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What changed in Churchill Downs Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Churchill Downs Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+282 added−268 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-20)

Top changes in Churchill Downs Inc's 2025 10-K

282 paragraphs added · 268 removed · 211 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

65 edited+26 added−20 removed52 unchanged
Biggest changeHistorical Racing Properties The following table summarizes key information regarding our current historical racing properties: State Property City/ Location Floor Space (Sq. ft.) Historical Racing Machines ("HRMs") Retail Race & Sportsbook (a) Kentucky Derby City Gaming & Hotel Louisville, Kentucky 55,000 1,270 ü Kentucky Derby City Gaming Downtown Louisville, Kentucky 43,000 450 ü Kentucky Turfway Park Northern Kentucky 45,000 810 ü Kentucky Newport Northern Kentucky 23,000 460 ü Kentucky Oak Grove Southwestern Kentucky 180,000 1,240 ü Kentucky Marshall Yards (b) Southwestern Kentucky 9,000 250 ü Kentucky Ellis Park Western Kentucky 40,000 300 ü Kentucky Owensboro (c) Western Kentucky 24,000 600 ü New Hampshire Chasers (d) Salem, New Hampshire 4,000 (d) N/A Virginia Colonial Downs / Rosie's New Kent / Central Virginia 127,000 490 N/A Virginia Rosie's (e) Richmond / Central Virginia 54,000 1,200 N/A Virginia Roseshire (f) Henrico County / Central Virginia 7,000 175 N/A Virginia Rosie's Dumfries / Northern Virginia 19,000 150 N/A Virginia The Rose Dumfries / Northern Virginia 58,000 1,650 N/A Virginia Rosie's Hampton / Southern Virginia 38,000 700 N/A Virginia Rosie's Emporia / Southern Virginia 22,000 150 N/A Virginia Rosie's Collinsville / Southern Virginia 2,000 40 N/A Virginia Rosie's Vinton / Western Virginia 15,000 470 N/A Total 765,000 10,405 (a) The Company's retail sports betting business is included in the Wagering Services and Solutions segment.
Biggest changeHistorical Racing Entertainment Venues The following table summarizes key information regarding our current historical racing entertainment venues: Location Property Floor Space (Sq. ft.) Historical Racing Machines ("HRMs") Retail Sportsbook (a) Kentucky Louisville Derby City Gaming & Hotel 55,000 1,270 ü Louisville Derby City Gaming Downtown 43,000 450 ü Northern Turfway Park 45,000 810 ü Northern Newport 23,000 460 ü Southwestern Oak Grove 55,000 1,240 ü Southwestern Marshall Yards 9,000 225 ü Western Ellis Park 40,000 300 ü Western Owensboro 30,000 600 ü Virginia Central Colonial Downs / Rosie's New Kent 21,000 490 N/A Central Rosie's Richmond 55,000 1,200 N/A Central Roseshire / Henrico 7,000 175 N/A Northern The Rose 58,000 1,610 N/A Southern Rosie's Hampton 38,000 700 N/A Southern Rosie's Emporia 22,000 150 N/A Southern Rosie's Collinsville 2,000 40 N/A Western Rosie's Vinton 33,000 470 N/A New Hampshire Salem Chasers 4,000 N/A N/A Total 540,000 10,190 (a) The Company's retail sports betting business is included in the Wagering Services and Solutions segment.
Criteria used in determining whether to grant a license to conduct gaming operations, while varying between jurisdictions, generally include consideration of factors such as the good character, honesty, and integrity of the applicant; the financial stability, integrity, and responsibility of the 12 applicant, including whether the operation is adequately capitalized in the state and exhibits the ability to maintain adequate insurance levels; the quality of the applicant’s gaming facilities; the amount of revenue to be derived by the applicable state from the operation of the applicant’s gaming facility; the applicant’s practices with respect to minority hiring and training; and the effect on competition and general impact on the community.
Criteria used in determining whether to grant a license to conduct gaming operations, while varying between jurisdictions, generally include consideration of factors such as the good character, honesty, and integrity of the applicant; the financial stability, integrity, and responsibility of the applicant, including whether the operation is adequately capitalized in the state and exhibits the ability to maintain adequate insurance levels; the quality of the applicant’s gaming facilities; the amount of revenue to be derived by the applicable state from the operation of the applicant’s gaming facility; the applicant’s practices with respect to minority hiring and training; and 12 the effect on competition and general impact on the community.
Under federal law, we are required to record and submit detailed reports of currency transactions 13 greater than $10,000 at our gaming facilities and racetracks as well as any suspicious activity that may occur at such facilities. Failure to comply with these requirements could result in fines or cessation of operations.
Under federal law, we are required to record and submit detailed reports of currency transactions greater than $10,000 at our gaming facilities and racetracks as well as any suspicious activity that may occur at such facilities. Failure to comply with these requirements could result in fines or cessation of operations.
We are required to maintain a current stock ledger that may be examined by gaming authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to gaming authorities.
We are required to maintain a current stock ledger that may be examined by gaming authorities at any time. If any securities are held in trust by an agent or by a 13 nominee, the record holder may be required to disclose the identity of the beneficial owner to gaming authorities.
License Fees and Gaming Taxes We pay substantial license fees and taxes in many jurisdictions in connection with our gaming operations which are computed in various ways depending on the type of gambling or activity involved. Depending upon the particular fee or tax involved, these fees and taxes are payable with varying frequency.
License Fees and Gaming Taxes We pay substantial license fees and taxes in many jurisdictions in connection with our gaming operations which are computed in various ways depending on the type of gambling or activity involved. Depending upon the fee or tax involved, these fees and taxes are payable with varying frequency.
Under the IHA, racetracks and ADWs can accept interstate off-track wagers if the racetracks and ADWs have approvals from (1) the host horse racetrack including a written agreement with the horsemen’s group, if applicable, (2) the host racing commission, and (3) the off-track racing commission.
Under the IHA, racetracks and ADWs can accept interstate off-track wagers if the racetracks and ADWs have approvals from (1) the host horse racetrack including a written agreement 10 with the horsemen’s group, if applicable, (2) the host racing commission, and (3) the off-track racing commission.
DCG Downtown has a gaming area, a main-level sports bar with a stage for live entertainment, retail sports betting, a premium bourbon bar, and an elegant wine lounge for guests, including locals, tourists, and convention attendees. Northern Kentucky Newport Racing & Gaming ("Newport") opened in October 2020 and is located within three miles of Cincinnati, Ohio.
DCG Downtown has a gaming area, a main-level sports bar with a stage for live entertainment, a premium bourbon bar, an elegant wine lounge for guests, including locals, tourists, and convention attendees, and a retail sportsbook. Northern Kentucky Newport Racing & Gaming ("Newport") opened in October 2020 and is located within three miles of Cincinnati, Ohio.
On October 25, 2022, a number of individual plaintiffs associated with video poker and truckstops, filed a lawsuit in the 19th Judicial District Court in East Baton Rouge, Louisiana against certain racetracks in Louisiana, including our Fair Grounds Race Course and Slots property, alleging that the 2021 HHR Act is unconstitutional to the extent it purports to permit historical racing in a parish without a referendum.
On October 25, 2022, a number of individual plaintiffs associated with video poker and truck stops, filed a lawsuit in the 19th Judicial District Court in East Baton Rouge, Louisiana against certain racetracks in Louisiana, including our Fair Grounds Race Course and Slots property, alleging that the 2021 HHR Act is unconstitutional to the extent it purports to permit historical racing in a parish without a referendum.
Qualification and suitability determinations require submission of detailed personal and financial information followed by a thorough investigation. Changes in licensed positions must be reported to gaming authorities. Gaming authorities have the ability to deny a license, qualification, or finding of suitability and have jurisdiction to disapprove a change in a corporate position.
Qualification and suitability determinations require submission of detailed personal and financial information followed by a thorough investigation. Changes in licensed positions must be reported to gaming authorities. Gaming authorities can deny a license, qualification, or finding of suitability and have jurisdiction to disapprove a change in a corporate position.
Some of our operations are subject to restrictions on the number of gaming positions we may have, and the maximum wagers allowed to be placed by our customers.
Some of our operations are subject to restrictions on the number of gaming positions we may have, the maximum wagers allowed to be placed by our customers, and restrictions on the hours of operation.
Newport is an HRM entertainment venue that includes a simulcast area, food and beverage offerings, and retail sports betting. Turfway Park Racing & Gaming ("Turfway Park") opened in September 2022 in Northern Kentucky. Turfway Park is a state-of-the-art live thoroughbred racing and HRM entertainment venue with an event center, food and beverage offerings, and retail sports betting.
Newport is an HRM entertainment venue that includes a simulcast area, food and beverage offerings, and a retail sportsbook. Turfway Park Racing & Gaming ("Turfway Park") opened in September 2022 in Northern Kentucky. Turfway Park is a state-of-the-art live thoroughbred racing and HRM entertainment venue with an event center, food and beverage offerings, and a retail sportsbook.
Legalized gambling is currently permitted in various forms in many states and Canada. Other jurisdictions could legalize gambling in the future, and established gaming jurisdictions could award additional gaming licenses or permit the expansion of existing gaming operations.
Legalized gambling is currently permitted in various forms in many states in the U.S. Additional states in the U.S. could legalize gambling in the future, and established gaming jurisdictions could award additional gaming licenses or permit the expansion of existing gaming operations.
Calder is located on 54 acres of land, and the Company may sell 15-20 acres of this land in the future for retail development. Indiana The Terre Haute Casino Resort ("Terre Haute") gaming entertainment venue was opened in April 2024 and a luxury hotel was opened in May 2024 in Terre Haute, Indiana.
Calder is located on 54 acres of land, and the Company may sell 15-20 acres of this land in the future for retail development. Indiana The Terre Haute Casino Resort ("Terre Haute") was opened by the Company in April 2024 and a hotel was opened by the Company in May 2024 in Terre Haute, Indiana.
The safety of our team members, customers, and community remains a top priority, and we have established safety programs across all our properties to ensure best practices are continuously identified and implemented. Governmental Regulations and Potential Legislative Changes We are subject to various federal, state, local, and international laws and regulations that affect our businesses.
The safety of our team members, customers, and community remains a top priority, and we have established safety programs across all our properties. Governmental Regulations and Potential Legislative Changes We are subject to various federal, state, local, and international laws and regulations that affect our businesses.
Western Kentucky Ellis Park Racing & Gaming ("Ellis Park") was acquired by the Company in September 2022 and is located five miles from Evansville, Indiana. Ellis Park is a live thoroughbred racing and HRM entertainment venue with food and beverage offerings and retail sports betting.
Western Kentucky Ellis Park Racing & Gaming ("Ellis Park") was acquired by the Company in September 2022 and is located five miles from Evansville, Indiana. Ellis Park is a live thoroughbred racing and HRM entertainment venue with food and beverage offerings, a retail sportsbook, and a simulcast wagering area.
Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other Securities and Exchange Commission ("SEC") filings, and any amendments to those reports and any other filings that we file with or furnish to the SEC under the Securities Exchange Act of 1934 are made available free of charge on our website ( www.churchilldownsincorporated.com ) as soon as reasonably practicable after we electronically file the materials with the SEC and are also available at the SEC’s website at www.sec.gov . 15
We license the use of these service marks and derive revenue from such license agreements. 14 Available Information Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other Securities and Exchange Commission ("SEC") filings, and any amendments to those reports and any other filings that we file with or furnish to the SEC under the Securities Exchange Act of 1934 are made available free of charge on our website ( www.churchilldownsincorporated.com ) as soon as reasonably practicable after we electronically file the materials with the SEC and are also available at the SEC’s website at www.sec.gov . 15
We also compete with daily fantasy sports gaming companies that are expanding into mobile and online sports betting and iGaming, international sports betting businesses looking to expand into the U.S. market, and other forms of legal and illegal sports betting and iGaming operations.
We also compete with daily fantasy sports gaming companies that are expanding into mobile and online sports betting and iGaming, international sports betting businesses looking to expand into the U.S. market, and other forms of legal and illegal sports betting and iGaming operations. Gaming Our Gaming properties operate in highly competitive environments.
