Churchill Downs‘ third-quarter cash flow results were “softer than expected” according to J.P. Morgan analyst Daniel Politzer, who added the “the impact of this was likely mitigated by the company 
announcing a slew of updates/capital projects which helped placate investors, especially those with a longer-term focus.” These include a 300-room hotel at the company’s eponymous racetrack and two ‘historical racing’ facilities, one at Turfway Park in Kentucky. Politzer ratcheted down his estimate for CHDN’s online wagering by 16%, to $63 million “but believe there could still be near-term earnings volatility relating to CHDN’s launching of its sports betting/iGaming business, as well as at TwinSpires, which is still seeing competition for high-volume/low margin players. Higher salaries and benefits (as well as property taxes) also led to the miss.
Increased competition in Maine contributed to Churchill Downs being a bit off its feed, reporting revenues of $306 million vs. an anticipated $309 million. Higher-than-expected racetrack promotional expenses also contributed to the result. The revenue miss in Maine was chalked up to the impact of Encore Boston Harbor, which is demonstrating quite a long reach.
Churchill Downs, meanwhile, is lobbying furiously against the bipartisan Horseracing Integrity Act. It would put an end to blood doping (banned in the Olympic Games but okey-dokey in the sport of kings). 
Since Bluegrass State Sen. Mitch McConnell (R) has the ultimate say on what bills get voted upon in the Senate, odds against the Act are long. (McConnell claims not have a position on the bill.) So far the bill has a formidable 191 co-sponsors in the House of Representatives. Of CHDN’s opposition, pro-Act lobbyist Shawn Smeallie said, “They are more of a casino and gambling company and anything that may remotely smell of additional costs or regulation, they are not interested in.”
At present, horse owners have to comply with 38 different sets of state regulations but a scandal at Santa Anita, where horse after horse had to be put, has put wind in the sails of reformers. Since injury-related deaths of U.S. racehorses are 2.5 times those in the rest of the world, S&G endorses the Horseracing Integrity Act.
* Houston magnate Jim “Mattress Mack” McIngvale found himself out $13 million when the dust from the World Series settled. He doesn’t regret his hefty wagers on the Houston Astros, telling CNN, “My heart is broken, because I’m an Astros [fan]. I don’t bet with my wallet, I bet with my heart and the city’s heart is broken,” he said, getting a tad maudlin. We haven’t heard of any Astros fans having to be talked off the ledge after their team blew a 3-2 series lead. The big winner is Scarlet Pearl Casino in Biloxi, which scored a ton of free publicity for taking McIngvale’s action when no other casino would.
Unlike a certain other Texas millionaire, McIngvale is known for his charitable good works, opening his stores to displaced hurricane victims. “He’s an unbelievable philanthropic person, he’s just a decent human being,” Scarlet Pearl CEO LuAnn Pappas told CNN. “When you’re in the gambling business, you’re thinking with your head, but in this case our heart came into play because he’s such a wonderful human being and a humanitarian.” As for backing the Astros with his wallet as well as his heart, McIngvale says he’d do it again “in a New York minute … God knows what I’m going to do next, but it’s going to be fun for the customers, that’s the whole idea.” Indeed. Mattress Mack has made fans of us and we’re looking forward to see what big bet he places next.
* First the bad news for Las Vegas Sands. Weak VIP revenue in Macao spelled a 2% decline in winnings. Now the good news. Ailing CEO Sheldon Adelson made his first conference-call appearance in a long time. Adelson is battling leukemia and we wish him a full recovery.
* There aren’t many casino-related initiatives on election ballots tomorrow. A big one is Proposition DD in Colorado, which would legalize sports betting. We support it, in principle anyway.
* Former casino regulator Richard Schuetz has a lengthy piece out today, ripping a new one for Chris Christie, former American Gaming Association prexy Geoff Freeman and low casino tax rates (not to mention Nevada‘s abysmal schools). Agree or disagree, I’m sure you’ll find it must-see reading.
* Sen. Kamala Harris (D) comes to Las Vegas for a town hall on Friday, the guest of the Culinary Union, the latest presidential candidate to seek union endorsement in Sin City. I wonder if anyone will ask her why she was against legalized marijuana before she was for it.
* Advance tickets are on sale for Kelly Clarkson at Planet Hollywood. To beat the rush, used pre-sale code QoPnQ6WA.
