Executive Summary:
Churchill Downs Inc. (CDI), a prominent player in the racing and gaming industry for nearly 150 years, is most famously as the home of the Kentucky Derby. CDI has strategically evolved into a multi-state publicly traded company with a diverse portfolio. Their operations now encompass live and historical racing entertainment venues, online horse racing wagering through TwinSpires, and regional casino gaming properties. Churchill Downs Inc. continues to be a significant force in the world of entertainment and gaming.
Churchill Downs Inc. reported revenue reached $624.2 million, exceeding analysts’ expectations of $620.3 million. The reported Earnings Per Share (EPS) was $0.92, which matched the analysts’ consensus forecast. Churchill Downs achieved a record revenue of $2.7 billion, an 11% increase compared to the previous year, and an EPS of $5.68.
Stock Overview:
| Ticker | $CHDN | Price | $100.02 | Market Cap | $7.35B |
| 52 Week High | $150.21 | 52 Week Low | $96.67 | Shares outstanding | 73.49M |
Company background:
Churchill Downs Inc. (CDI) traces its origins back to 1875 with the opening of the Churchill Downs racetrack in Louisville, Kentucky. The visionary behind this endeavor was Colonel Meriwether Lewis Clark Jr., the grandson of the famous explorer William Clark. Inspired by European horse racing traditions, Clark secured funding through subscriptions and leased 80 acres of land from his uncles, John and Henry Churchill, in whose honor the track was named. The inaugural Kentucky Derby was held on May 17, 1875, marking the beginning of a legendary institution in American horse racing. Early funding came from private investors who believed in Clark’s vision of establishing a premier racing event in the United States.
Churchill Downs evolved beyond its flagship racetrack. While initially focused solely on live thoroughbred racing, the company strategically diversified its offerings. Their “products” now encompass live racing at various tracks, historical racing machine (HRM) entertainment venues, and casino gaming operations across multiple states. A significant component of their business is TwinSpires, an online wagering platform for horse racing and sports betting. This expansion into different facets of the gaming and entertainment industry demonstrates CDI’s adaptability to changing market dynamics and consumer preferences.
Key competitors in the gaming and entertainment space include major casino operators like Las Vegas Sands, MGM Resorts International, Caesars Entertainment, and Boyd Gaming. In the realm of horse racing and online wagering, they compete with other racetrack operators and advanced deposit wagering services. They face broader competition for discretionary entertainment spending from various leisure activities. Churchill Downs Inc. is headquartered in Louisville, Kentucky, the city where its iconic namesake racetrack was founded. The corporate offices are located at 600 N. Hurstbourne Parkway, Suite 400, Louisville, KY 40222.
Recent Earnings:
Churchill Downs Inc. (CDI) achieved a record full-year net revenue of $2.7 billion, representing an 11% increase compared to 2023. This growth was primarily driven by strong performance in their Live and Historical Racing segment, which saw increased revenue due to a record-breaking 150th Kentucky Derby Week and the opening of new Historical Racing Machine (HRM) venues in Virginia. The Gaming segment also contributed significantly to the revenue increase, primarily due to the opening of the Terre Haute Casino Resort in Indiana. Net revenue reached $624.2 million, an 11% increase year-over-year, again benefiting from the new Virginia HRM facilities and the Terre Haute casino. This quarterly revenue slightly exceeded analysts’ expectations of $620.3 million.
Their net income attributable to CDI was $426.8 million, or $5.68 per diluted share, a 2% increase compared to the previous year. The fourth-quarter net income attributable to CDI was $71.7 million, or $0.95 per diluted share, a substantial 24% increase year-over-year. The reported Earnings Per Share (EPS) for the fourth quarter matched the analysts’ consensus forecast of $0.92. The 150th Kentucky Derby Week set records for all-sources handle and Adjusted EBITDA.
The Owensboro Racing & Gaming venue in Kentucky commenced operations in February 2025, indicating continued expansion. CDI anticipates project capital expenditures to be between $350 million and $400 million in 2025, focusing on further expansion of its HRM and gaming operations.
