Costs have been cut at the racino in a effort to turn a profit. (CBC)

The Charlottetown Driving Park and Entertainment Centre finished its third year of operation $900,000 in the red, figures released Thursday by the Atlantic Lottery Corporation show.

That's an improvement over the year ended April 2007, it's first full year of operation, when it lost $2.6 million. The racino opened in the summer of 2005 with the expectation it would bring $3 million to $5 million a year in profits. While it is a long way from that, provincial Treasurer Wes Sheridan described last year's results as good progress.

"To this point I'm very pleased with the way they have made the changes that are needed over there and have enjoyed the efficiencies that need to be taken account for, just to make sure that we do turn the corner on it this year," said Sheridan.

Sheridan said it can take any business three years to start turning a profit, and there are encouraging signs the racino will be in the black next year.

"We had a couple of months last year that made money for us at the CDPEC," he said.

"This year we'll see more months on that side of the ledger than on the other."

Atlantic Lotto credits the success of Texas hold 'em poker and the introduction of new slot machines with improving the financial performance of the racino.

Overall, the amount of profit Atlantic Lotto returned to P.E.I. was up $2 million last year, despite the losses at the racino and a $2-million drop in lottery ticket sales on the Island.