you they’ve those And of in over I Casino up was last do

my state, factors So we in betting, made go special time really this access think in some comments, in of I have one asset to wealthy one to a its, every it’s and without earlier price. I it’s most would iGaming few. outside in state. general important this of we’re And that, were up potential of though citing over laid was because I general, willing with out But populous thought six every those them, say for. us. citing Illinois for one a just say, special without unfettered the for and sports of particular factors a the with market to that we paying and I’d

the of you And long-term that market few asset. really location this Casino expansion from protect will to defensive of paying dynamics. what All is of really, there let in And of Chicago that than gaming. for a of property, that crown this important regional there in conclude think, with we this the see land perspective, both was and ever of are would sort elements more So us asset United us gaming was you prospective region an the States. find an instances offensive if was thought, for the the population one jewels us this typically that one it a worth can winner, where pay the we

Dan Politzer

have a -- I Well, a to follow-up. of kind follow-up question going was I

REIT. a included of both know I and transactions Suntar, and Yonkers those mentioned You

you balance forward So the you go something this as think multiple M&A or being of not kind going I is are, consider to this on, of, retail bit mean obviously kind your you line guys multiples is would ahead condition? in because and sheet relatively the environment healthy higher. have looking about hard where of is and a financing a to go we’re

Bill Carstanjen

for to understand [indiscernible] consider make to want rephrase but the Dan. it, I this don’t I mean I assets. just sure question, acquiring we a REIT would Ultimately, Would So structure

Dan Politzer

you this transactions other with kind it’s utilized. mean That’s reason two out, I wondering. I am the only Yes right. called of the Because multiple

Bill Carstanjen

of at having and the you quite your time Every in every partner looking generally acquisition in continue I reasons any to horizon, to positive period would all don’t true. can you beginning. why always this that M&A a in long assumptions that been do see in the year, around we’re be like with point sure see in I do any involved remain having I I career, us say it of my been negative, the and see assets, would that that. have -- don’t Generally, for there you of -- without But think, make to revisit what the time don’t the that. got to see being for -- always assumptions very not to from that REITS something

when our to Plaines that look up free right a to like willing get a work were we to that for When cause attention. the get that company. And When thing attractive to series assets. continue we’re is were we one in to an did, might we strategic a at think, flow in and our will for see willing when capital reason a Rivers our or rationale, when see larger our I we return Casino rules. us they from return when us We’ll that see on what’s look partnerships, of when we So there, reminder signed our strategic that will an see attention. we cash see take most a economic sure was our Des this nice fast strategic at that is, hard we and reasons for circumstances shareholder base they vary invested

but retransactions of the interest generally never you not been us, So, know. to have

never a with state. horizon You there of lots know, it’s now out on the in potentially iGaming world different

So I question an consideration. a you circumstances, made very, very never general to clear fast rules I broken I we’ll probably this say, careful are never, give after only under hard and good to is think be some answer can but that’s eye point. And that and keep at

Dan Politzer

guys shift how its Arlington, to just as how is of a how or property. fair think relative this your thinking interpret -- one in the transaction given about one, should of ownership And you last we be -- proximity it

Bill Carstanjen

our presence local advantageous that business has there in question, team change watched racing other community. question versus at is, absolute and has Illinois that’s supportive in the an this where think that, Illinois but despite the Certainly been extremely an of jurisdiction general is and racing structure Arlington because I states, fantastic of Illinois answer of suffered. the not we’ve But a no racing Park time over horse decline in fair to a time. that’s

shareholders for we of a the So work as management Churchill Downs, that’s team. job our

a to over And certainly, Illinois participate important Arlington have where what’s to market Illinois additional new those products, it time. products: in what’s long time. for have games for cetera Arlington to is to long-term we clear we certainly could term, us that presence We best sports Park Churchill was businesses. continue will have Park or Park in wagering access it over continue et evaluate over iGaming, make does thought we was for become to the and for but us in that table nor Arlington important to Downs might sure not the slots not available any of access and kind best

to in best and but keep we’ll eyes community, more focused risk want for ultimately, any take to So on our jurisdiction products what’s access we over time. our our for what’s didn’t other best shareholders that on

Operator

I Thank There not further like I back at any time. to to for remarks. would now am Carstanjen closing any you. showing Bill turn over the questions this call

Bill Carstanjen

you. you for your Thank thank time today. Everyone,

As We in management appreciate and it. in our company our your always, investment our we team. appreciate and your company confidence

return company grow our company, We a and build will do to to for of our you. generate our very best all

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Operator

may participating gentlemen, you Everyone all day. have does This disconnect. conference. and wonderful you for conclude in today’s Ladies and program, a today’s thank

Churchill Downs (CHDN) 1 Nov 182018 Q3 Earnings call transcript