Churchill Downs Incorporated operates in the live and historical pari-mutuel racing, online wagering, and regional casino gaming industries. The company manages its business through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. In 2025, approximately 29,000 thoroughbred horse races were conducted in the U.S., which was down 4.7% compared to 2024. The industry faces competition for discretionary consumer spending from a variety of sources, including spectator sports, sports wagering, and other entertainment and gaming options. Legalized gambling is currently permitted in various forms in many states in the U.S., and additional states could legalize gambling in the future.

The company operates in a highly competitive industry. Primary competitors named in the filing include other advance deposit wagering businesses for TwinSpires, other HRM and central determinant systems providers for Exacta, and traditional and Native American casinos, VLTs, state sponsored lotteries, online gambling, and other forms of legalized and illegal gaming for the Gaming segment. The company's competitive advantages include its iconic flagship event, the Kentucky Derby, which is the longest continuously held annual sporting event in the U.S. and the first race of the Triple Crown. TwinSpires is described as one of the largest and most profitable legal online horse racing wagering platforms in the U.S. The demographic profile of guests, global television viewership, and long-running nature of the Kentucky Derby are attractive to sponsors and corporate partners, especially those with luxury and/or marquee brands.

The company generates revenue primarily through commissions from pari-mutuel wagering on live and historical races, simulcast fees, racing event-related services including admissions, personal seat licenses, sponsorships, television rights, food and beverage services, and gaming transactions. The Live and Historical Racing segment earns commissions from pari-mutuel wagering on live and historical races, simulcast fees, and racing event-related services. The Wagering Services and Solutions segment generates revenue from TwinSpires' advance deposit wagering business, United Tote's pari-mutuel wagering systems, Exacta's central determinant system technology, and sports betting. The Gaming segment generates revenue from slot machines, table games, video lottery terminals, video poker, HRMs, ancillary food and beverage services, hotel services, and other miscellaneous operations. Revenue is influenced by racing calendars, with the majority of live racing revenue occurring during the second quarter with the running of the Kentucky Oaks and Kentucky Derby.

The Live and Historical Racing segment includes Churchill Downs Racetrack, an internationally known thoroughbred racing operation best known as the home of the Kentucky Derby, located on 175 acres with a one-mile dirt track and a 7/8-mile turf track, conducting approximately 80 live race days each year. The segment also includes historical racing entertainment venues in Kentucky, Virginia, and New Hampshire. In Kentucky, properties include Derby City Gaming & Hotel with 1,270 HRMs, Derby City Gaming Downtown with 450 HRMs, Turfway Park with 810 HRMs, Newport with 460 HRMs, Oak Grove with 1,240 HRMs, Marshall Yards with 225 HRMs, Ellis Park with 300 HRMs, and Owensboro with 600 HRMs. In Virginia, properties include Colonial Downs/Rosie's New Kent with 490 HRMs, Rosie's Richmond with 1,200 HRMs, Roseshire/Henrico with 175 HRMs, The Rose with 1,610 HRMs, Rosie's Hampton with 700 HRMs, Rosie's Emporia with 150 HRMs, Rosie's Collinsville with 40 HRMs, and Rosie's Vinton with 470 HRMs. In New Hampshire, the segment includes Chasers Poker Room. Total HRMs across all Live and Historical Racing properties are 10,190. The segment also includes a 4K video board at Churchill Downs Racetrack measuring 171 feet wide by 90 feet tall, a stable area accommodating 1,400 horses, and a 114-room dormitory.

The Wagering Services and Solutions segment includes TwinSpires, an advance deposit wagering business that operates TwinSpires.com, BetAmerica.com, and other white-label platforms, and provides the Bloodstock Research Information Services platform. TwinSpires is licensed as a multi-jurisdictional simulcasting and interactive wagering hub in the state of Oregon. United Tote manufactures and operates pari-mutuel wagering systems for racetracks, OTBs, and other pari-mutuel wagering businesses. In April 2024, the Company completed the sale of 49% of United Tote to NYRA Content Management Solutions, LLC. Exacta, acquired in August 2023, is a leading provider of central determinant system technology in HRMs across the country, supporting multiple game vendors and serving venues in Virginia, Kentucky, Wyoming, New Hampshire, Kansas, and Alabama, and is expanding internationally. The sports betting business includes retail sportsbooks at wholly owned properties and online sports betting through third parties, with strategic market access agreements with Bet365 in Pennsylvania, Golden Nugget in Indiana, and various partners in Kentucky. The Gaming segment includes wholly owned casino properties: Calder Casino in Florida with 1,070 slots and 6 table games, Terre Haute Casino Resort in Indiana with 1,040 slots and 38 table games, Hard Rock Iowa with 680 slots and 16 table games, Fair Grounds Race Course and Slots in Louisiana with 1,540 slots, Oxford Casino and Hotel in Maine with 955 slots and 22 table games, Ocean Downs Casino and Racetrack in Maryland with 900 slots and 19 table games, Harlow's Casino Resort and Spa in Mississippi with 660 slots and 13 table games, Riverwalk Casino Hotel in Mississippi with 560 slots and 11 table games, del Lago Resort and Casino in New York with 1,665 slots and 80 table games, and Presque Isle Downs and Casino in Pennsylvania with 1,525 slots and 31 table games. The segment also includes equity investments: a 61.3% equity ownership in Midwest Gaming Holdings, LLC, the parent company of Rivers Casino Des Plaines in Illinois, and a 50% equity investment in Miami Valley Gaming and Racing in Ohio.