The expansion included a 123-room hotel, a VIP gaming area, a new sports bar, a stage for live entertainment, and an upscale-casual restaurant and bar. 5 Derby City Gaming Downtown ("DCG Downtown") opened in December 2023 in downtown Louisville, Kentucky.
Derby City Gaming was expanded in the second quarter of 2023. The expansion included a 123-room hotel, a VIP gaming area, a sports bar, a stage for live entertainment, and an upscale restaurant and bar. 5 Derby City Gaming Downtown ("DCG Downtown") opened in December 2023 in downtown Louisville, Kentucky.
The Wagering Services and Solutions segment was previously known as the TwinSpires segment. We aggregate our other businesses as well as certain corporate operations in All Other. We report net revenue and operating expense associated with these reportable segments and other information about these segments in Part II, Item 8. Financial Statements and Supplementary Data, contained within this Report.
We aggregate our other businesses as well as certain corporate operations in All Other. We report net revenue and operating expense associated with these reportable segments and other information about these segments in Part II, Item 8. Financial Statements and Supplementary Data, contained within this Report.
Southwestern Kentucky Oak Grove Racing, Gaming & Hotel ("Oak Grove") opened in 2020 and is located approximately one-hour north of Nashville, Tennessee. Oak Grove is a premier state-of-the-art live harness racing and HRM entertainment venue with a 128-room hotel, a simulcast center, event center, an amphitheater, recreational vehicle park, equestrian center, and retail sports betting.
Southwestern Kentucky Oak Grove Racing, Gaming & Hotel ("Oak Grove") opened in 2020 and is located approximately one-hour north of Nashville, Tennessee. Oak Grove is a premier live harness racing and HRM entertainment venue with a 151-room hotel, an event center, an amphitheater, recreational vehicle park, equestrian center, a retail sportsbook and a simulcast wagering area.
Riverwalk Casino Hotel is located in Vicksburg, Mississippi, and is a gaming facility and hotel with two dining facilities and a retail sportsbook. New York Del Lago Resort and Casino ("del Lago") was acquired by the Company in November 2022 and is located in Waterloo, New York.
Riverwalk Casino Hotel in Vicksburg, Mississippi is a gaming facility with a hotel, food and beverage offerings, and a retail sportsbook. New York Del Lago Resort and Casino ("del Lago") in Waterloo, New York was acquired by the Company in November 2022. Del Lago is a gaming facility with a hotel, food and beverage offerings, and a retail sportsbook.
Exacta is a leading provider of central determinant system technology in HRMs across the country. Exacta's system architecture supports multiple game vendors and virtually unlimited math modeling capabilities on a single central determinant system enabling Exacta to deliver a diverse gaming library to Company owned and third-party HRM entertainment venues in Virginia, Kentucky, Wyoming, New Hampshire, and is expanding internationally.
Exacta's system architecture supports multiple game vendors and virtually unlimited math modeling capabilities on a single central determinant system enabling Exacta to deliver a diverse gaming library to Company owned and third-party HRM entertainment venues in Virginia, Kentucky, Wyoming, New Hampshire, Kansas, and Alabama. Exacta is also expanding internationally.
(b) The Company's retail sports betting business at its wholly owned properties is included in the Wagering Services and Solutions segment. Wholly owned gaming properties Florida Calder Casino ("Calder") in Miami Gardens, Florida is located near Hard Rock Stadium, home of the Miami Dolphins. Calder offers two dining facilities and an entertainment venue.
(b) The Company's retail sports betting business at its wholly owned properties is included in the Wagering Services and Solutions segment. Wholly owned gaming properties Florida Calder Casino ("Calder") in Miami Gardens, Florida is located near Hard Rock Stadium, home of the Miami Dolphins. Calder is a gaming facility with food and beverage offerings and an entertainment venue.
Louisiana Fair Grounds Race Course & Slots ("Fair Grounds") is located in New Orleans, Louisiana. Fair Grounds is a gaming facility and racecourse with a bar, simulcast facility, dirt and turf track, and stabling area. Fair Grounds conducts approximately 80 live racing days each year.
Louisiana Fair Grounds Race Course & Slots ("Fair Grounds") in New Orleans, Louisiana is a gaming facility and racecourse with food and beverage offerings, a simulcast wagering area, dirt and turf track, and stabling area. Fair Grounds conducts approximately 75 live racing days each year.
The facility includes clubhouse and grandstand seating for approximately 5,000 guests, a general admissions area, several dining facilities, and a retail sportsbook. The stable area consists of barns that can accommodate approximately 1,900 horses and living quarters for approximately 130 people. Fair Grounds also owns and operates 15 OTBs, 13 of which have over 500 HRMs.
The facility includes clubhouse and grandstand seating for approximately 5,000 guests, a general admissions area, food and beverage offerings, and a retail sportsbook. The stable area consists of barns that can accommodate approximately 1,900 horses and living quarters for approximately 130 people. Fair Grounds also owns and operates 13 OTBs.
Del Lago is a gaming facility and a hotel with several dining options and a retail sportsbook. Pennsylvania Presque Isle Downs and Casino ("Presque Isle") is located in Erie, Pennsylvania. Presque Isle is a gaming facility with three dining facilities, a retail sportsbook, an entertainment venue and thoroughbred racetrack that conducts approximately 80 live racing days each year.
Pennsylvania Presque Isle Downs and Casino ("Presque Isle") in Erie, Pennsylvania is a gaming facility with food and beverage options, an entertainment venue, a retail sportsbook, and thoroughbred racetrack that conducts approximately 80 live racing days each year.
In April 2024, the Company completed the sale of 49% of United Tote, a wholly owned subsidiary of CDI, to NYRA Content Management Solutions, LLC ("NYRA"), a subsidiary of the New York Racing Association, Inc. Exacta Exacta was acquired by the Company on August 22, 2023.
In April 2024, the Company completed the sale of 49% of United Tote, a wholly owned subsidiary of CDI, to NYRA Content Management Solutions, LLC ("NYRA"), a subsidiary of the New York Racing Association, Inc. Exacta Exacta was acquired by the Company in August 2023. Exacta is a leading provider of central determinant system technology in HRMs across the country.
The demographic profile of our guests, global television viewership, and long-running nature of this iconic event are attractive to sponsors and corporate partners, especially those with luxury and/or marquee brands. Churchill Down Racetrack conducts approximately 80 live race days each year.
The demographic profile of our guests, global television viewership, and long-running nature of this iconic event are attractive to sponsors and corporate partners, especially those with luxury and/or marquee brands.
Ocean Downs is a gaming facility with several dining options, a retail sportsbook, and a racetrack that conducts approximately 45 live harness racing days each year. Mississippi Harlow’s Casino Resort and Spa is located in Greenville, Mississippi, and is a gaming facility and hotel with two dining facilities and a retail sportsbook.
Maryland Ocean Downs Casino and Racetrack ("Ocean Downs") in Berlin, Maryland is a gaming facility with food and beverage offerings, a retail sportsbook, and a racetrack that conducts approximately 45 live harness racing days each year. Mississippi Harlow’s Casino Resort and Spa in Greenville, Mississippi is a gaming facility with a hotel, food and beverage offerings, and a retail sportsbook.
Derby City Gaming is a state-of-the-art HRM facility located at the Churchill Downs Racetrack auxiliary training facility and has a center bar with large format televisions, two food venues, an open-air gaming patio, and retail sports betting. Derby City Gaming was expanded in the second quarter of 2023.
Kentucky Louisville Derby City Gaming & Hotel ("Derby City Gaming") opened in September 2018 in Louisville, Kentucky. Derby City Gaming is a state-of-the-art HRM facility located at the Churchill Downs Racetrack auxiliary training facility and has a center bar with large format televisions, two food venues, an open-air gaming patio, and a retail sportsbook.
The following table summarizes key information regarding our gaming properties: 7 State Property Acres Casino Space (Sq. ft.) Slots and Video Lottery Terminals (a) Table Games Hotel Rooms Retail Sportsbook (b) Wholly owned Florida Calder Casino 54 106,000 1,070 6 N/A N/A Indiana Terre Haute Casino Resort 48 36,000 1,040 36 122 ü Iowa Hard Rock Iowa 15 41,000 670 25 54 ü Louisiana Fair Grounds Race Course and Slots and Video Services LLC 145 33,000 2,040 N/A N/A ü Maine Oxford Casino and Hotel 97 27,000 970 23 107 N/A Maryland Ocean Downs Casino and Racetrack 167 70,000 900 19 N/A ü Mississippi Harlow's Casino Resort and Spa 85 33,000 660 13 105 ü Mississippi Riverwalk Casino Hotel 22 25,000 560 11 76 ü New York del Lago Resort and Casino 83 99,000 1,670 80 205 ü Pennsylvania Presque Isle Downs and Casino 270 61,000 1,540 34 N/A ü Equity Investments Illinois Rivers Casino Des Plaines 21 78,000 1,520 120 N/A ü Ohio Miami Valley Gaming and Racing 120 190,000 2,220 N/A N/A ü Total 799,000 14,860 367 669 (a) Includes HRMs and video poker machines at Fair Grounds Race Course and Slots and Video Services LLC.
The Gaming segment generates revenue and expenses from slot machines, table games, video lottery terminals ("VLTs"), video poker, HRMs, ancillary food and beverage services, hotel services, commission on pari-mutuel wagering, racing event-related services, and other miscellaneous operations. 7 The following table summarizes key information regarding our gaming properties: State Property Acres Casino Space (Sq. ft.) Slots and Video Lottery Terminals (a) Table Games Hotel Rooms Retail Sportsbook (b) Wholly owned Florida Calder Casino 54 53,000 1,070 6 N/A N/A Indiana Terre Haute Casino Resort 48 36,000 1,040 38 122 ü Iowa Hard Rock Iowa 15 37,000 680 16 54 ü Louisiana Fair Grounds Race Course and Slots and Video Services LLC 145 33,000 1,540 N/A N/A ü Maine Oxford Casino and Hotel 97 40,000 955 22 107 ü Maryland Ocean Downs Casino and Racetrack 167 70,000 900 19 N/A ü Mississippi Harlow's Casino Resort and Spa 85 33,000 660 13 105 ü Mississippi Riverwalk Casino Hotel 22 25,000 560 11 76 ü New York del Lago Resort and Casino 83 99,000 1,665 80 205 ü Pennsylvania Presque Isle Downs and Casino 270 61,000 1,525 31 N/A ü Equity Investments Illinois Rivers Casino Des Plaines 21 78,000 1,510 120 N/A ü Ohio Miami Valley Gaming and Racing 120 81,000 2,230 N/A N/A ü Total 646,000 14,335 356 669 (a) Includes video poker machines at Fair Grounds Race Course and Slots and Video Services LLC.
The summary judgment, which was certified as final for purposes of appeal, was entered on March 18, 2024, and the Company, along with other interested parties including the Louisiana Racing Commission, filed a joint motion for a suspensive appeal, which was entered on March 26, 2024.
The summary judgment was entered on March 18, 2024, and the Company, along with other interested parties including the Louisiana Racing Commission, filed a joint motion for a suspensive appeal on March 26, 2024. The suspensive appeal allowed the continued operation of HHR during the pendency of the appeal before the Louisiana Supreme Court.
Video Services LLC ("VSI") is the owner and operator of video poker machines in 13 of those OTBs in Louisiana. Maine Oxford Casino and Hotel is located in Oxford, Maine and is a gaming facility with a hotel and a dining facility. 8 Maryland Ocean Downs Casino and Racetrack ("Ocean Downs") is located in Berlin, Maryland.
Video Services LLC ("VSI") is the owner and operator of video poker machines in all 13 of those OTBs in Louisiana. 8 Maine Oxford Casino and Hotel in Oxford, Maine is a gaming facility with a hotel, food and beverage offerings, and a retail sportsbook.
Removal of the ban gave states the authority to authorize sports wagering. Sports betting has been authorized and is operational in thirty-eight states and the District of Columbia as of December 31, 2024. Each state has different structures for the number of allowable industry participants, license fees, taxes, and other operational requirements.