The Market, Industry, and Competitors:
Churchill Downs Inc. operates within the broader gambling and entertainment market, with key segments in horse racing, online wagering, and casino gaming. The horse racing market, globally, is substantial and is projected to reach $182.393 billion by 2030, growing at a CAGR of 7.45% from 2025. This growth is fueled by increasing popularity, the rise of online betting platforms, and growing investments in the sport. In the United States and Europe, the horse racing market is even larger and is expected to grow at a CAGR of 6.47%-8.73% between 2024 and 2031, reaching $538 billion. Factors such as rising disposable incomes and increasing on-track service consumption contribute to this regional growth.
The global online casino market was estimated at $19.11 billion in 2024 and is projected to grow at a CAGR of 12.2% from 2025 to 2030, reaching $38.00 billion. This expansion is driven by increasing smartphone penetration, high-speed internet access, the liberalization of gambling laws in many regions, and the convenience of remote gambling.
Analysts’ long-term stock price forecasts for CHDN also indicate significant potential growth, with one estimate suggesting a price of $248.79 by 2030. This bullish outlook is likely based on the anticipated expansion of the markets CDI operates in and the company’s strategic investments in new gaming and entertainment venues.
Unique differentiation:
Churchill Downs Inc. operates in the highly competitive gambling and entertainment industry, facing rivals across its various business segments. In the realm of casino gaming, major national players such as Las Vegas Sands, MGM Resorts International, Caesars Entertainment, and Boyd Gaming represent significant competition. These companies often have a broader geographic footprint and diverse entertainment offerings that extend beyond gaming, including hotels, dining, and live entertainment. CDI’s gaming properties also compete with other commercial and Native American casinos, as well as various forms of legalized gaming like state lotteries and video lottery terminals, all vying for consumer entertainment spending.
Within the horse racing and online wagering sectors, CDI’s TwinSpires platform faces competition from other advanced deposit wagering (ADW) services. These platforms allow customers to bet on horse races remotely and often include sports betting and online casino games as well. Additionally, traditional brick-and-mortar racetracks and off-track betting (OTB) locations provide alternative options for horse racing enthusiasts. The Stronach Group and The New York Racing Association are examples of other significant racetrack operators in the United States. Furthermore, the increasing legalization and popularity of sports betting have introduced new competitors, including daily fantasy sports companies like DraftKings and FanDuel, which are expanding into sports wagering and iGaming.
Consumers have a wide array of choices for their leisure spending, including spectator sports, concerts, movies, and other recreational activities. Therefore, CDI must continually innovate and enhance its offerings across its racing, gaming, and online platforms to attract and retain customers in this dynamic and competitive environment. The company’s ability to leverage its iconic Kentucky Derby brand and strategically expand its gaming and HRM operations is crucial in maintaining its market position against these diverse competitors.
Churchill Downs Inc. possesses several unique differentiators that set it apart from its competitors in the broad gambling and entertainment market. Its most valuable asset is the iconic Kentucky Derby. This Grade 1 stakes race is not just a sporting event; it’s a cultural phenomenon with unparalleled brand recognition and historical significance. No other competitor can replicate the Derby’s tradition, prestige, and the massive media attention it garners, providing CDI with a powerful marketing platform and a unique draw for both avid racing fans and casual observers. This flagship event underpins much of CDI’s brand identity and provides a distinct advantage in attracting customers to its other racing and gaming ventures.
CDI has strategically integrated its historical racing machine (HRM) venues with its racing licenses, particularly in Kentucky. This allows them to offer slot-like gaming experiences under the umbrella of pari-mutuel wagering, which in some jurisdictions provides a regulatory advantage and a different tax structure compared to traditional casino gaming. This early adoption and successful expansion of HRM facilities, often branded as Derby City Gaming, has created a unique niche and revenue stream that many competitors are still trying to emulate or catch up with. This synergy between historical racing and live racing events provides a differentiated entertainment offering.
CDI has successfully built a diversified portfolio that encompasses both, along with a significant online wagering platform through TwinSpires. This allows them to cross-promote their offerings, capitalize on different segments of the gambling market, and leverage their established customer base across various entertainment options.
Management & Employees:
William “Bill” C. Carstanjen: who serves as the Chief Executive Officer and has been with the company in various executive roles since 2005, became CEO in 2014. His tenure has been marked by a strategic diversification into online wagering and regional casino gaming, alongside the continued growth of the Kentucky Derby and Oaks events.
Marcia A. Dall: Executive Vice President and Chief Financial Officer, bringing over 30 years of financial experience to the company, including expertise in capital management and investor relations.
