Churchill Downs reports highest-ever revenue of $559.5M in Q1, 149th Kentucky Derby sets all-time record

Churchill Downs Incorporated, the parent company of the Kentucky Derby, has reported a record $559.5 million in revenue for the first quarter of the year, beating Wall Street expectations. The revenue hike was driven by its live and historic racing segment, which brought in $214.4 million, more than double the segment’s revenue last year of $86 million. Q1 net income was $155.7 million, over three times last year’s $42.1 million. Additionally, the 149th Kentucky Derby Day program reached $288.7 million, which is the highest recorded number yet.

As reported by the company, in total, the program earned $412 million during the entire Kentucky Derby Week, far surpassing last year’s results of $391.8 million. Saturday’s race surpassed the 2022 results in terms of attendance as well. According to official data, a total of 150,335 people visited the iconic racetrack to attend the race. This is a slight increase from the 147,294 guests in 2022. 

In the wake of these results, CDI has updated its EBITDA expectations for the event. Bill Carstanjen, Chief Executive Officer of the company, said that his team expects Kentucky Derby Week’s adjusted EBITDA to increase dramatically. "We expect the Kentucky Derby Week adjusted EBITDA to reflect a new record with $14 to $16 million of growth over the prior record set last year," the CEO said.

The CEO added that Churchill Downs will now focus on a year-long celebration and preparation for the jubilee 150th edition of the Kentucky Derby scheduled for May 2024.

Bill Carstanjen, Chief Executive Officer

The company’s betting segment TwinSpires reported a record-breaking handle of $73.6 million during the event, surpassing last year’s result of $67.4 million. The Kentucky Derby race was singlehandedly responsible for $47 million of the total handle. For comparison, the gambling brand reported a sports betting handle of $44 million during the 2022 race.

In 2021, Churchill Downs’ Q1 earnings report showed a loss of $31.9 million on online sports betting, so the firm made a series of strategic shifts. The Louisville-based company closed its online sports betting platform, TwinSpires Sportsbook, effectively exiting the online sports betting space. However, the online horse racing gambling platform of TwinSpires remains open, which is the one that now broke its handle record.

Meanwhile, the company continues to deliver technology and racing content to existing betting platforms. Earlier this year, DraftKings announced the launch of its first-ever horse racing product, DK Horse, in twelve states. The deal is said to be a 60-40 revenue share where Churchill Downs receives 60% of revenue from wagers taken through DK Horse. A similar deal has been struck with FanDuel. 

"Although our top line declined, our bottom line improved significantly," the CEO said during last week’s investor call. In the first quarter of 2023, TwinSpire brought in $96.3 million, compared to $101.4 million for the same quarter last year, of which most corresponded to the Derby week.

In addition to its existing racetracks in Kentucky, Florida, New Orleans, and Indiana, the company is building two new horse racing machine (HRM) venues in Virginia, and has the right to open three additional HRM facilities in the state. The company is also building a casino and event center in Richmond, Virginia, and Salem, New Hampshire.

The Kentucky General Assembly legalized sports betting in the state at the end of March, which means Churchill Downs will soon grow its HRM properties across its home state. The company expects this will happen in the second half of 2023.

In addition to these projects, the owner of the Kentucky Derby has finished with the $200 million redevelopment project of the landmark Churchill Downs racetrack. A new VIP seating area with 5,300 covered stadium seats at the first turn and an additional 2,000 reserved indoor dining seats, debuted at Saturday’s race.