Churchill Downs' recently opened Rose casino hotel in Dumfries, Virginia shows promising early performance despite being open for less than two months. Stifel analyst Jeffrey Stantial maintains a "buy" rating with a $164 price target, suggesting a 24% upside potential.

The property has successfully attracted players from key markets including Manassas, Woodbridge, Fredericksburg, and Washington, DC, where it competes with MGM's National Harbor.

Early Performance Indicators:

• Expected monthly gross gaming revenue (GGR) of $15-20 million
• Potential for 50% EBITDA margins, comparable to Derby City property
• Strong marketing initiatives across TV, social media, radio, and billboards
• Better-than-expected employee retention rates

Competitive Advantages:

• Limited competition within 60-minute drive radius
• MGM National Harbor is the only major competitor
• Lower gaming taxes in Virginia compared to neighboring regions
• Favorable local demographics
• Unlikely competition from Fairfax County

The Rose casino, alongside Churchill's Kentucky venues, represents a significant growth driver for the operator. Current performance indicators suggest the venue could exceed the $15-16 million monthly GGR projected for the company's live and historical horseracing venues in Virginia.

Management is currently focused on database building and staffing optimization, with margins expected to improve gradually through 2025 as operations stabilize and mature.

Related Articles

Previous Articles