Sports betting has been authorized and is operational in thirty-nine states and the District of Columbia as of December 31, 2025. Each state has different structures for the number of allowable industry participants, license fees, taxes, and other operational requirements and some states have recently passed legislature to increase taxes related to sports betting.
Our ability to compete is substantially dependent on the racing calendar, number of horses racing, and purse sizes. As a content provider, we compete for wagering dollars in the simulcast market with other racetracks conducting races at or near the same times as our races.
As a racetrack operator, we compete for horses with other racetracks running live racing meets at or near the same time as our races. Our ability to compete is substantially dependent on the racing calendar, number of horses racing, and purse sizes.
Our Gaming properties compete to a lesser extent with state-sponsored lotteries, off-track wagering, card parlors, online gambling, and other forms of legalized gaming in the U.S. Human Capital We believe our people are essential to our operations and fundamental to the long-term success of our Company.
Our brick-and-mortar casinos compete with traditional and Native American casinos, VLTs, state sponsored lotteries, online gambling, and other forms of legalized and illegal gaming in the U.S. and other jurisdictions. Human Capital - Our People We believe our people are essential to our operations and fundamental to the long-term success of our Company.
Wagering Services and Solutions The Wagering Services and Solutions segment includes the revenue and expenses from pari-mutuel wagers through TwinSpires, our retail and online sports betting business, United Tote Company ("United Tote"), and Exacta Systems, LLC ("Exacta"). 6 TwinSpires TwinSpires is an advance deposit wagering ("ADW") business that operates the online horse racing wagering business for TwinSpires.com, BetAmerica.com, and other white-label platforms, facilitates high dollar wagering by certain customers, and provides the Bloodstock Research Information Services platform for horse racing statistical data.
TwinSpires TwinSpires is an advance deposit wagering ("ADW") business that operates the online horse racing wagering business for TwinSpires.com, BetAmerica.com, and other white-label platforms, facilitates high dollar wagering by certain customers, and provides the Bloodstock Research Information Services platform for horse racing statistical data.
We have a state-of-the-art equine medical center and quarantine barns on the backside area of Churchill Downs Racetrack which reinforces our ongoing commitment to equine safety and supports our long-term international growth strategy. The Churchill Downs Racetrack facility also includes a simulcast wagering facility.
We have a saddling paddock and our stable area has barns sufficient to accommodate 1,400 horses and a 114-room dormitory for backside personnel. We have a state-of-the-art equine medical center and quarantine barns on the backside area of Churchill Downs Racetrack which reinforces our ongoing commitment to equine safety and supports our long-term international growth strategy.
The Rose Gaming Resort ("The Rose") was opened in November 2024 in Dumfries, Virginia with a 102-room hotel, eight food and beverage options, and 1,650 HRMs. Rosie’s Richmond is located in Richmond, Virginia and features 750 HRMs, a simulcast wagering area, food & beverage offerings, and a center bar.
Virginia Northern Virginia The Rose Gaming Resort ("The Rose") in Dumfries, Virginia was opened by the Company in November 2024 with 1,650 HRMs, a 102-room hotel, eight food and beverage offerings, and a simulcast wagering area. The Company consolidated the Dumfries HRM venue in Dumfries, Virginia into The Rose in August 2025.
The owner of a property may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property. 14 Marks and Intellectual Property We hold numerous state and federal service mark registrations on specific names and designs in various categories including the entertainment business, apparel, paper goods, printed matter, housewares, and glass.
Marks and Intellectual Property We hold numerous state and federal service mark registrations on specific names and designs in various categories including the entertainment business, apparel, paper goods, printed matter, housewares, and glass.
Gaming laws may also be designed to protect and maximize state and local revenue derived through taxes and licensing fees imposed on industry participants as well as to enhance economic development and tourism. To accomplish these public policy goals, gaming laws establish procedures to ensure that participants in the industry meet certain standards of character and fitness.
In the U.S., gaming laws are generally designed to protect consumers and the viability and integrity of the industry. Gaming laws may also be designed to protect and maximize state and local revenue derived through taxes and licensing fees imposed on industry participants as well as to enhance economic development and tourism.
Wagering Services and Solutions TwinSpires TwinSpires competes with other ADW businesses for both customers and racing content, as well as brick-and-mortar racetracks, casinos, OTBs, and other forms of legal and illegal sports betting. Sports Betting Our sports betting business competes for customers with retail, mobile, and online offerings from commercial brick-and-mortar casinos and racetracks.
Our HRM entertainment venues in Kentucky, Virginia, and New Hampshire compete with regional casinos in the area and other forms of legal and illegal gaming. Wagering Services and Solutions TwinSpires TwinSpires competes with other ADW businesses for both customers and racing content, as well as brick-and-mortar racetracks, casinos, OTBs, and other forms of legal and illegal sports betting.
Operational Requirements In most jurisdictions, we are subject to certain requirements and restrictions on how we must conduct our gaming operations. In certain states, we are required to give preference to local suppliers and include minority and women-owned businesses and organized labor in construction projects to the maximum extent practicable.
In certain states, we are required to give preference to local suppliers and include minority and women-owned businesses and organized labor in construction projects to the maximum extent practicable. We may be required to give employment preference to minorities, women, and in-state residents in certain jurisdictions.
Terre Haute has 1,040 slot machines, 36 table games, a state-of-the-art sportsbook, and offers regionally inspired food and beverage amenities. Iowa The Company acquired Hard Rock Hotel and Casino in Sioux City, Iowa ("Hard Rock Iowa") in November 2022, which is a gaming facility and hotel with food and beverage offerings, a retail sportsbook, and entertainment venues.
Terre Haute is a gaming facility with food and beverage offerings and a retail sportsbook. Iowa Hard Rock Hotel and Casino in Sioux City, Iowa ("Hard Rock Iowa") was acquired in November 2022 and is a gaming facility with a hotel, food and beverage offerings, entertainment venues, and a retail sportsbook.
We also own 83 acres of land at our auxiliary training facility, which is five miles from Churchill Downs Racetrack. In 2002, we transferred title of the Churchill Downs Racetrack facility to the City of Louisville, Kentucky and entered into a 30-year lease for the facility as part of the financing of improvements to the Churchill Downs Racetrack facility.
In 2002, we transferred title of the Churchill Downs Racetrack facility to the City of Louisville, Kentucky and entered into a 30-year lease for the facility as part of the financing of improvements to the Churchill Downs Racetrack facility. We can reacquire the facility at any time for $1.00 subject to the terms of the lease.
Equity Investments Illinois The Company has a 61.3% equity ownership in Midwest Gaming Holdings, LLC ("Midwest Gaming"), the parent company of Rivers Casino Des Plaines ("Rivers Des Plaines"), located in Des Plaines, Illinois.
Equity Investments Illinois The Company has a 61.3% equity ownership in Midwest Gaming Holdings, LLC ("Midwest Gaming"), the parent company of Rivers Casino Des Plaines ("Rivers Des Plaines"). Rivers Des Plaines in Des Plaines, Illinois is a gaming facility with food and beverage offerings, a ballroom for private events and live entertainment, and a retail sportsbook.
The presence of, or failure to remediate properly, such substances may materially adversely affect the ability to sell or rent such property or to borrow funds using such property as collateral.
The presence of, or failure to remediate properly, such substances may materially adversely affect the ability to sell or rent such property or to borrow funds using such property as collateral. The owner of a property may be subject to claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.
We can reacquire the facility at any time for $1.00 subject to the terms of the lease. Since 2021, we have completed several major multi-year capital investments at Churchill Downs Racetrack: The Homestretch Club, the First Turn Experience, the Jockey Club Suites renovation, and the Paddock Project.
Since 2021, we have completed several major multi-year capital investments at Churchill Downs Racetrack: The Homestretch Club, the First Turn Club, the Jockey Club Suites renovation, the Paddock Project, and the Starting Gate Pavilion and Courtyard. These investments transformed key areas of Churchill Downs Racetrack that enhance the experience for our guests.
We may be required to give employment preference to minorities, women, and in-state residents in certain jurisdictions. Our ability to conduct certain types of games, introduce new games or move existing games within our facilities may be restricted or subject to regulatory review and approval.
Operational Requirements In most jurisdictions, we are subject to certain requirements and restrictions on how we must conduct our gaming operations. Our ability to conduct certain types of games, introduce new games, reduce the number of games, or move existing games within our facilities may be restricted or subject to regulatory review and approval.
Changes in the form of new legislation or regulatory activity at the state or federal level could adversely impact our mobile and online ADW business. 11 Sports Betting and iGaming Regulations and Potential Legislative Changes In May 2018, the United States Supreme Court struck down the 1992 Professional and Amateur Sports Protection Act, which had effectively banned sports wagering in most states.
Sports Betting and iGaming Regulations and Potential Legislative Changes In May 2018, the United States Supreme Court struck down the 1992 Professional and Amateur Sports Protection Act, which had effectively banned sports wagering in most states. Removal of the ban gave states the authority to authorize sports wagering.
Churchill Downs Racetrack has one of the largest 4K video boards in the world sitting 80 feet above the ground and measuring 171 feet wide by 90 feet tall. This video board provides views of the finish line and the entire race for on-track guests, including those in the infield and guests along the entire front side of the racetrack.
Churchill Downs Racetrack conducts approximately 80 live race days each year Churchill Downs Racetrack has one of the largest 4K video boards in the world sitting 80 feet above the ground and measuring 171 feet wide by 90 feet tall.
Owensboro Racing & Gaming ("Owensboro") opened in February 2025 in Owensboro, Kentucky with 600 HRMs, a retail sportsbook, simulcast wagering, and multiple food and beverage offerings. Virginia Colonial Downs Racetrack ("Colonial Downs") and six historical racing entertainment venues across Virginia were acquired by the Company in November 2022.
Owensboro Racing & Gaming ("Owensboro") opened in February 2025 in Owensboro, Kentucky with 600 HRMs, food and beverage offerings, a retail sportsbook, and a simulcast wagering area.
Our approach emphasizes a clear purpose and strategy, setting ambitious goals, fostering accountability, continuously assessing and advancing talent, and driving a leadership-led culture of growth. We provide opportunities for team members to expand their expertise within their current roles while also encouraging skill development across different areas of the Company.
We provide opportunities for team members to expand their expertise within their current roles while also encouraging skill development across different areas of the Company.
Compensation, Benefits, Safety and Wellness We strive to offer competitive salaries and wages while providing comprehensive health and retirement benefits to eligible team members.
Compensation, Benefits, Safety and Wellness We strive to offer competitive salaries and wages and provide comprehensive health and retirement benefits, as well as voluntary benefits and paid time-off programs to eligible team members. We also provide supplementary benefits aimed at promoting physical, emotional, and financial well-being.
Corporate Corporate includes miscellaneous and other revenue, compensation expense, professional fees, and other general and administrative expense not allocated to our segments. Competition Overview We operate in a highly competitive industry with many participants, some of which have financial and other resources that are greater than ours.
Corporate Corporate includes miscellaneous and other revenue, compensation expense, professional fees, and other general and administrative expense not allocated to our segments. Competition Overview We operate in a highly competitive industry. The industry faces competition for discretionary consumer spending from a variety of sources, including spectator sports, sports wagering, and other entertainment and gaming options.
Marshall Yards Racing & Gaming ("Marshall Yards") is expected to open in the first quarter 2026 in Calvert City, Kentucky. The new state-of-the-art HRM entertainment venue will have 250 HRMs, a sports bar, retail sportsbook, and a simulcast center.
Marshall Yards Racing & Gaming ("Marshall Yards") held its grand opening on February 25, 2026 in Calvert City, Kentucky. The new state-of-the-art HRM entertainment venue has 225 HRMs, food and beverage offerings, a retail sportsbook, and a simulcast wagering area.
In recent years, competition has increased as more states legalize gaming and allow slot machines at racetracks with mandatory purse contributions. Our HRM entertainment venues in Kentucky, Virginia, and New Hampshire compete with regional casinos in the area and other forms of legal and illegal gaming.
As a content provider, we compete for wagering dollars in the simulcast market with other racetracks conducting races at or near the same times as our races. In recent years, competition has increased as more states legalize gaming and allow slot machines at 9 racetracks with mandatory purse contributions.
