While the Kentucky Derby Presented by Woodford Reserve (G1) is nine days away, Churchill Downs Inc. officials also provided some good news April 28 for Northern Kentucky racing.
Speaking with investors and analysts Thursday morning, CDI CEO Bill Carstanjen said the opening of the new Turfway Park grandstand and historical horse racing venue is on schedule for Sept. 1 at the Erlanger, Ky., track. Turfway, which primarily offers winter race dates, continued to offer racing in 2020 and 2021 without fans as the old grandstand was demolished in the spring of 2020 to make way for the new construction.
Carstanjen said that the new facility will open with 850 HHR machines and will be capable of expanding to 1,200 machines if demand ramps up. He said the venue will offer a large clubhouse as well as an event center.
"This will be a very exciting entertainment venue for Northern Kentucky and the entire Tri-State area around Cincinnati," Carstanjen said.
Carstanjen noted that the project will include a revamped backstretch.
"We have also decided to invest an additional $26 million in the backstretch of Turfway Park to improve the dormitories for the track workers, add five new barns for horses, and replace or improve some of the basic infrastructure to improve the overall facility," Carstanjen said, noting that HHR gaming has made such investment possible. "The positive impact of (HHR) on the Kentucky Thoroughbred racing circuit is undeniable and this additional infrastructure is warranted to support the growing Thoroughbred operations at Turfway."
Turfway also has an off-track HHR facility tied to its license, Newport Racing & Gaming, which unveiled a 14,000-square-foot expansion in November 2021. CDI purchased Turfway Park in October 2020.
Purses at Turfway, which races from late fall to early spring, have skyrocketed in recent years. During its 2021-22 season that concluded April 2, Turfway paid $17,711,412 in purses, up 79% compared with the $9,896,500 purses paid out during racing at the 2019-20 meet.
Churchill currently has great confidence in its ability to succeed with HHR operations. In February, the company announced that it had entered into a definitive purchase agreement to acquire substantially all of the assets of Peninsula Pacific Entertainment for $2.485 billion. Those assets include HHR operations in Virginia, which Carstanjen said CDI can build on—a move he believes would also benefit racing there.
"We bring our operational expertise and our knowledge of these machines having worked with (Ainsworth Game Technology) to actually develop the machines as they exist," Carstanjen said. "We bring a lot to that process because of our deep knowledge from a technical and operational standpoint on how these machines work, how the laws may be structured; how they're regulated. We have a lot of advice and understanding that we can bring to the table that helps us and helps the state.
"With respect to those states where (HHR) is very firmly connected to live horse racing, that is the ultimate sweet spot for our company because Thoroughbred racing is at our core; it's where our company comes from," Carstanjen continued. "We have a deep history and understanding at this point on how all this works together: how the HHR fuels the racing, how it fuels capital investment, how it fuels purses, how it fuels the breeding industry. We have a very good paradigm and template for how all the pieces fit together.
"And it is a complex mosaic because horse racing is a complex business. It's breeders, it's sales, it's farms that support the horses. All of those share in (HHR) at one level or another. Harnessing all that energy and all that political support; that's something we've done now in a few places and that's probably our strongest competitive advantage when we find a circumstance like that. So we think, for example, Virginia is a very good place, optimal place for our company with our current skill sets to invest."
