stockrowWhat it does
Churchill Downs Incorporated operates horse racing, wagering and gaming businesses. It is headquartered in Louisville, Kentucky, and William C. Carstanjen is its chief executive officer. Its operations include Churchill Downs Racetrack, home of the Kentucky Derby, historical racing venues, regional casinos and online wagering services.
Historical racing venues offer machines on which customers wager on previously run races. The company also operates live racing venues, where customers can attend races and place bets, and casinos offering games such as slots and table games. Food, drinks, hotel rooms and event services accompany gaming at many properties.
Through TwinSpires, the company accepts online and telephone horse racing wagers from customers with funded accounts in permitted states. It also supplies wagering technology and operational services to other businesses. United Tote provides systems that accumulate wagers, calculate payouts and display wagering information; Exacta supplies technology for historical racing machines.
Churchill Downs organizes its businesses into Live and Historical Racing, Wagering Services and Solutions, and Gaming. It plans to sell nine wholly owned regional gaming properties and focus its strategy on the racetrack and Derby, historical racing machines and TwinSpires. The company expects to announce executed transactions for those properties by the end of 2026.
How it makes money
In FY2025, Churchill Downs reported net revenue of $2.9 billion; in Q3 2026, it reported net revenue of $696 million.
Live and Historical Racing earns commissions primarily from pari-mutuel wagering on live and historical races. In pari-mutuel wagering, bets are pooled and payouts are calculated from the pool. The segment also earns simulcast fees from other wagering sites and revenue from admissions, personal seat licenses, sponsorships, television rights, food and beverages. Personal seat licenses include multiyear arrangements for some racetrack seating.
Gaming earns revenue from casino activities including slot machines, table games, video lottery terminals and video poker. Its properties also sell food, beverages and hotel services and earn commissions from pari-mutuel wagering. The proposed sale of regional gaming properties would change the company’s portfolio; the sales have not yet been announced as executed transactions.
Wagering Services and Solutions includes TwinSpires, United Tote, Exacta and sports betting. TwinSpires takes horse racing wagers from account holders and earns commissions from white-label wagering services. Under those arrangements, Churchill Downs typically supplies the platform and operations while a partner provides the brand and marketing. United Tote contracts to provide wagering systems to racetracks and other betting businesses, while Exacta supplies historical racing technology to company-owned and third-party venues. Sports betting includes retail sportsbooks and online betting through third parties.
The company does not disclose a single price for its offerings: revenue comes from wagering commissions, gaming, services and event-related charges. Its operations include repeated wagering and contracted services, alongside event-driven revenue from races such as the Derby.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Live and Historical Racing | $1.4 billion | 47.7% | 13.8% |
| Gaming | $1.0 billion | 35.6% | 0.37% |
| Wagering Services and Solutions | $488.2 million | 16.7% | 3.98% |
| Product and Service, Other | $100,000.00 | 0.00% | 0.00% |
Customers and how it sells
Churchill Downs serves racegoers, casino and historical racing patrons, and people who wager remotely. TwinSpires customers in permitted states establish and fund accounts, then place horse racing wagers by telephone, mobile application or internet. They can also access live race streams, replays and racing information.
Business customers include racetracks, off-track betting facilities and other wagering operators using United Tote systems, as well as venues using Exacta technology. Churchill Downs also provides technology services to FanDuel and DraftKings under its wagering services business. Sponsors and corporate partners buy access to racing events and audiences.
The company’s historical racing properties are in Kentucky, Virginia and New Hampshire. Its gaming properties and equity investments span additional states, including Indiana, Louisiana, New York, Pennsylvania, Illinois and Ohio. Retail sportsbooks operate at company properties and at certain entities in which it holds investments. Exacta also serves third-party venues in several states and is expanding internationally.
As of December 31, 2025, Churchill Downs had approximately 9,000 team members, including approximately 6,600 full-time employees. It also employs seasonal workers, primarily in the second quarter around the Kentucky Derby.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Live and Historical Racing | $1.4 billion | 47.7% | 13.8% |
| Gaming | $1.0 billion | 35.6% | 0.37% |
| Wagering Services and Solutions | $488.2 million | 16.7% | 3.98% |
Suppliers and costs
A significant amount of Churchill Downs’ revenue comes from slot machines, historical racing machines, video lottery terminals and video poker machines. The company faces a limited number of slot machine and historical racing machine manufacturers serving the industry.
Churchill Downs works with game manufacturers to convert games developed for conventional casinos into historical racing titles. It is also developing electronic table games with potential suppliers; the company says that work involves product development and regulatory requirements. United Tote manufactures and operates pari-mutuel wagering systems, while Exacta’s system supports games from multiple vendors.