Under these arrangements, we typically provide an ADW platform and related operational services while the third party typically provides the brand, marketing, and limited customer functions. Sports Betting Our sports betting business includes the results of our retail sportsbooks at our wholly owned properties and online sports betting through third parties.
Under these arrangements, we typically provide an ADW platform and related operational services while the third-party typically provides the brand, marketing, and limited customer functions. United Tote United Tote manufactures and operates pari-mutuel wagering systems for racetracks, OTBs, and other pari-mutuel wagering businesses.
MVG is a gaming entertainment venue with a harness racetrack, a racing simulcast center, multiple food and drink offerings, and a retail sportsbook. All Other We have aggregated our captive insurance company that was established in April 2024 as well as certain corporate operations in All Other to reconcile to consolidated results.
Ohio The Company has a 50% equity investment in Miami Valley Gaming and Racing ("MVG"). MVG is located just north of Cincinnati, Ohio and is a gaming entertainment venue with a harness racetrack, food and beverage offerings, a simulcast wagering area, and a retail sportsbook. All Other All Other includes our captive insurance company and certain corporate operations.
We have executed strategic market access agreements with Bet365 in Pennsylvania, Golden Nugget in Indiana, and various market access partners in Kentucky. The Company also operates retail sports betting at certain of its racetracks and HRM and gaming facilities. United Tote United Tote manufactures and operates pari-mutuel wagering systems for racetracks, OTBs, and other pari-mutuel wagering businesses.
Sports Betting Our sports betting business includes the results of our retail sportsbooks at our wholly owned properties and online sports betting through third parties. We have executed strategic third-party market access agreements with Bet365 in Pennsylvania, Golden Nugget in Indiana, and with various market access partners in Kentucky.
Colonial Downs has a dirt track, the widest turf track oval in North America, a simulcast area, food and beverage offerings, and two off-track betting facilities ("OTBs"). Colonial Downs conducts approximately 30 live race days each year with plans to increase up to 50 live race days per year.
Colonial Downs conducts approximately 30 - 40 live race days each year with plans to increase up to 50 live race days per year. The Company created the Virginia Derby in March of each year as a qualifying race to the Kentucky Derby.
Our highest level of seasonal employment occurs in the second quarter, coinciding with the Kentucky Derby. As of the same date, approximately 840 full-time team members were covered by 12 collective bargaining agreements. We have not experienced any material operational disruptions due to labor disputes. Talent Acquisition, Development and Retention We are committed to attracting, developing, and retaining top talent.
As of December 31, 2025, we had approximately 9,000 team members, including approximately 6,600 that are full-time. We also have seasonal employees primarily in the second quarter, coinciding with the Kentucky Derby. As of the same date, approximately 840 of the Company's full-time team members were covered by 11 collective bargaining agreements.
If additional gaming opportunities become available near our racing or gaming operations, such gaming operations could have a material adverse impact on our business. In May 2018, the United States Supreme Court struck down the 1992 Professional and Amateur Sports Protection Act, which had effectively banned sports wagering in most states.
If additional gaming opportunities become available near our racing or gaming operations, such gaming operations could have a material adverse impact on our business. Live and Historical Racing In 2025, approximately 29,000 thoroughbred horse races were conducted in the U.S., which was down 4.7% compared to 2024.
Rosie’s Richmond will be expanded by the third quarter of 2025 to add an additional 450 HRMs. Rosie’s Hampton is located in Hampton, Virginia and features 700 HRMs, a simulcast wagering area, and a food & beverage outlet.
Central Virginia Rosie’s Richmond in Richmond, Virginia was opened in June 2019 and acquired by the Company in November 2022. Rosie's Richmond was expanded in 2025 and now features 1,200 HRMs, food and beverage offerings, a center bar, and a simulcast wagering area.
Chasers is a charitable gaming facility that offers poker and a variety of table games.
Chasers Poker Room ("Chasers") in Salem, New Hampshire was acquired in 2022. Chasers is a charitable gaming facility that offers poker and a variety of table games. Wagering Services and Solutions The Wagering Services and Solutions segment includes the revenue and expenses from TwinSpires, United Tote Company ("United Tote"), Exacta Systems, LLC ("Exacta"), and sports betting.
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The facility also has permanent lighting to accommodate night races. We have a saddling paddock and our stable area has barns sufficient to accommodate 1,400 horses and a 114-room dormitory for backside personnel.
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This video board provides views of the finish line and the entire race for on-track guests, including those in the infield and guests along the entire front side of the racetrack. The facility also has permanent lighting to accommodate night races.
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These investments transformed key areas of Churchill Downs Racetrack that enhance the experience for our guests. The Paddock Project was completed for the 150th running of the Kentucky Derby. The redesigned area improved the flow of guests throughout the paddock.
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The Churchill Downs Racetrack facility also includes a simulcast wagering area. We also own 83 acres of land at our auxiliary training facility, which is five miles from Churchill Downs Racetrack.
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The Paddock Project created a larger paddock walking ring for viewing the horses prior to the races, a new Paddock Club in the area on the first floor under the Twin Spires providing views of the paddock and views of the tunnel that the horses walk through, new hospitality and other amenities for guests in certain areas of the third floor clubhouse seats, and new terraces overlooking the paddock. 4 The Company is also investing up to $85 million to renovate the Starting Gate Pavilion and Courtyard to enhance the existing grandstand and provide improved amenities for the 151st Kentucky Derby in May 2025.
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The Starting Gate Pavilion and Courtyard was completed for the 151st running of the Kentucky Derby.
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(b) The Company plans to open Marshall Yards Racing & Gaming in the first quarter of 2026. (c) The Company opened Owensboro Racing & Gaming in February 2025. (d) The Company plans to build a new charitable gaming facility to accommodate HRMs and table games.
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The renovations transformed existing outdoor aluminum bleachers into updated seating options including covered and uncovered stadium-style seats as well as rail boxes along the dirt track’s outer rail that offer a "trackside" seating experience where guests can watch horses break from the Kentucky Derby Starting Gate.
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(e) The Company plans to expand Rosie's Richmond HRM venue to accommodate a total of 1,200 HRMs in the third quarter of 2025. (f) The Company plans to open the Roseshire in Henrico County in the fourth quarter of 2025. Kentucky Louisville Derby City Gaming & Hotel ("Derby City Gaming") opened in September 2018 in Louisville, Kentucky.
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The renovations created a more upscale social environment by converting 4 the existing second-floor amenity area into a covered outdoor garden environment with new concessions, bars and wagering windows.
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The Company has also created the Virginia Derby to be held in March 2025 as a qualifying race to the Kentucky Derby. Rosie's Emporia was opened in September 2023 in Emporia, Virginia with 150 HRMs and a restaurant and bar.
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The Company is investing up to $30 million to renovate the existing Finish Line Suites and The Mansion to enhance the existing areas and provide improved amenities for the 152nd Kentucky Derby in May 2026.
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Roseshire in Henrico County is expected to open in the fourth quarter of 2025 as a state-of-the-art HRM entertainment venue in Henrico County, Virginia. Roseshire will open with 175 HRMs. New Hampshire Chasers Poker Room ("Chasers") was acquired in 2022 and is in Salem, New Hampshire.
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The Company is also investing $280-$300 million to build a new building on the first turn of the Churchill Downs Racetrack between the First Turn Club and the Skye Terrace. The Company anticipates construction of this new building will begin following the 2026 Kentucky Derby and will be completed by the 2028 Kentucky Derby.
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Gaming The Gaming segment includes revenue and expenses for the casino properties and associated racetracks which support the casino license. The Gaming segment generates revenue and expenses from slot machines, table games, video lottery terminals ("VLTs"), video poker, HRMs, ancillary food and beverage services, hotel services, commission on pari-mutuel wagering, racing event-related services, and other miscellaneous operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIncreased employee turnover, changes in the availability of our workers, or labor shortages in our supply chain could result in increased costs and impact our ability to fully staff our operations, which could negatively affect our financial condition, results of operations, or cash flows. 17 Our Company faces significant competition, and we expect competition levels to increase We face an increasingly high degree of competition among a large number of participants operating from physical locations and/or through online or mobile platforms, including destination casinos, riverboat casinos; dockside casinos; land-based casinos; video lottery; iGaming; sports betting; gaming at taverns in certain states, such as Illinois; gaming at truck stops, gas stations, and other establishments in certain states, such as Louisiana, Pennsylvania, Virginia, and Kentucky; historical horse racing in Kentucky; sweepstakes and poker machines not located in casinos; fantasy sports; Native American gaming; and other forms of gaming in the U.S.
Biggest changeEmployee turnover, changes in the availability of our workers, or labor shortages in our supply chain could result in increased costs and impact our ability to fully staff our operations, which could negatively affect our financial condition, results of operations, or cash flows. 17 Our Company faces significant competition, and we expect competition levels to increase We face an increasingly high degree of competition among many participants operating from physical locations including land-based casinos, destination casinos, Native American gaming, riverboat casinos and other gaming locations including video lottery, gaming at taverns, truck stops, gas stations and other establishments, historical horse racing venues, sweepstakes and poker machines not located in casinos, and charitable gaming.
For example, the COVID-19 global pandemic resulted in the temporary suspension of operations of all of our wholly owned gaming properties, certain wholly owned racing operations, and the two gaming properties related to our equity investments.
For example, the COVID-19 global pandemic resulted in the temporary suspension of operations of all our wholly owned gaming properties, certain wholly owned racing operations, and two gaming properties related to our equity investments.
Environmental laws and regulations could hold us responsible for the cost of cleaning up hazardous materials contaminating real property that we own or operate (or previously owned or operated) or properties at which we have disposed of hazardous materials, even if we did not cause the contamination. Some of our facilities 22 are subject to CAFO regulations.
Environmental laws and regulations could hold us responsible for the cost of cleaning up hazardous materials contaminating real property that we own or operate (or previously owned or operated) or properties at which we have disposed of hazardous materials, even if we did not cause the contamination. Some of our facilities are subject to CAFO regulations.
If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees or possibly lose our ability to accept credit or debit cards, or other forms of payment from customers which could have a material adverse impact on our business.
If we fail to comply with these rules or requirements, we 23 may be subject to fines and higher transaction fees or possibly lose our ability to accept credit or debit cards, or other forms of payment from customers which could have a material adverse impact on our business.
Any losses we incur that are not adequately covered by insurance may decrease our future operating income, require us to fund replacements or repairs for destroyed property and reduce the funds available for payment of our obligations. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any losses we incur that are not adequately covered by insurance may decrease our future operating income, require us to fund replacements or repairs for destroyed property and reduce the funds available for payment of our obligations. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 26
Anti-gaming conclusions and 24 recommendations of other governmental or quasi-governmental bodies could form the basis for new laws, regulations, and enforcement policies. The extensive regulation by both state and federal authorities of gaming activities also can be significantly affected by changes in the political climate and changes in economic and regulatory policies.
Anti-gaming conclusions and recommendations of other governmental or quasi-governmental bodies could form the basis for new laws, regulations, and enforcement policies. The extensive regulation by both state and federal authorities of gaming activities also can be significantly affected by changes in the political climate and changes in economic and regulatory policies.
The Company's competitors may adopt new technologies and technological advancements, such as using artificial intelligence and machine learning, to pursue new products, services and approaches more quickly, successfully, and effectively than the Company. Our success depends upon new product development and technological advancements, including the development of new wagering platforms and features.
The Company's competitors may adopt new technologies and technological 18 advancements, such as using artificial intelligence and machine learning, to pursue new products, services and approaches more quickly, successfully, and effectively than the Company. Our success depends upon new product development and technological advancements, including the development of new wagering platforms and features.
Our main technological advantage versus potential competitors is our software lead-time in the market and our experience in operating an Internet-based wagering network. It may be difficult to maintain our competitive technological position against current and potential competitors, 18 especially those with greater financial resources.
Our main technological advantage versus potential competitors is our software lead-time in the market and our experience in operating an Internet-based wagering network. It may be difficult to maintain our competitive technological position against current and potential competitors, especially those with greater financial resources.
