One signature race…
Two iconic Spires…
More than a century of grand tradition and spectacle…
And that’s just the opening chapter of the Churchill Downs Incorporated (CDI) story.
The Evolution of CDI
CDI’s history is well known. Its namesake racetrack, Churchill Downs, in Louisville, Ky., opened in 1875 and during its inaugural race meeting featured two races, the Kentucky Derby and Kentucky Oaks, which still highlight Churchill Downs’ live racing calendar today.
Today, the Twin Spires still proudly reign over Churchill Downs’ homestretch, and Kentucky Derby champions race by these architectural features turned trademarks on their way to the finish line, the Winner’s Circle and the history books.
As the Kentucky Derby legacy has evolved over 130-plus years, so has CDI’s stable of businesses. The publicly traded company has evolved from one world-famous venue in Central Kentucky to the United States’ premier racing, gaming and entertainment company with a myriad of holdings, including:
- Five racetracks;
- Six casinos;
- Big Fish Games, the world's largest distributor of casual games;
- The country’s leading online wagering business, TwinSpires.com;
- A video poker business
- A multi-state network of off-track betting (OTB) facilities; and
- A collection of racing-related data, totalisator and telecommunication companies that support CDI’s sports and gaming operations.
CDI now employs more than 5,000 people and maintains physical operations in eleven states: California, Florida, Georgia, Illinois, Kentucky, Louisiana, Maine, Mississippi, New York, Ohio, and Washington.
Growth Through Diversification
CDI’s continued growth over the decades has come through continued diversification:
- Adding slot-machine gaming and video poker operations at racetracks where alternative gaming is authorized;
- Acquiring two casino resorts in the Mississippi Delta region and one in Maine;
- Building and acquiring online gaming platforms and deploying mobile wagering technologies that provide convenient and cost-efficient ways to distribute and process wagers on racing content; and
- Using increased cash flow to pay down debt and invest in new or ancillary businesses that fit with our company’s core skill sets and customer value proposition.
CDI’s growth-through-diversification strategy has well served the company and its shareholders by allowing the company to broaden its focus and hedge its investment in its traditional domain of horse racing.
For example, as new laws have allowed it, CDI has built and opened slot-machine gaming operations affiliated with its racetracks in Miami Gardens, Fla., and New Orleans, La. CDI’s “racinos” offer gaming positions as well as dining and entertainment options with a local focus and flavor. Fair Grounds Race Course & Slots is only minutes from New Orleans famed French Quarter and treats visitors to a Mardi Gras-style gaming experience. Calder Casino showcases the sultry South Florida vibe and features slot-machine gaming and a poker room. Both facilities target customers in their respective regional markets. In addition, CDI’s 50 percent owned joint venture, Miami Valley Gaming and Racing LLC, is currently constructing a video lottery terminal and harness racing facility in southwest Ohio.
CDI’s launch of TwinSpires.com, an advance-deposit waging platform that allows customers to wager on horse racing from computers, tablet devices and smart phones, created another retail outlet for wagering transactions and data distribution. Now customers can place wagers at their convenience, any time, any place and anywhere it’s authorized through the device of their choosing. CDI has added to TwinSpires.com's reach through the acquisitions of additional account-wagering and data companies, including AmericaTAB and Brisnet.com in June 2007 and Youbet.com in June 2010. CDI’s investment in online wagering technology and customer support systems also positions the company to take advantage of additional Internet gaming opportunities, such as online poker, as those activities are authorized at the state or federal level.
Through its purchase of Youbet.com, CDI also acquired United Tote, a U.S.-based totalisator company that designs, manufactures and operates pari-mutuel wagering systems for more than 150 racing companies and numerous OTB facilities in North America and around the world, in 2010. United Tote has provided CDI with additional opportunities to realize efficiencies through new technology and innovation, with recently launched applications like FastBet™ wagering accounts. FastBet™ allows customers to avoid long lines at the mutuel windows and place on-track wagers from their cell phones or other mobile devices.
Kentucky Derby and Kentucky Oaks
When it comes to its traditional horse racing business, CDI continues to identify innovative ways to grow the economic significance of marquee events, such as the Kentucky Derby and Kentucky Oaks.
Kentucky Derby Week now features a string of festivities, starting with “Opening Night,” a special night racing event that kicks off Churchill Downs’ Spring Meet with red-carpet arrivals and a “gala” atmosphere. Kentucky Derby Week has added ancillary events that connect back to Derby brand attributes such as fashion, celebrities and great food and hospitality. “Taste of Derby,” held on the eve of the Kentucky Oaks, is a fundraiser showcasing fine cuisine and celebrity chefs from racing destinations around the country.
Kentucky Derby Week rounds out with Friday’s Kentucky Oaks “Pink Out,” benefiting Bright Pink and Kentucky’s Horses and Hope. The Kentucky Oaks Survivors’ Parade for breast cancer survivors provides an emotional high point for the day that celebrates women and causes important to them, while the Kentucky Oaks fashion contest helps put “Ladies First” by rewarding guests for their stylish ensembles.
The first Saturday in May brings the world’s premier race for Thoroughbreds, the Kentucky Derby Presented by Yum! Brands, along with all of the Red Carpet pageantry that leads up to the “Run for the Roses.” Worldwide exposure for the Kentucky Derby experience has grown in recent years through the expanded broadcast coverage of the Kentucky Derby undercard and main event on NBC Sports and its cable partners, as well as through the extension of the Kentucky Derby Party program, which helps racing enthusiasts who can’t make it to Churchill Downs for Derby Day still celebrate in style with tips for throwing an authentic Kentucky Derby party at home.
Charting Net Revenues and EBITDA
While the economy has been experiencing a period of uncertainty and even recession, CDI has been focused on one thing: profitable growth.
To track the growth of net revenues and profits since 2004, click here.
A Proud Past and Vibrant Future
CDI owes much to its horse racing heritage and is expanding on that tradition while evolving its business mix, management team and growth strategies to navigate any challenges we encounter. Our growth-through-diversification strategy allows us to push boundaries and increase profitability while still being true to our roots and what has made the Churchill Downs brand one of the best in the business.
Much has changed since that first Kentucky Derby Day in 1875, but one thing hasn’t: our commitment to building a profitable, vibrant company that is valued by our customers, investors, employees and business and community partners for generations to come. After more than a century of growth and progress, the Churchill Downs Incorporated story continues. We encourage you to discover the next chapter with us!