Churchill Downs hits revenue record of $663M just before the Kentucky Derby
Churchill Downs Inc., the company that runs Kentucky’s iconic racetrack that plays home to the Kentucky Derby, posted record first quarter revenue this year.
On the back of the success of historical racing machines and their spread across the country, Churchill Downs Inc. said its quarterly revenue increased to $663 million, roughly $20 million more compared to the same quarter last year.
First quarter revenue from historical racing machines this year rose to $24 million. There was a $17 million increase from Kentucky venues with the electronic gaming terminals, which use past races to generate results for gambling.
Churchill Downs executives did not discuss — and investors on the call did not ask about — House Bill 904, legislation passed by the Kentucky General Assembly earlier this year over the governor’s veto that raises the minimum age for sports betting in the state from 18 to 21.
The bill also legalizes, regulates and taxes fantasy betting contests for the first time under the Kentucky Horse Racing and Gaming Corporation and allows racetracks to offer fixed-odds wagers.
Churchill Downs Inc. CEO Bill Carstanjen said on the company’s first quarter earnings call Thursday, just over a week before the Derby, that the company was looking forward to the iconic race and anticipated this year’s event to outpace the previous two years in ticket sales and revenue.
Carstanjen said Derby guests will have access to renovated seating and dining areas, projects the Louisville-based company “designed to deliver strong long term returns while offering exceptional guest experience.”
In addition to capital and facility improvements at the racetrack, Carstanjen said the company was looking toward growing its Derby audience and reach.
For the past decade, the company has enlisted social media influencers to increase digital impressions across platforms in an attempt to bridge the gap between traditional horse racing fans and the more casual interested person who would want fashion and lifestyle content, too.
Next, Carstanjen said, the company might start looking for international audiences that open the door for sponsors, partnerships and additional “high-end customer participation.”
Preakness Stakes purchase
Days before the earnings call, Churchill Downs agreed to a deal to acquire the rights of the Preakness Stakes for $85 million. The Preakness is the second leg of the Triple Crown, which also includes the Belmont Stakes.
The deal includes the intellectual property, all trademarks and associated rights of the race. Churchill Downs will license the rights of the Preakness to the state of Maryland in exchange for an annual fee.
Carstanjen said the deal outlines a base fee of $3 million which will increase by 2.5% annually beginning in 2028.
The deal also included the acquisition of the Black-Eyed Susan Stakes, an industry-leading race for 3-year-old fillies the day before the Preakness.
Churchill Downs Inc. said there’s a second part of the fee, which is 2% of the handle from both race days. The Black-Eyed Susan and Preakness Stakes are typically run at Pimlico Race Course in Baltimore, but will not be held there in 2026 because the course is undergoing a $400 million redevelopment for it to host again in 2027.
Carstanjen said the company’s intention following the finalization of the deal is to work with the state of Maryland to revamp the race, the venue and the guest experience to ensure it remains a viable asset, though the state is “in control of the destiny of the Preakness.”
“I’m familiar with the history of the Preakness, and I know what it’s been in the past, and what it can be in the future,” he said. “So, we’re happy to participate and work with the state as they see fit to help build them back to their former glory.”
He said Churchill Downs Inc. has already begun conversations with the state of Maryland about economic development and tourism opportunities that pull from the company’s years of experience and success in Louisville.
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