Any such union organization efforts could cause disruptions in our business and result in significant costs. 23 Legal and Regulatory Risks We face risks related to pending or future legal proceedings and other actions From time to time, we are a party to various lawsuits and judicial and governmental actions.
Any such union organization efforts could cause disruptions in our business and result in significant costs. Legal and Regulatory Risks We face risks related to pending or future legal proceedings and other actions From time to time, we are a party to various lawsuits and judicial and governmental actions.
The successful integration of newly acquired businesses into our operations has required and will continue to require the expenditure of substantial managerial, operating, financial, and other resources and may also lead to a diversion of our attention 21 from our ongoing business concerns.
The successful integration of newly acquired businesses into our operations has required and will continue to require the expenditure of substantial managerial, operating, financial, and other resources and may also lead to a diversion of our attention from our ongoing business concerns.
Inclement weather conditions may deter or prevent customers from reaching the facilities, including our gaming and HRM venues. Climate change could have an impact on longer-term natural weather trends.
Inclement weather conditions may deter or prevent customers from reaching our facilities, including our gaming and HRM venues. Climate change could have an impact on longer-term natural weather trends.
Interruptions in our services or a breach of a customer’s secure data could cause current or potential users to believe that our systems are unreliable, which could permanently harm our reputation and brand.
Interruptions in our services or a breach of a customer’s secure data could cause current or potential users to believe that our systems are insecure or unreliable, which could permanently harm our reputation and brand.
A significant cyber incident, including system failure, security breach, disruption by malware or other damage could interrupt or delay our operations, result in a violation of applicable privacy and other laws, damage our reputation, subject us to litigation, cause a loss of customers or give rise to remediation costs, monetary fines, and other penalties, which could be significant.
A significant cyber incident, including system failure, security breach, disruption by malware or other damage could interrupt or delay our operations, result in a violation of applicable privacy and other laws or contractual obligations, damage our reputation, subject us to litigation, cause a loss of customers or give rise to remediation costs, monetary fines, and other penalties, which could be significant.
If interest in horse racing is lower in the future, it may have a negative impact on revenue and profitability in our Live and Historical Racing segment. In addition, accidents and adverse events that may occur at our racetrack and any reputational damage as a result may negatively impact attendance at our live horse races.
If interest in horse racing is lower in the future, it may have a negative impact on revenue and profitability in our Live and Historical Racing segment. Accidents and adverse events that may occur at our racetrack and any reputational damage as a result may negatively impact attendance at and wagering on our live horse races.
Other factors that could influence our reputation include the quality of the services we offer and public perception of our actions with regard to social issues such as diversity, human rights, and support for local communities. Broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of us or our properties.
Other factors that could influence our reputation include the quality of the services we offer and public perception of our actions regarding social issues such as diversity, human rights, and support for local communities. Broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of us or our properties.
Our control procedures to protect from chargebacks may not be sufficient to protect us from adverse effects on our business or results of operations. Work stoppages and other labor problems could negatively impact our future plans and limit our operational flexibility Some of our employees are represented by labor unions.
Our control procedures to protect from chargebacks may not be sufficient to protect us from adverse effects on our business or results of operations. Work stoppages and other labor problems could negatively impact our properties and limit our operational flexibility Some of our employees are represented by labor unions.
If any of our properties are damaged or if our operations are disrupted or face prolonged closure as a result of weather conditions in the future, or if weather conditions adversely impact general economic or other conditions in the areas in which our properties are located or from which we draw our patrons, the disruption could have a material adverse impact on our business.
If any of our properties are damaged or if our operations are disrupted or face prolonged closure because of weather conditions in the future, or if weather conditions adversely impact general economic or other conditions in the areas in which our properties are located or from which we draw our patrons, the disruption could have a material adverse impact on our business.
These interruptions could also increase the burden on our engineering staff, which, in turn, could delay our introduction of new features and services on our websites and in our casinos. Such incidents could give rise to remediation costs, monetary fines, and other penalties, which could be significant.
These interruptions could also increase the burden on our engineering staff, which, in turn, could delay our introduction of new features and services on our websites and in our casinos. Such incidents could give rise to remediation costs, monetary fines, and other penalties, or other business losses which could be significant.
We face challenges in identifying and completing acquisitions or divestiture opportunities or other development or expansion projects that fit with our strategic objectives. These projects require significant capital commitments and the incurrence of additional debt. These projects also have risks associated with managing and integrating the acquisition or expansion project.
We face challenges in identifying and completing acquisitions or other development or expansion projects that fit with our strategic objectives. These projects require significant capital commitments and the incurrence of additional debt. These projects also have risks associated with managing and integrating the acquisition.
The impact of these risks may cause us not to realize the intended benefits of these capital investments which could have a material adverse impact on our business.
The impact of these risks may cause us to not realize the intended benefits of these capital investments or divestitures which could have a material adverse impact on our business.
A disruption or failure in our technology systems or operations in the event of a cyber attack, major earthquake, weather event, terrorist attack, or other catastrophic event could interrupt our operations, damage our properties, and reduce the number of customers who visit our facilities in the affected areas.
A disruption or failure in our technology or technology systems in the event of a cybersecurity incident, major earthquake, weather event, terrorist attack, or other catastrophic event could interrupt our operations, damage our properties, and reduce the number of customers who visit our facilities in the affected areas.
As a result of these covenants, we are limited in the manner in which we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs.
As a result of these covenants, we are limited in the way we conduct our business, and we may be unable to engage in favorable business activities or finance future operations or capital needs.
While we are constantly evaluating our security precautions in an effort to ensure the safety of the public, no security measures can guarantee safety and there can be no assurances of avoiding potential liabilities.
While we are constantly evaluating our security precautions to ensure the safety of the public, no security measures can guarantee safety and there can be no assurances of avoiding potential liabilities.
Flooding, blizzards, windstorms, earthquakes, hurricanes, or other weather conditions could adversely affect our casino and horse racing locations. We maintain insurance coverage that may cover certain costs that we incur as a result of some natural disasters, which coverage is subject to deductibles, exclusions, and limits on maximum benefits.
Flooding, blizzards, windstorms, earthquakes, hurricanes, or other weather conditions could adversely affect our casino and horse racing locations. We maintain insurance coverage that may cover certain costs that we incur because of natural disasters, which coverage is subject to deductibles, exclusions, and limits on maximum benefits.
Our business may be subject to fluctuations due to seasonality and inclement weather, including as a result of climate change, that could result in volatility and have an adverse effect on our operating results Unfavorable weather conditions, including extremely high and low temperatures, heavy rains, high winds, storms, tornadoes, and hurricanes, have caused and may in the future cause events to be canceled and/or attendance to be lower, resulting in reduced wagering.
Our business may be subject to fluctuations due to seasonality and inclement weather that could result in volatility and have an adverse effect on our operating results Unfavorable weather conditions, including extremely high and low temperatures, heavy rains and snow, high winds, storms, tornadoes, and hurricanes, have caused and may in the future cause events to be canceled and/or attendance to be lower, resulting in reduced wagering.
For example, we've announced multiple major multi-year capital investments to transform key areas of Churchill Downs Racetrack, as well as other capital investments in new venues. Future development projects may require significant capital commitments and the incurrence of additional debt, which could have a material adverse impact on our business.
For example, we've announced multi-year capital investments to transform key areas of Churchill Downs Racetrack, as well as other capital investments in HRM entertainment venues. Future development projects may require significant capital commitments and the incurrence of 22 additional debt, which could have a material adverse impact on our business.
Our operations rely heavily on technology services, and catastrophic events and system failures with respect to these technology services could cause a significant and continued disruption to our operations We rely on information technology and other systems to manage our business.
Our operations rely heavily on technology services, and catastrophic events, system failures, errors, defects, or disruptions with respect to these technology services could cause a significant and continued disruption to our operations We rely on information technology and other systems to manage our business and our operations rely heavily on technology services.
New, relocated, or expanded operations by other persons could increase competition for our operations and could have a material adverse impact on us. Our operations also face competition from other leisure and entertainment activities.
New, relocated, or expanded gaming operations maintained by other industry participants could increase competition for our operations and could have a material adverse impact on us. Our operations also face competition from other leisure and entertainment activities.
Our systems and processes that are designed to protect customer information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach at a third-party vendor or joint venture partner, may not be successful.
Our systems and processes that are designed to protect personal information and prevent data loss, operational disruption or other cybersecurity incidents, including systems and processes designed to reduce the impact of a security breach at a third-party vendor or joint venture partner, may not be successful.
Security breaches could expose the Company to a risk of loss or misuse of our or our customers’ information, litigation, and potential liability. In addition, cyber incidents that impact the availability, reliability, speed, accuracy, or other proper functioning of our technology systems could impact our operations.
Security incidents could expose the Company to a risk of loss or misuse of confidential information, litigation, regulatory enforcement, and potential liability. Cyber incidents that impact the availability, reliability, speed, accuracy, or other proper functioning of our technology systems could impact our operations.
Reduced access to credit or increased costs could adversely affect our liquidity and capital resources or significantly increase our cost of capital. 25 Our insurance costs may increase, we may not be able to obtain similar insurance coverage in the future, and the extent to which we can recover under our insurance policies for damages sustained at our operating properties in the event of inclement weather and casualty events, all could adversely affect our business We renew our insurance policies on an annual basis.
Our insurance costs may increase, we may not be able to obtain similar insurance coverage in the future, and the extent to which we can recover under our insurance policies for damages sustained at our operating properties in the event of inclement weather and casualty events, all could adversely affect our business We renew our insurance policies on an annual basis.
While these attacks have not had a significant impact on the Company to date, we may continue to experience cyber attacks, and such attacks could have an adverse impact on our business in the future.
While these attacks have not had a material impact on the Company to date, we and/or our third-party service providers may continue to experience cyber-attacks, and such attacks could have an adverse impact on our business in the future.
A major epidemic or pandemic, outbreak of a contagious equine disease, or the threat of such an event, could also adversely affect attendance and could impact the supply chain for our major construction projects resulting in higher costs and delays of the projects.
A major epidemic or pandemic, outbreak of a contagious equine or human disease, or the threat of such an event (as well as measures implemented to address such events or risks), could also adversely affect attendance and could impact the supply chain for our major construction projects resulting in higher costs and delays of the projects.
These costs could include the following: • restructuring charges associated with the acquisitions, • non-recurring transaction costs, including accounting and legal fees, investment banking fees, and recognition of transaction-related costs or liabilities, and • costs of imposing financial and management controls and operating, administrative and information systems.
These costs may include the following: • restructuring charges, • non-recurring transaction costs, including accounting and legal fees, investment banking fees, and recognition of transaction-related costs or liabilities, and • costs of implementing or transitioning financial and management controls and operating, administrative and information systems.
If attendance at and wagering on live horse racing declines, it could have a material adverse impact on our business. The number and level of sponsorships are important to the success of the Kentucky Derby. Our ability to retain sponsors, acquire new sponsors, and compete for sponsorships and advertising dollars could have a material adverse impact on our business.
If attendance at and wagering on live horse racing declines, it could have a material adverse impact on our business. The number and level of sponsorships are important to the success of the Kentucky Derby.
Any security breach caused by hacking which involves efforts to gain unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, and the inadvertent transmission of computer viruses could harm our business.
Any security breach, either caused by intentional hacking or human error, which results in unauthorized access to information or systems, or malfunctions or loss or corruption of data, software, hardware or other computer equipment, or the inadvertent transmission of computer viruses could harm our business.
Established gaming jurisdictions could award additional gaming licenses or permit the expansion or relocation of existing gaming operations. Voters and state legislatures may seek to supplement traditional tax revenue sources of state governments by authorizing or expanding gaming in the states that we operate in or the states that are adjacent to or near our existing properties.
Voters and state legislatures may seek to supplement traditional tax revenue sources of state governments by authorizing or expanding gaming in the states that we operate in or the states that are adjacent to or near our existing properties.
Loss or misuse of our stored information as a result of such a breach, including customers’ personal information, could lead to government enforcement actions or other litigation, potential liability, or otherwise harm our business We receive, process, store, and use personal information and other customer and employee data by maintaining and transmitting customers’ personal and financial information, credit card settlements, credit card funds transmissions, mailing lists, and reservations information.