In 2025, the company opened Owensboro Racing and Gaming in February 2025 with 600 HRMs. The company acquired 90% of the outstanding equity interests related to Casino Salem in Salem, New Hampshire in August 2025 for a base purchase price of $180.0 million ¹. The company announced in January 2026 that Casino Salem will be redeveloped as Rockingham Grand Casino, which will feature 825 historical racing machines, 32 table games, 12 electronic table game seats, and a 900-seat live entertainment venue, with an expected capital investment of $180-200 million ². The company completed the expansion of Rosie's Richmond in August 2025, adding 450 HRMs. Roseshire Gaming Parlor in Henrico County, Virginia opened in September 2025 with 175 HRMs. The company recognized a non-cash impairment charge of $85.1 million ³ in the third quarter of 2025 for the entire value of the Chasers' gaming rights, and a gain of $40.0 million ⁴ on settlement of a noncurrent liability related to Chasers. The company repurchased $425.3 million ⁵ of shares under its share repurchase programs in 2025, based on trade date. The company declared a dividend of $0.438 ⁶ per share in October 2025, representing a 7% increase over the prior year. The company is investing up to $30 million ⁷ to renovate the existing Finish Line Suites and The Mansion for the 152nd Kentucky Derby in May 2026, and is investing $280-$300 million ⁸ to build a new building on the first turn of the Churchill Downs Racetrack, with construction anticipated to begin following the 2026 Kentucky Derby and be completed by the 2028 Kentucky Derby.

Record net revenue was $2.9 billion ⁹, up $191.6 million ¹⁰ or 7.0% ¹¹. Net income was $383.0 million ¹², down $43.8 million ¹³ or 10.3% ¹⁴. Record Adjusted EBITDA was $1.2 billion ¹⁵, up $46.1 million ¹⁶, or 4.0% ¹⁷. Net revenue increased $191.6 million ¹⁸ driven by a $169.1 million ¹⁹ increase from the Live and Historical Racing segment, a $18.7 million ²⁰ increase from the Wagering Services and Solutions segment, and a $3.8 million ²¹ increase from the Gaming segment. Operating income decreased $25.2 million ²² driven by an increase in impairment expense of $43.6 million ²³ primarily related to the net impairment of Chasers' gaming rights. Net income attributable to Churchill Downs Incorporated decreased $43.8 million ²⁴.

A major growth vector is the expansion of historical racing entertainment venues. The company opened Owensboro Racing and Gaming in February 2025 with 600 HRMs. The company acquired 90% of Casino Salem in Salem, New Hampshire in August 2025 for a base purchase price of $180.0 million ²⁵, which will be redeveloped as Rockingham Grand Casino, featuring 825 historical racing machines, 32 table games, 12 electronic table game seats, and a 900-seat live entertainment venue, with an expected capital investment of $180-200 million ²⁶ and a planned opening in mid-2027. The company completed the expansion of Rosie's Richmond in August 2025, adding 450 HRMs, and opened Roseshire Gaming Parlor in September 2025 with 175 HRMs. Marshall Yards Racing & Gaming held its grand opening on February 25, 2026 with 225 HRMs. At Churchill Downs Racetrack, the company is investing up to $30 million ²⁷ to renovate the Finish Line Suites and The Mansion for the 152nd Kentucky Derby in May 2026, and is investing $280-$300 million ²⁸ to build a new building on the first turn, with construction anticipated to begin following the 2026 Kentucky Derby and be completed by the 2028 Kentucky Derby.

Another growth vector is the expansion of the Wagering Services and Solutions segment. Exacta, acquired in August 2023, is expanding its technology and product offerings to customers in new states and is expanding internationally. The sports betting business has executed strategic third-party market access agreements with Bet365 in Pennsylvania, Golden Nugget in Indiana, and with various market access partners in Kentucky. The company also provides technology services to third parties, including FanDuel and DraftKings, and earns commissions from white label ADW products and services. The company announced NBC Sports will showcase the Kentucky Oaks in prime time for the first time ever in 2026.The company spent $204.7 million ²⁹ in 2025 on project capital investments including Churchill Downs Racetrack, Roseshire, Owensboro, Marshall Yards, and Rosie's Richmond. The company currently expects its project capital to be approximately $180.0 to $220.0 million ³⁰ in 2026, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.

The company repurchased $425.3 million ³¹ of shares under its share repurchase programs in 2025, based on trade date. As of December 31, 2025, the company had approximately $429.5 million ³² of repurchase authority remaining under the July 2025 Stock Repurchase Program. The company declared a dividend of $0.438 ³³ per share in October 2025, which represented a 7% increase over the prior year, marking the fifteenth consecutive year that the company has increased the dividend. The company declared a dividend of $0.409 ³⁴ in October 2024.

