Pinnacle Entertainment, Inc (PNK), Ameristar Casinos, Inc. (ASCA): Check Out These Regional Casinos

More than just the Kentucky Derby

Churchill Downs, Inc. (NASDAQ:CHDN) has expanded into gaming from its namesake racetrack in Kentucky. The company now has operations in seven states and an online wagering business. Churchill Downs owns two racetracks, three casinos, three racinos, a video poker business, a poker media and brand company, and a network of off-track betting (OTB) facilities.

Churchill Downs, Inc. (NASDAQ:CHDN) continues to expand beyond its horse racing business. Currently, the company gets about 40% of its revenue from racing, 30% from gaming, and the balance from online and other businesses. The company just completed its acquisition of the Oxford Casino in Maine for $160 million. CEO Robert Evans said of the deal:

The acquisition of Oxford continues our focus on investing capital in gaming-friendly states, in newer properties, in what we believe are competitively defensible markets, and at valuations that we believe will result in significant future free cash flow generation at rates of return attractive to our shareholders.

Churchill Downs, Inc. (NASDAQ:CHDN) is also expanding seating capacity at its namesake track in Kentucky. Last year, the company sold out its new 300-seat Mansion addition at the racetrack. Those seats went for over $7,000 each at this year’s Kentucky Derby. Now the company has filed plans to add a two-story facility on two acres near the starting point and the homestretch of the race. In addition to seating, plans call for betting windows and machines, a food court, a bar, and a VIP area. This follows the company’s goal of getting more profit out of its most high profile days and weeks. EBITDA at this year’s race increased $6.5 million over last year.

Foolish assessment

Investors no longer have to go to Vegas to find a casino for their portfolio. Of the three, Churchill Downs, Inc. (NASDAQ:CHDN) is my favorite. The company is consistently profitable and has only $189 million in debt. Penn National Gaming, Inc (NASDAQ:PENN) looks to be an interesting play by breaking up into two companies. The value unlocked from the spin-off will benefit shareholders. Lastly, Pinnacle Entertainment, Inc (NYSE:PNK) is making a strategic acquisition with Ameristar Casinos, Inc. (NASDAQ:ASCA), but will need to turn its attention to paying down debt.

Once I see the company making strides in debt repayment, it will be time to make an investment for the long-term. Furthermore, the stock is up over 106% in the past year and now looks to be a good time to book some profits.

Mark Yagalla has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Check Out These Regional Casinos originally appeared on Fool.com.

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