Loss or misuse of our confidential information because of such a breach, including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation, potential liability, or otherwise harm our business We receive, process, store, and use personal information and other confidential information in our daily business operations, including by maintaining and transmitting customers’ personal and financial information, credit card settlements, credit card funds transmissions, mailing lists, and reservations information.
Any failure on our part to comply with these laws or our privacy policies may subject us to significant liabilities, including governmental enforcement actions or litigation. We have experienced cyber attacks in the past.
Any failure on our part to comply with these laws or our privacy policies may subject us to significant liabilities, including governmental enforcement actions or litigation. We regularly identify, defend against, and recover from cybersecurity incidents, and have suffered cyber-attacks in the past.
All real estate investments are subject to risks including the following: general economic conditions, such as the availability and cost of financing; local and national real estate conditions, such as an oversupply of residential, office, retail, or warehousing space, or a reduction in demand for real estate in the area; governmental regulation, including taxation of property and environmental legislation; and the attractiveness of properties to potential purchasers or tenants.
All real estate investments are subject to risks including the following: general economic conditions, such as the availability and cost of financing; local and national real estate conditions; governmental regulation, including taxation of property, environmental legislation; and the attractiveness of properties to potential purchasers or tenants.
We may not be able to successfully integrate new businesses, manage the combined operations or realize projected revenue gains, cost savings, and synergies in connection with those acquisitions on the timetable contemplated, if at all. Management of the new business operations, especially those in new lines of business or different geographic areas, may require that we increase our managerial resources.
We may not be able to successfully integrate new businesses, manage the combined operations or realize projected revenue gains, cost savings, and synergies in connection with those acquisitions on the timetable contemplated, if at all.
We may not be able to identify and / or complete acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget or as planned We pursue acquisitions, divestitures, development of new venues, and expansion of existing facilities to grow our business.
We may not be able to identify and / or complete acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget or as planned and we may experience difficulty in integrating acquisitions or transitioning divested assets to a third-party We pursue acquisitions to grow our business, and we pursue divestitures based on our long-term strategy.
We may experience difficulty in integrating recent or future acquisitions into our operations We have completed acquisition transactions in the past, and we may pursue acquisitions from time to time in the future.
We have completed acquisition transactions in the past, and we may pursue acquisitions from time to time in the future.
Though it is difficult to determine what harm may directly result from any specific interruption or breach, any failure to maintain performance, reliability, security, and availability of our network infrastructure to the satisfaction of our players may harm our reputation and our ability to retain existing players and attract new players.
Though it is difficult to determine what harm may directly result from any specific cybersecurity incident, any failure to maintain performance, reliability, security, and availability of our network infrastructure to the satisfaction of our players may harm our reputation and our ability to retain existing players and attract new players. 20 The costs to mitigate and manage the foregoing security threats and vulnerabilities before or after a cyber incident could be significant.
Third parties we work with, such as vendors, may violate applicable laws or our privacy policies, and such violations may also put our customers’ information at risk and could in turn have an adverse impact on our business. We are also subject to payment card association rules and obligations under each association’s contracts with payment card processors.
Third parties we work with, such as vendors, may violate applicable laws, their contractual commitments or our privacy and information security policies, and such violations may also put our customers’ information at risk and could in turn have an adverse impact on our business.
Security breaches, computer malware, and computer hacking attacks have become more prevalent in our industry, and hackers and data thieves are increasingly sophisticated and operate large-scale and complex attacks. Many companies, including ours, have been the targets of such attacks. Moreover, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks.
Security breaches, computer malware, computer hacking attacks and software or IT system vulnerabilities have become more prevalent in our industry, and hackers and data thieves are increasingly sophisticated and operate large-scale and complex attacks. Many companies, including ours, have been the targets of such attacks.
Under these rules and obligations, if information is compromised, we could be liable to payment card issuers for the associated expense and 20 penalties. If we fail to follow payment card industry security standards, even if no customer information is compromised, we could incur significant fines or experience a significant increase in payment card transaction costs.
If we fail to follow payment card industry security standards, even if no customer information is compromised, we could incur significant fines or experience a significant increase in payment card transaction costs.
There can be no assurance that we will be able to retain our existing governmental licenses, registrations, permits, or approvals necessary to operate our existing businesses or demonstrate suitability to obtain any licenses, registrations, permits, or approvals.
Gambling and gaming laws are frequently changing, and regulatory burdens can directly impact our profitability and growth plans. There can be no assurance that we will be able to retain our existing governmental licenses, registrations, permits, or approvals necessary to operate our existing businesses or demonstrate suitability to obtain any licenses, registrations, permits, or approvals.
The development of new venues and the expansion of existing facilities is costly and susceptible to delays, cost overruns, and other uncertainties We may decide to develop, construct, and open hotels, casinos, other gaming venues, or racetracks in response to opportunities that may arise.
The development of new venues and the expansion or renovation of existing facilities requires significant investment and is susceptible to delays, cost overruns, and other uncertainties We may decide to build out or renovate areas at Churchill Downs Racetrack or develop and build HRM entertainment venues, casinos, hotels, other gaming venues, or racetracks in response to opportunities that may arise.
Legalized gaming is currently permitted in various forms throughout the U.S. and on various lands taken into trust for the benefit of certain Native Americans in the U.S. and Canada. Other jurisdictions, including states adjacent to states in which we currently have properties, have recently legalized, implemented, and expanded gaming.
Legalized gaming is currently permitted in various forms throughout the U.S. including on Native American lands. Certain states, including states adjacent to states in which we currently have properties, have recently legalized, implemented, and expanded gaming. Established gaming jurisdictions could award additional gaming licenses or permit the expansion or relocation of existing gaming operations.
Our collection of such data is subject to extensive regulation by private groups, such as the payment card industry, as well as governmental authorities, including gaming authorities.
Our processing of such personal information is subject to extensive requirements and regulation by private groups, such as the payment card industry or through contracts, as well as by governmental authorities, including privacy, consumer protection, financial and gaming authorities.
We have "all risk" property insurance coverage for our operating properties which covers damage caused by a casualty loss (such as fire, natural disasters, acts of war, or terrorism). Our level of property insurance coverage, which is subject to policy maximum limits and certain exclusions, may not be adequate to cover all losses in the event of a major casualty.
We have "all risk" property insurance coverage for our operating properties which covers damage caused by a casualty loss (such as fire, natural disasters, acts of war, or terrorism).
As a result, we may be unable to distribute our racing content to other locations or to receive other racetracks’ racing content for wagering at our racetracks. The inability to distribute our racing content could have a material adverse impact on our business, results of operations, and financial condition.
As a result, we may be unable to distribute our racing content to other locations or to receive other racetracks’ racing content for wagering at our racetracks.
Our ability to respond to periods of economic contraction may be limited, as certain of our costs remain fixed or even increase when revenue declines. 16 Due to the nature of our business, we are subject to taxation in a number of jurisdictions and changes in, or new interpretations of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations We believe that the prospect of raising significant additional revenue through taxes and fees is one of the primary reasons that certain jurisdictions permit legalized gaming.
The occurrence or threat of any such extraordinary event at our locations, particularly at Churchill Downs Racetrack during Kentucky Derby and Oaks week, could have a material negative effect on our business and results of operations. 16 Due to the nature of our business, we are subject to taxation in several jurisdictions and changes in, or new interpretations of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations We believe that the prospect of raising significant additional revenue through taxes and fees is one of the primary reasons that certain jurisdictions permit legalized gaming.
The failure to obtain such licenses in the future or the loss of or material change in our business licenses, registrations, permits, or approvals may materially limit the number of races we conduct or our racing (including HRM) operation.
The failure to obtain such licenses in the future or the loss of or material change in our business licenses, registrations, permits, or approvals may materially limit the number of races we conduct or our racing operations and the number and types of HRMs at our properties. 24 Regulatory authorities also have input into important aspects of our operations, including hours of operation and location or relocation of a facility.
Significant expenditures, including property taxes, debt repayments, maintenance costs, insurance costs, and related charges, must be made throughout the period of ownership of real property. Such expenditures may negatively impact our operating results. We are subject to a variety of federal, state, and local governmental laws and regulations relating to the use, storage, discharge, emission, and disposal of hazardous materials.
Significant expenditures, including property taxes, debt repayments, maintenance costs, insurance costs, and related charges, must be made throughout the period of ownership or leasing of real property. Such expenditures may negatively impact our operating results.
California has adopted the California Consumer Privacy Act of 2018 (the "CCPA"), which went into effect on January 1, 2020, providing California consumers greater control of the information collected, stored, and sold, and other states are considering similar legislation.
Moreover, an increasing number of states have passed broad consumer privacy laws, such as the California Consumer Privacy Act of 2018 (the "CCPA"), which went into effect on January 1, 2020 and provided California consumers greater control of the information collected, stored, and sold.
This insurance coverage may not be sufficient to cover all possible claims, and we could suffer losses that could have a material adverse effect on our business.
We have insurance coverage for protection against cyber-attacks, which is designed to cover expenses around notification, credit monitoring, investigation, crisis management, public relations, and legal advice. This insurance coverage may not be sufficient to cover all possible claims, and we could suffer losses that could have a material adverse effect on our business.
We have pledged a significant portion of our assets as collateral under our debt facilities. If any of these lenders accelerate the repayment of borrowings, we may not have sufficient assets to repay our indebtedness and our lenders could exercise their rights against the collateral we have granted them.
If any of these lenders accelerate the repayment of borrowings, we may not have sufficient assets to repay our indebtedness, and our lenders could exercise their rights against the collateral we have granted them. Increases to interest rates, access or disruptions in the credit markets, or changes to our credit ratings may adversely affect our business.
We rely on a variety of hardware and software products to maximize revenue and efficiency in our operations. Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment in order to remain competitive in the markets in which we operate.
Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment to remain competitive in the markets in which we operate. Ensuring the successful implementation and maintenance of any new technology is an additional risk.
Currently, there are proposals that would legalize internet poker, sports betting, and other varieties of iGaming in a number of states. Expansion of land-based and iGaming in other jurisdictions (both regulated and unregulated) could further compete with our operations, which could have an adverse impact on our financial condition, results of operations, and cash flows.
Currently, several states are considering legislative proposals that would legalize sports betting and, in some cases, internet poker and other forms of iGaming. Expansion of land-based gaming or iGaming in the markets in which we operate brick-and-mortar casinos or racing venues could have an adverse impact on our financial condition, results of operations, and cash flows.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems could result in lengthy interruptions in our services. Any unscheduled interruption in the availability of our websites and our services could result in an immediate, and possibly substantial, loss of revenue.
Any unscheduled interruption in the availability of our websites and our services could result in an immediate, and possibly substantial, loss of revenue. We may from time to time implement new technology or technology systems.
Regulatory authorities also have input into important aspects of our operations, including hours of operation, location, or relocation of a facility, and numbers and types of HRMs. Regulators may also levy substantial fines against or seize our assets or the assets of our subsidiaries or the people involved in violating pari-mutuel laws or regulations.
Regulators may also levy substantial fines against or seize our assets or the assets of our subsidiaries or the people involved in violating pari-mutuel laws or regulations.
The process of integrating new operations may also interrupt the activities of those businesses, which could have a material adverse impact on our business. The costs of integrating businesses we acquire could significantly impact our short-term operating results.
Management of the new business operations, especially those in new lines of business or different 21 geographic areas, may require that we increase our managerial resources. The process of integrating new operations may also interrupt the activities of those businesses, which could have a material adverse impact on our business.
The CCPA provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information was breached as a result of a business’s violation of its duty to reasonably secure such information. The costs of compliance with these laws may increase as a result of changes in interpretation or changes in law.
Further amendments and regulations to the CCPA enhanced consumer privacy rights and increased administrative obligations on business’ privacy programs. The CCPA provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information was breached because of a business’s violation of its duty to reasonably secure such information.
Economic trends can also impact the financial viability of other industry constituents, making collection of amounts owed to us uncertain.