Costs include employees, compensation and benefits, property operations, technology, professional fees, and gaming taxes and license fees. Gaming fees and taxes vary by jurisdiction and can depend on revenue, the number of devices or tables, and license issuance or renewal. The company incurred approximately $5 million of expense in Central Virginia in Q3 2026 from a new tax on live racing days.
The company also spends on maintaining and developing properties. It expects 2026 maintenance capital spending of $90 million to $100 million and project capital spending of $160 million to $180 million.
- Revenue$2.9B
- Cost of revenue−$1.9B
- Selling, general and administrative−$246.2M
- Other operating costs−$52.6M
- Operating income$683.8M
Competitive position
Churchill Downs competes for customers’ discretionary spending against spectator sports, sports betting and other entertainment. Its racetracks compete with other tracks for horses and with racing content elsewhere for simulcast wagering. Historical racing venues compete with regional casinos and other gaming options. No individual competitor is identified by name in the company’s discussion of those competitive markets.
TwinSpires competes with other advance-deposit wagering businesses for customers and racing content, as well as with physical racing and gaming venues. Exacta competes with other historical racing and central determinant systems providers. Casinos compete with other casinos, lotteries, online gambling and other gaming. The company says a new casino in Petersburg put competitive pressure on its Central Virginia venues.
Our reading: The Kentucky Derby and Churchill Downs Racetrack provide a strong event-based advantage because the company controls a longstanding race that also generates admissions, sponsorship and television-rights revenue. Our reading: Licenses and the ability to move historical racing machines within Virginia provide a more limited regional advantage: they support the company’s operating position, but do not prevent nearby casinos from competing. Our reading: TwinSpires’ platform and business-to-business services support its distribution position, though it must compete for both bettors and racing content.
Growth opportunities
Churchill Downs plans to expand Derby Week through racetrack investment, sponsorship, television viewership and wagering. Construction has begun on Victory Run, a racetrack project the company expects to complete for the 2028 Derby. It is designed to add private suites, dining and covered box seats.
The company and the New York Racing Association plan to launch the Thoroughbred Championship Series in 2027, beginning with the Kentucky Derby and Kentucky Oaks. Churchill Downs intends the series to connect races across a season and create opportunities in media rights, hospitality, sponsorship, licensing and wagering.
In historical racing, the company is adding game content and developing electronic table games. It plans to roll out craps around the end of 2026 and is working on blackjack for 2027. In Virginia, it has approval to relocate and expand its Collinsville venue, and it can move machines and sites within the state subject to limitations. The company estimates that The Rose serves a Northern Virginia market of 6.5 million people.
Churchill Downs expects Rockingham Grand Casino in New Hampshire to open in mid-2027. The company also plans to develop TwinSpires through new wagering products, including Easy Bets, and AI-based racing information. It expects proceeds from planned regional gaming property sales to reduce debt, fund share repurchases and support selected investments.
- $1.6BFY2021
- $1.8BFY2022
- $2.5BFY2023
- $2.7BFY2024
- $2.9BFY2025
Structural risks
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Regulation and licenses. Racing, wagering and gaming are extensively regulated. Licenses require renewal, and changes in gaming laws or taxes could adversely affect operations. In Louisiana, Churchill Downs discontinued historical racing machine operations after a court ruling on the law authorizing them became final.
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Competition. New gaming licenses or expanded gaming near the company’s properties could affect its business. Its Central Virginia venues have faced pressure from a new casino in Petersburg; online gambling could also affect physical casinos and historical racing venues.
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Consumer spending and attendance. Economic conditions can reduce disposable income and spending on entertainment. Extraordinary events may discourage visits, while unfavorable weather can cancel events or lower attendance and wagering.
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Development and transactions. New venues and renovations require investment and can face delays, cost overruns or other uncertainties. Acquisitions and divestitures can also encounter regulatory, integration and transition difficulties.
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Technology and suppliers. The business relies on technology services and faces cybersecurity and system-disruption risks. A limited number of slot and historical racing machine manufacturers serve the industry, and technological changes can impose additional costs.
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Debt restrictions. Debt covenants restrict actions including additional borrowing, certain investments, asset sales, dividends and share repurchases.
Bottom line
Our reading
Our reading: Churchill Downs combines an event-led racing business with recurring wagering, technology and gaming operations, but its planned casino sales would make the Derby, historical racing and TwinSpires more central to the portfolio (item1; call_prepared). Its ability to develop those businesses rests on customer demand, investment and regulatory permissions, while nearby competition and the execution of property sales remain consequential uncertainties (item1a; call_prepared).