Maureen Adams is the Executive Vice President of Gaming Operations, leveraging her extensive leadership experience in the gaming industry to oversee CDI’s casino properties.
Bradley K. Blackwell: the Executive Vice President, General Counsel, and Secretary, ensuring the company’s legal and regulatory compliance.
Benjamin “Ben” Murr, the Senior Vice President and President of TwinSpires and Online Gaming. This diverse and experienced management team works to execute CDI’s strategic vision and drive growth across its multifaceted operations.
Financials:
Churchill Downs Incorporated (CDI) has revenue that grew from approximately $1.33 billion in 2019 to about $2.7 billion in 2024, reflecting a compound annual growth rate (CAGR) of around 15-16%. This growth was driven by multiple factors, including record-breaking events like the 150th Kentucky Derby, and expansion into new gaming markets such as the opening of the Terre Haute Casino Resort in 2024.
Earnings growth has also been robust, with net income rising from around $140 million in 2019 to approximately $427 million in 2024. CDI’s earnings grew at an average annual rate of about 32%, although the growth rate has moderated somewhat in the most recent year, with a 2% increase in 2024 compared to the prior year. This strong earnings performance has been supported by operational efficiencies and higher-margin revenue streams, contributing to a healthy net profit margin averaging around 15.6% in recent years.
Churchill Downs has expanded its asset base substantially, with total assets increasing from roughly $3 billion in 2021 to nearly $7 billion by the end of 2023. Correspondingly, total debt also rose significantly, from about $2 billion in 2021 to almost $4.8 billion in 2023, reflecting the company’s investments in new properties and expansion projects. Shareholders’ equity has improved from $307 million in 2021 to $894 million in 2023, indicating growth in net worth and retained earnings.
The company’s ability to leverage its iconic racing brand alongside diversified gaming operations has underpinned its performance, positioning it well for continued growth in the competitive entertainment and gaming industry.
Technical Analysis:
The stock is in a stage 4 bearish markdown on the monthly and weekly chart. The zone for a possible reversal is at $86 – $95. It is currently at $100. The near term daily chart is also bearish, showing a move to the $95 zone is most likely.
Bull Case:
Iconic Brand and Unique Assets: At the heart of CDI’s appeal is the Kentucky Derby, a globally recognized and historically significant event that provides unparalleled brand recognition and a consistent draw. This flagship event acts as a powerful marketing engine for the company’s other ventures. Furthermore, their strategic development and integration of Historical Racing Machine (HRM) venues, particularly in Kentucky and Virginia, offer a differentiated gaming experience with attractive regulatory and tax benefits in some jurisdictions. These unique assets provide a competitive moat that is difficult for competitors to replicate.
Diversified Growth Strategy: CDI has successfully diversified its operations beyond traditional horse racing into online wagering (TwinSpires) and regional casino gaming. This multi-pronged approach allows the company to tap into various segments of the expanding gambling and entertainment market, reducing reliance on any single revenue stream. Strategic capital investments in new and existing properties, including significant upgrades to Churchill Downs Racetrack itself, are expected to drive future growth and enhance the customer experience. The company’s focus on expanding its HRM footprint in Virginia and Kentucky, along with its casino developments in new markets like Indiana, positions it well to capitalize on regional growth opportunities.
Bear Case:
Regulatory and Political Risks: The gambling industry is subject to significant regulatory scrutiny and is sensitive to changes in legislation and tax policies at the state and federal levels. Increased taxes, stricter regulations on gaming operations, or changes in the legality of certain forms of gambling (like online betting or HRMs) could adversely affect CDI’s profitability and business model. Additionally, public perception and any negative headlines surrounding the horse racing industry, such as concerns about horse safety, could negatively impact attendance and wagering.
Dependence on Horse Racing Industry Trends: Despite its diversification efforts, a significant portion of CDI’s identity and business is still linked to the horse racing industry, which has faced challenges like declining attendance and wagering in inflation-adjusted terms. While the Kentucky Derby remains a strong event, overall trends in the broader horse racing market could still exert a drag on CDI’s growth if the company cannot fully offset this with its other ventures. Any adverse developments within the horse racing industry, such as equine health issues or declining interest in the sport, could negatively impact CDI’s core business.