Economic trends can also impact the financial viability of other industry constituents, making collection of amounts owed to us uncertain. Our ability to respond to periods of economic contraction may be limited, as certain of our costs remain fixed or even increase when revenue declines.
From time to time, legislators and officials have proposed changes in tax laws or in the administration of laws affecting the horse racing, online wagering, and casino industries.
From time to time, legislators and officials have proposed changes in tax laws or in the administration of laws affecting the horse racing, online wagering, and casino industries. Many states and municipalities are experiencing budgetary pressures that may make it more likely they would seek to impose additional taxes and fees on our operations.
Many states have passed laws requiring notification to customers when there is a security breach for personal data, such as the 2002 amendment to California’s Information Practices Act or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to implement.
All U.S. states have passed laws requiring notification to individuals when there is a security breach that compromises certain personal data, and other federal and state laws and regulations require reasonable or certain minimum information security standards that are often vaguely defined and may be difficult to implement.
In addition, certain casualty events may not be covered at all under our policies. Therefore, certain acts could expose us to substantial uninsured losses.
Our level of property insurance coverage, which is subject to policy maximum limits and certain exclusions, may not be adequate to cover all losses in the event of a major casualty and certain casualty events may not be covered at all under our policies. Therefore, certain casualty events could expose us to substantial uninsured losses.
In addition, we may not receive the intended benefits of such capital investments. Ownership and development of our real estate requires significant expenditures and ownership of such properties is subject to risk, including risks related to environmental liabilities We own extensive real estate holdings and make significant capital investments to grow our operations.
Ownership and development of our owned and leased real estate is subject to risk, including risks related to environmental liabilities We own and lease extensive real estate holdings.
Restrictions on international trade, such as tariffs and other controls on imports or exports, could impact the pricing and availability of slot and HRM machines. Availability of the most popular games may also be limited by the manufacturer. If we are unable to maintain availability of the most popular games, it could impact our ability to attract and retain customers.
We rely on vendors that may use components produced in foreign countries. Restrictions on international trade, such as tariffs and other controls on imports or exports, could impact the pricing and availability of slot and HRM machines.
Supply chain disruptions and inflationary pressure related to these projects could lead to delays and higher project costs. The acquisition or divestiture of businesses may be delayed by external factors beyond our control including federal, state, and local issues.
The acquisition or divestiture of businesses may also be delayed by external factors beyond our control including federal, state, and local issues. The costs of integrating businesses we acquire or managing and transitioning divested assets to a third-party could significantly impact our short-term operating results.
We rely on a limited number of vendors to provide video poker, slot, and HRM machines and any loss of equipment suppliers could impact our operations. Ensuring the successful implementation and maintenance of any new technology acquired is an additional risk.
A substantial majority of the slot and HRM machines sold in the U.S. are manufactured by a few select companies. We rely on a limited number of vendors to provide video poker, slot and HRM machines and any loss of equipment suppliers could impact our operations. Availability of the most popular games may also be limited by the manufacturer.
The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber incident could be significant. Our remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential suppliers or customers.
Our containment or remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential suppliers or customers. As threats related to cyber-attacks develop and grow, we may also find it necessary to make further investments to protect our data and infrastructure, which may impact our results or operations.
Our online wagering, HRM and brick-and-mortar casino businesses depend upon our communications hardware and our computer hardware. Our systems also remain vulnerable to damage or interruption from floods, fires, power loss, telecommunication failures, terrorist cyber attacks, hardware or software error, computer viruses, computer denial-of-service attacks and similar events.
Our systems also remain vulnerable to damage or interruption from floods, fires, power loss, telecommunication failures, hardware or software error, computer viruses, and similar events. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems could result in lengthy interruptions in our services.
The prices of new machines may escalate and manufacturers could refuse to sell us machines featuring the most popular games, instead requiring participating lease arrangements to acquire the machines. Such agreements may be substantially more expensive over the long term than the cost of purchasing a new machine. We rely on vendors that may use components produced in foreign countries.
Such agreements may be substantially more expensive over the long term than the cost of purchasing a new machine. We rely on a variety of hardware and software products to maximize revenue and efficiency in our operations.
Furthermore, competition from internet lotteries, sweepstakes, illegal slot machines and skill games, fantasy sports and internet, or mobile-based gaming platforms, which allow their customers to wager on a wide variety of sporting events and/or play Las Vegas-style casino games from home or in non-casino settings could divert customers from our properties and thus adversely affect our financial condition, results of operations, and cash flows.
We also face an increasingly high degree of competition from online or mobile platforms, including iGaming; sports betting; i-lotteries; prediction markets; and fantasy sports. Competition from online or mobile platforms could divert customers from our properties and thus adversely affect our financial condition, results of operations, and cash flows.
Removed
The occurrence or threat of any such extraordinary event at our locations, particularly at Churchill Downs Racetrack during Kentucky Derby and Oaks week, could have a material negative effect on our business and results of operations.
Added
If we are unable to retain sponsors, acquire new sponsors, and compete for sponsorships and advertising dollars, it could have a material adverse impact on our business, including by significantly reducing revenue and harming the long-term scale and prestige of the event.
Removed
Many states and municipalities, including ones in which we operate, are currently experiencing budgetary pressures that may make it more likely they would seek to impose additional taxes and fees on our operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of our current due diligence review and contracting process with third-party vendors that may have access to our data or systems, we perform an information security review of the vendor’s program and require such contracts to include certain minimum-security safeguards and notification requirements, where applicable.
Biggest changeFor example, we require contracts with certain third-party vendors that have access to confidential data or key systems to include certain minimum data protection and notification requirements, where applicable. We also carry cybersecurity insurance with coverage for costs associated with a cybersecurity incident.
Our cybersecurity and risk management program includes technical security controls, policy enforcement mechanisms, monitoring systems, employee training, contractual arrangements, tools, and related services from third-party providers. Our CTO has over twenty years of extensive experience in information technology and security.
Our cybersecurity and risk management program includes technical security controls, policy enforcement mechanisms, monitoring systems, employee training, contractual arrangements, tools, and related services from third-party providers. Our CISO has over twenty years of extensive experience in information technology and security.
ITEM 1C. CYBERSECURITY We maintain a comprehensive process for detecting, assessing, and managing material risks from cybersecurity threats as part of our overall enterprise risk management system and processes. Our Chief Technology Officer (“CTO”) oversees our Chief Information Security Officer and a dedicated team of information security professionals who are responsible for our cybersecurity risk management program.
ITEM 1C. CYBERSECURITY We maintain a comprehensive process for detecting, assessing, and managing material risks from cybersecurity threats as part of our overall enterprise risk management system and processes. Our Chief Technology Officer ("CTO") oversees our Chief Information Security Officer ("CISO") and a dedicated team of information security professionals who are responsible for our cybersecurity risk management program.
Our CTO oversees our information security professionals’ efforts to prevent, detect, mitigate, and remediate cybersecurity and other emerging technology risks and incidents and the efforts for assessing and managing our material risks from cybersecurity threats.
Our CISO oversees our information security professionals’ efforts to prevent, detect, mitigate, and remediate cybersecurity and other emerging technology risks and incidents and the efforts for assessing and managing our material risks from cybersecurity threats.
We use the National Institute of Standards and Technology Cybersecurity Framework ("NIST CSF") as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. This does not mean that we meet any particular technical standards, specifications, or requirements of the NIST CSF.
Our cybersecurity risk management program is informed in part by the National Institute of Standards and Technology Cybersecurity Framework ("NIST CSF") as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. This does not mean that we meet any particular technical standards, specifications, or requirements of the NIST CSF.
These committees consist of senior leadership and cross-functional members from across our organization. The Consumer Data Privacy Committee assists with identifying and managing consumer data privacy issues. The Cybersecurity Disclosure Committee (“CD Committee”) assists senior management in fulfilling their responsibilities for oversight of the accuracy and timeliness of disclosures made by the Company in response to cybersecurity incidents and vulnerabilities.
The Consumer Data Privacy Committee assists with identifying and managing consumer data privacy issues. The Cybersecurity Disclosure Committee ("CD Committee") assists senior management in fulfilling their responsibilities for oversight of the accuracy and timeliness of disclosures made by the Company in response to cybersecurity incidents and vulnerabilities.
In the 26 event a potentially significant cybersecurity incident is identified by our information security team, such incident is reported to the CD Committee to consider applicable disclosures, with the assistance of outside counsel as needed.
In the event a potentially significant cybersecurity incident is identified by our information security team, such incident is reported to the CD Committee to consider applicable disclosures, with the assistance of outside counsel as needed. Senior leadership also prepares an enterprise risk management report identifying and evaluating enterprise risks, including cybersecurity risks, which is regularly presented to the Audit Committee.
We also carry cybersecurity insurance with coverage for costs associated with a cybersecurity incident. We have an established incident response plan to address and guide our employees and management on our response to a cybersecurity incident. The Company has two management committees that assist with cybersecurity incidents and risk management.
We have established an incident response plan to address and guide our employees and management on our response to a cybersecurity incident. The Company has two management committees that assist with cybersecurity incidents and cybersecurity and privacy risk management. These committees consist of senior leadership and cross-functional members from across our organization.
We routinely engage consultants and other third parties to assist with our cybersecurity risk management, including third-party penetration tests of our various information technology environments.
We routinely engage consultants and other third parties to assist with our cybersecurity risk management, including third-party penetration tests of our various information technology environments and certain assessments from time to time to assist us in evaluating our program against various industry or best practice standards. Our cybersecurity risk management program includes certain components to assist in managing third-party risk.
