Sometimes money doesn’t buy you happiness”¦just ask blues singing Tom Meeker, president of Churchill Downs, Inc. (CHDN), who now must explain his company’s poor quarter.
Meeker and others reached down deep to support gambling initiatives in California and Florida where the voters were expected to decide whether racetracks should have slot machines.
But, before the California referendum could even face voters, it was withdrawn by a coalition of racetracks and card clubs who proposed that if the state’s Indian casinos didn’t agree to pay 25% of their revenues to the state, they would forfeit the exclusivity provision in the law relative to slot machines.
Despite the millions of dollars spent on advertising in support of the proposition, it became obvious to the sponsors that the law change being proposed had no chance of passing.
As for the Florida measure, it was still unknown, based on surveys, whether the state’s voters would permit citizens in Miami-Dade and Broward counties decide whether to permit their racetracks to have slot machines.
In warnings that Churchill Downs would lose about $3.9 million in the fiscal quarter that ended on Sept. 30, Meeker moaned that the political campaigns in California and Florida had been more costly than expected.
While making earlier forecasts, the company had indicated it would show a $5 million profit for the three-month period.
Also, in an adjustment of its books, Churchill Downs said it was reducing the value of Ellis Park in Henderson, Ky., the second such move in two years.
The company will report its fiscal experience for the quarter next week but meanwhile it said it has revised its outlook for the year. Earnings are expected to be between $1.44 and $1.53 per share, down from the previous $1.70 per share.