Churchill Downs rporated(US:CHDN)2026-02-25 21:36Business Segments - The Company operates through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming[13]. - The Live and Historical Racing segment includes revenue from pari-mutuel wagering, simulcast fees, and event-related services at Churchill Downs Racetrack and other properties[14][15]. - The Gaming segment generates revenue from various gaming operations, including slot machines and table games, supporting the casino license[46]. - The company operates a total of 14,335 gaming terminals across its properties, with 646,000 square feet of casino space[47]. Investments and Developments - The Company is investing up to $30 million to renovate the Finish Line Suites and The Mansion for the 152nd Kentucky Derby in May 2026[22]. - The Company plans to invest $280-$300 million to build a new facility at Churchill Downs Racetrack, expected to be completed by the 2028 Kentucky Derby[22]. - Derby City Gaming was expanded in Q2 2023, adding a 123-room hotel and a VIP gaming area[25]. - The company opened the Terre Haute Casino Resort in Indiana in April 2024, which includes a hotel and a retail sportsbook[49]. - The company plans to sell 15-20 acres of land at Calder Casino for future retail development[48]. Racing Operations - Churchill Downs Racetrack conducts approximately 80 live race days each year and features one of the largest 4K video boards in the world[17]. - The Fair Grounds Race Course in Louisiana conducts approximately 75 live racing days each year and operates 13 off-track betting facilities[51]. Market Access and Technology - Exacta, acquired in August 2023, provides central determinant system technology for historical racing machines across multiple states[44]. - The company has executed strategic market access agreements for sports betting with Bet365 in Pennsylvania and Golden Nugget in Indiana[45]. Employment and Workforce - As of December 31, 2025, the company employed approximately 9,000 team members, including about 6,600 full-time employees[68]. Equity Investments - The company has a 61.3% equity ownership in Rivers Casino Des Plaines, which has 1,510 gaming terminals and 120 table games[57]. - The company has a 50% equity investment in Miami Valley Gaming and Racing in Ohio, which features a harness racetrack and retail sportsbook[58]. Regulatory Environment - The gaming industry is highly regulated, with gaming laws designed to protect consumers and ensure the integrity of the industry[86]. - Changes in gaming laws or regulations could have a material adverse impact on the company's gaming operations[87]. - The company is required to maintain responsible accounting practices and procedures, including reliable record-keeping and filing periodic reports with gaming regulators[89]. - The company pays substantial license fees and taxes in various jurisdictions, which are based on factors such as a percentage of gaming revenue received[102]. - The company must report and obtain approval for material loans, leases, and sales of securities from gaming authorities[101]. - The company is subject to environmental laws and regulations that may require significant capital expenditures for compliance[104]. Financial Risks - The company is exposed to market risks from adverse changes in general economic trends, which can affect consumer confidence and discretionary spending[298]. - As of December 31, 2025, the company had $2.1 billion outstanding under its Credit Agreement, which bears interest at SOFR-based variable rates[299]. - A one-percentage point increase in the SOFR rate would reduce net income and cash flows from operating activities by $14.7 million[299]. Gaming Operations - The company operates 540,000 square feet of historical racing entertainment venues with a total of 10,190 historical racing machines[23]. - Sports betting is operational in 39 states and the District of Columbia as of December 31, 2025, with the company active in eleven states for retail sports betting[82]. - iGaming is authorized in seven states, with potential expansion as Maine authorized it in January 2026[84]. - The company has faced legal challenges regarding historical horse racing operations in Louisiana, impacting revenue comparability[79].