Churchill Downs Expands Reach to Virginia
In a strategic move to broaden its horizons, Churchill Downs (NASDAQ: CHDN) has set its sights on Virginia for expansion opportunities. The famous Kentucky Derby, also known as “the run for the roses,” has paved the way for Churchill Downs to explore new avenues for growth beyond its traditional borders.
The Rose: A Blooming Investment
One of the key developments in this expansion is The Rose casino hotel in Dumfries, Va. Despite being open to the general public for less than two months, The Rose has already shown promise. Stifel analyst Jeffrey Stantial, in a recent report, reaffirmed a “buy” rating on CHDN stock with a $164 price target, signaling a potential 24% upside from current levels.
Players from various neighboring areas such as Manassas, Woodbridge, and Fredericksburg, along with Washington, DC, have been drawn to The Rose. This influx of visitors bodes well for Churchill Downs as it establishes a strong foothold in the Virginia gaming market.
Optimistic Projections for The Rose
The Rose is poised to outperform expectations, with estimates suggesting monthly gross gaming revenue (GGR) could reach $15 million to $20 million. Management’s strategic marketing efforts, coupled with effective staffing optimization, are expected to drive margins higher through 2025.
Comparisons to Churchill’s Derby City property indicate that The Rose could achieve impressive earnings before interest, taxes, depreciation, and amortization (EBITDA) margins of 50%. These favorable projections position The Rose as a lucrative investment for Churchill Downs.
Competitive Edge of The Rose
Despite a growing gaming landscape in Virginia, The Rose stands out due to its unique geographic advantages. With limited competitive supply and attractive local demographics, The Rose has the potential to outshine competitors in the region. The proximity to MGM’s National Harbor, coupled with Virginia’s favorable gaming tax environment, further solidifies The Rose’s position as a top contender in the market.
As Churchill Downs continues to expand its presence in Virginia, The Rose emerges as a promising venture that could drive significant growth for the renowned gaming operator. With a strategic location, strong customer appeal, and expert projections, The Rose sets the stage for Churchill Downs’ success in the flourishing Virginia gaming industry.