Structural headwinds and execution risks management explicitly flagged include the highly competitive industry facing competition for discretionary consumer spending from spectator sports, sports wagering, and other entertainment and gaming options. The company faces risks from the expansion of land-based gaming or iGaming in markets where it operates brick-and-mortar casinos or racing venues. The company also faces risks related to the development of new venues and the expansion or renovation of existing facilities, which require significant investment and are susceptible to delays, cost overruns, and other uncertainties. Supply chain disruptions and inflationary pressure related to these projects could lead to delays and higher project costs.

Geographic, regulatory, or macro factors management identified as constraints include the highly regulated nature of the industry, with changes in gaming laws or regulations potentially having a material adverse impact. The company is subject to taxation in several jurisdictions, and changes in tax laws could result in additional tax liabilities. The company's business is sensitive to economic conditions which may affect consumer confidence and discretionary spending. Inclement weather conditions, including those potentially exacerbated by climate change, have caused and may in the future cause events to be canceled and/or attendance to be lower. The Louisiana Supreme Court issued an opinion on March 21, 2025 affirming that the 2021 HHR Act is unconstitutional, requiring a voter referendum before historical horse racing can be conducted in a parish, which resulted in the company discontinuing its HRM operations in Louisiana.

Management's message emphasizes strong performance and investments in the Kentucky Derby and new entertainment venues that are believed to provide long-term sustainable value creation for shareholders. Key themes include record net revenue of $2.9 billion ³⁶, record Adjusted EBITDA of $1.2 billion ³⁷, and a commitment to delivering strong financial results and long-term sustainable growth. The two or three strategic priorities emphasized for the period ahead include the continued expansion of historical racing entertainment venues, such as the development of Rockingham Grand Casino in New Hampshire with an expected capital investment of $180-200 million ³⁸ and a planned opening in mid-2027, and major capital investments at Churchill Downs Racetrack, including up to $30 million ³⁹ for renovating Finish Line Suites and The Mansion and $280-$300 million ⁴⁰ for a new building on the first turn. The company also emphasizes its strong cash flow generation and solid balance sheet that supports organic growth as well as strategic acquisitions.

For the year ended December 31, 2025, total net revenue was $2,925.9 million ⁴¹ compared to $2,734.3 million ⁴² in 2024. Net income attributable to Churchill Downs Incorporated was $383.0 million ⁴³ compared to $426.8 million ⁴⁴ in 2024. Diluted net income per common share was $5.29 ⁴⁵ compared to $5.68 ⁴⁶ in 2024. Operating income was $683.8 million ⁴⁷ compared to $709.0 million ⁴⁸ in 2024. Operating income margin was 23.4% ⁴⁹ compared to 25.9% ⁵⁰ in 2024. Net cash provided by operating activities was $769.8 million ⁵¹ compared to $771.7 million ⁵² in 2024. Total debt was $5,155.1 million ⁵³ as of December 31, 2025, compared to $4,938.7 million ⁵⁴ as of December 31, 2024. The company had cash and cash equivalents of $200.6 million ⁵⁵ and restricted cash of $87.9 million ⁵⁶ as of December 31, 2025. Significant one-time items included a non-cash impairment charge of $85.1 million ⁵⁷ for the Chasers' gaming rights and a gain of $40.0 million ⁵⁸ on settlement of a noncurrent liability, both included in Asset impairments, net. The company also recorded a $2.4 million ⁵⁹ write-off of HRMs in Virginia in the second quarter of 2025. For segment performance, Live and Historical Racing Adjusted EBITDA was $637.0 million ⁶⁰, up $62.4 million ⁶¹ or 10.9% ⁶² from fiscal year 2024. Wagering Services and Solutions Adjusted EBITDA was $177.3 million ⁶³, up $11.7 million ⁶⁴ or 7.1% ⁶⁵ from fiscal year 2024. Gaming Adjusted EBITDA was $483.0 million ⁶⁶, down $23.9 million ⁶⁷ or 4.7% ⁶⁸ from fiscal year 2024.

The company faces material risks from the highly regulated nature of its operations, where changes in gaming laws or regulations could adversely affect its business, and the loss of a license in one jurisdiction could trigger the loss of a license in another. The company is subject to significant competition, and expects competition levels to increase, including from online or mobile platforms such as iGaming, sports betting, and i-lotteries, which could divert customers from its properties. The company's debt facilities contain restrictions that limit its flexibility in operating its business, and any failure to comply with financial ratios and other covenants could have a material adverse impact. The company is exposed to cybersecurity risk, and while it has suffered cyber-attacks in the past that have not had a material impact, future attacks could have an adverse impact. The company's operations in certain jurisdictions depend on agreements with industry constituents including horsemen and other racetracks, and the failure to enter into or maintain these agreements on terms acceptable to the company could have a material adverse effect. The company recognized a non-cash impairment charge of $85.1 million ³⁵ for the Chasers' gaming rights in 2025, highlighting the risk of asset impairments.