Removed
In addition, senior leadership prepares an enterprise risk management report identifying and evaluating enterprise risks, including cybersecurity risks, which is regularly presented to the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES Live and Historical Racing • Kentucky ◦ Louisville ▪ Churchill Downs Racetrack - we lease 158 acres under a 30-year lease that began in 2002 where we transferred title of the facility to the City of Louisville and retained the right to re-acquire the facility at any time for $1.00, subject to the terms of the lease as part of the financing of improvements to the facility. ▪ Churchill Downs auxiliary training facility ▪ Derby City Gaming & Hotel ▪ Derby City Gaming Downtown ◦ Southwestern Kentucky ▪ Oak Grove Racing, Gaming & Hotel ▪ Marshall Yards Racing & Gaming (Planned opening 1st quarter 2026) ◦ Northern Kentucky ▪ Turfway Park Racing & Gaming ▪ Newport Racing & Gaming (leased) ◦ Western Kentucky ▪ Ellis Park Racing & Gaming ▪ Owensboro Racing & Gaming • Virginia ◦ Central Virginia ▪ Colonial Downs Racetrack & Rosie's in New Kent ▪ Rosie’s in Richmond ▪ Roseshire in Henrico County (Planned opening 4th quarter 2025) ▪ Office space in Richmond (leased) ◦ Northern Virginia ▪ The Rose Gaming Resort in Dumfries ▪ Rosie’s in Dumfries (leased) ◦ Southern Virginia ▪ Rosie's in Emporia ▪ Rosie's in Collinsville (leased) ▪ Rosie's in Hampton (leased) ◦ Western Virginia - Rosie's in Vinton • New Hampshire - Chasers Poker Room in Salem (leased) 27 Wagering Services and Solutions • Kentucky ◦ TwinSpires.com and Brisnet offices in Lexington (leased) ◦ TwinSpires and United Tote offices in Louisville (leased) • California - United Tote offices in San Diego (leased) • Oregon - United Tote offices in Portland (leased) • Florida - Exacta offices in Boynton Beach (leased) • Texas - Exacta offices in Austin (leased) Gaming • Florida - Calder Casino in Miami Gardens • Indiana - Terre Haute Casino Resort in Terre Haute • Iowa - Hard Rock Hotel & Casino in Sioux City • Louisiana - Fair Grounds Race Course & Slots and certain VSI properties in New Orleans (certain ones leased) • Maine - Oxford Casino & Hotel in Oxford • Maryland - Ocean Downs Casino & Racetrack in Ocean City • Mississippi - Riverwalk Casino Hotel in Vicksburg • Mississippi - Harlow's Casino Resort & Spa in Greenville (land leased) • New York - del Lago Resort & Casino in Waterloo • Pennsylvania - Presque Isle Downs & Casino in Erie All Other • Kentucky - Corporate headquarters in Louisville (leased)
Biggest changePROPERTIES Live and Historical Racing • Kentucky ◦ Louisville ▪ Churchill Downs Racetrack - we lease 158 acres under a 30-year lease that began in 2002 where we transferred title of the facility to the City of Louisville and retained the right to re-acquire the facility at any time for $1.00, subject to the terms of the lease as part of the financing of improvements to the facility. ▪ Churchill Downs auxiliary training facility ▪ Derby City Gaming & Hotel ▪ Derby City Gaming Downtown 27 ◦ Southwestern Kentucky ▪ Oak Grove Racing, Gaming & Hotel ▪ Marshall Yards Racing & Gaming ◦ Northern Kentucky ▪ Turfway Park Racing & Gaming ▪ Newport Racing & Gaming (leased) ◦ Western Kentucky ▪ Ellis Park Racing & Gaming ▪ Owensboro Racing & Gaming • Virginia ◦ Northern Virginia • The Rose Gaming Resort in Dumfries ◦ Central Virginia ▪ Colonial Downs Racetrack & Rosie's in New Kent ▪ Rosie’s in Richmond ▪ Roseshire in Henrico Co unty (leased) ◦ Southern Virginia ▪ Rosie's in Emporia ▪ Rosie's in Collinsville (leased) ▪ Rosie's in Hampton (leased) ◦ Western Virginia - Rosie's in Vinton • New Hampshire ◦ Salem ▪ Casino Salem / Rockingham Grand Casino (leased) ▪ Chasers Poker Room in Salem (leased) Wagering Services and Solutions • Kentucky ◦ TwinSpires.com and Brisnet offices in Lexington (leased) ◦ TwinSpires and United Tote offices in Louisville (leased) • California - United Tote offices in San Diego (leased) • Oregon - United Tote offices in Portland (leased) • Texas - Exacta offices in Austin (leased) Gaming • Florida - Calder Casino in Miami Gardens • Indiana - Terre Haute Casino Resort in Terre Haute • Iowa - Hard Rock Hotel & Casino in Sioux City • Louisiana - Fair Grounds Race Course & Slots and certain VSI properties in New Orleans (certain ones leased) • Maine - Oxford Casino & Hotel in Oxford • Maryland - Ocean Downs Casino & Racetrack in Ocean City • Mississippi - Riverwalk Casino Hotel in Vicksburg • Mississippi - Harlow's Casino Resort & Spa in Greenville (land leased) • New York - del Lago Resort & Casino in Waterloo • Pennsylvania - Presque Isle Downs & Casino in Erie All Other • Kentucky - Corporate headquarters in Louisville (leased) 28

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in ordinary routine litigation matters which are incidental to our business. Refer to Note 19, Contingencies to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K, for further information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS We are involved in ordinary routine litigation matters which are incidental to our business. Refer to Note 19, Contingencies to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K, for further information. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Common Stock The following table provides information with respect to shares of common stock that we repurchased during the quarter ended December 31, 2024: Period Total Number of Shares Purchased (1)(2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased under the Plans or Programs (in millions) (1) October 2024 111,416 $ 143.97 — $ 170.9 November 2024 — — — 170.9 December 2024 186,325 132.99 160,466 149.6 Total 297,741 $ 137.10 160,466 (1) On September 29, 2021, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million.
Biggest changeIssuer Purchases of Common Stock The following table provides information with respect to shares of common stock that we repurchased during the quarter ended December 31, 2025: Period Total Number of Shares Purchased (1)(2) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased under the Plans or Programs (in millions) (1) October 2025 232,606 $ 97.52 121,190 $ 450.0 November 2025 93,372 101.71 93,372 440.5 December 2025 121,028 114.32 96,077 429.5 Total 447,006 $ 102.94 310,639 (1) On March 12, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million (the "March 2025 Stock Repurchase Program").
Shareholder Return Performance Graph The following performance graph and related information shall not be deemed "soliciting material" nor to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent we specifically incorporate it by reference into such filing. 29 The following graph depicts the cumulative total shareholder return, assuming reinvestment of dividends, for the periods indicated for our Common Stock compared to the Russell 1000 Index, S&P Midcap 400 Index, and the S&P 500 Index.
Shareholder Return Performance Graph The following performance graph and related information shall not be deemed "soliciting material" nor to be "filed" with the SEC, nor shall such information be incorporated by reference into any future filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent we specifically incorporate it by reference into such filing. 30 The following graph depicts the cumulative total shareholder return, assuming reinvestment of dividends, for the periods indicated for our Common Stock compared to the Russell 1000 Index, S&P Midcap 400 Index, and the S&P 500 Index.
Used with permission. All rights reserved. NOTE 2: Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved. ITEM 6. [RESERVED] 30
Used with permission. All rights reserved. NOTE 2: Index Data: Copyright Standard and Poor’s, Inc. Used with permission. All rights reserved. ITEM 6. [RESERVED] 31
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Common Stock The Company's common stock is traded on the Nasdaq Global Select Market under the symbol CHDN. As of February 12, 2025 , there were approximately 2,020 shareholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Common Stock The Company's common stock is traded on the Nasdaq Global Select Market under the symbol CHDN. As of February 19, 2026 , there were approximately 1,940 shareholders of record.
We declared a dividend of $0.409 in October 2024, which was paid in January 2025, and we declared a dividend of $0.382 in October 2023, which was paid in January 2024.
We declared a dividend of $0.438 in October 2025, which was paid in January 2026, and we declared a dividend of $0.409 in October 2024, which was paid in January 2025.
The 2021 Stock Repurchase Program includes and is not in addition to the unspent amount remaining under the prior authorization. For more information, refer to Note 9, Shareholders' Equity, to the notes to consolidated financial statements included in this Annual Report on Form 10-K.
The repurchase program has no time limit and may be suspended or discontinued at any time. For more information, refer to Note 9, Shareholders' Equity, to the notes to consolidated financial statements included in this Annual Report on Form 10-K.
We consider the Russell 1000 Index to be our most comparable peer group index. 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Churchill Downs Incorporated $ 100.00 $ 142.44 $ 176.65 $ 155.52 $ 199.12 $ 197.63 Russell 1000 Index $ 100.00 $ 120.96 $ 152.96 $ 123.71 $ 156.53 $ 194.89 S&P Midcap 400 Index $ 100.00 $ 113.66 $ 141.80 $ 123.28 $ 143.54 $ 163.54 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 NOTE 1: Index Data: Copyright Russell Investments.
We consider the Russell 1000 Index to be our most comparable peer group index. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Churchill Downs Incorporated $ 100.00 $ 124.01 $ 109.18 $ 139.80 $ 138.75 $ 118.66 Russell 1000 Index $ 100.00 $ 126.45 $ 102.27 $ 129.40 $ 161.12 $ 189.10 S&P Midcap 400 Index $ 100.00 $ 124.76 $ 108.47 $ 126.29 $ 143.89 $ 154.68 S&P 500 Index $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 NOTE 1: Index Data: Copyright Russell Investments.
Added
The March 2025 Stock Repurchase Program included and was not in addition to the $125.6 million remaining under the prior 2021 Stock Repurchase Program authorization. On July 22, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million (the "July 2025 Stock Repurchase Program").
Added
The July 2025 Stock Repurchase Program includes and is not in addition to the $169.2 million previously remaining under the March 2025 Stock Repurchase Program authorization. Share repurchases may be made at management's discretion from time to time in the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

49 edited+29 added−24 removed48 unchanged
Biggest changeThese increases were partially offset by a $19.5 million decrease from our wholly owned gaming properties and an $8.5 million decrease from our equity investment in Rivers Des Plaines primarily due to inclement weather in January 2024, regional gaming softness, increased competition, and higher labor and benefit expense; and a $1.2 million decrease from proceeds for business interruption insurance claims in the third quarter 2023 that did not reoccur. • All Other Adjusted EBITDA decreased $15.7 million driven primarily by increased corporate compensation related expenses and other corporate administrative expenses driven by enterprise growth. 37 Reconciliation of Net Income to Adjusted EBITDA Years Ended December 31, Change (in millions) 2024 2023 Net income attributable to Churchill Downs Incorporated $ 426.8 $ 417.3 $ 9.5 Net income attributable to noncontrolling interest 2.3 — 2.3 Net income 429.1 417.3 11.8 Adjustments: Depreciation and amortization 199.1 169.0 30.1 Interest expense 289.8 268.4 21.4 Income tax provision 144.1 144.5 (0.4) Stock-based compensation expense 36.1 32.9 3.2 Legal reserves — (1.2) 1.2 Pre-opening expense 29.6 18.6 11.0 Arlington exit costs — 9.4 (9.4) Other expense, net 4.2 7.0 (2.8) Transaction (benefit) expense, net (12.1) 4.8 (16.9) Asset impairments 3.9 24.6 (20.7) Other income, expense: Interest, depreciation and amortization expense related to equity investments 42.0 40.2 1.8 Rivers Des Plaines' legal reserves and transactions costs 0.3 — 0.3 Other charges and recoveries, net (6.9) 2.4 (9.3) Gain on the sale of assets — (114.0) 114.0 Total adjustments 730.1 606.6 123.5 Adjusted EBITDA $ 1,159.2 $ 1,023.9 $ 135.3 Consolidated Balance Sheet The following table is a summary of our overall financial position: As of December 31, Change (in billions) 2024 2023 Total assets $ 7.3 $ 7.0 $ 0.3 Total liabilities 6.2 6.1 0.1 Total shareholders’ equity 1.1 0.9 0.2 • Total assets increased $0.3 billion driven by increased capital expenditures primarily at the Terre Haute Casino Resort, Churchill Downs Racetrack, Owensboro Racing and Gaming in Western Kentucky, and The Rose Gaming Resort in Northern Virginia. • Total liabilities increased $0.1 billion driven primarily by increased borrowings on our revolver and increased deferred income taxes, partially offset by decreased accrued capital expenditures and decreased deferred revenue due to the recognition of revenue related to the 150th Kentucky Derby. • Total shareholders’ equity increased $0.2 billion driven by net income and the addition of a redeemable noncontrolling interest, partially offset by share repurchases.
Biggest changeOur equity investments decreased $8.4 million due to a $7.8 million decrease from Rivers Des Plaines due to increased competition and a $0.6 million decrease from Miami Valley Gaming. • All Other Adjusted EBITDA decreased $4.1 million driven primarily by increased corporate administrative expenses offset by income related to our captive insurance company. 38 Reconciliation of Net Income to Adjusted EBITDA Years Ended December 31, Change (in millions) 2025 2024 Net income attributable to Churchill Downs Incorporated $ 383.0 $ 426.8 $ (43.8) Net income attributable to noncontrolling interests 2.5 2.3 0.2 Net income 385.5 429.1 (43.6) Adjustments: Depreciation and amortization 233.1 199.1 34.0 Interest expense 297.7 289.8 7.9 Income tax provision 146.9 144.1 2.8 Stock-based compensation expense 30.2 36.1 (5.9) Pre-opening expense 11.7 29.6 (17.9) Other expense, net 10.1 4.2 5.9 Transaction expense (benefit), net 5.1 (12.1) 17.2 Asset impairments, net 47.5 3.9 43.6 Other income, expense: Interest, depreciation and amortization expense related to equity investments 38.6 42.0 (3.4) Rivers Des Plaines' legal reserves and transactions costs — 0.3 (0.3) Other charges and recoveries, net (1.1) (6.9) 5.8 Total adjustments 819.8 730.1 89.7 Adjusted EBITDA $ 1,205.3 $ 1,159.2 $ 46.1 Consolidated Balance Sheet The following table is a summary of our overall financial position: As of December 31, Change (in billions) 2025 2024 Total assets $ 7.5 $ 7.3 $ 0.2 Total liabilities 6.4 6.2 0.2 Total shareholders’ equity 1.0 1.1 (0.1) • Total assets increased $0.2 billion driven by increased other intangible assets due to the acquisition of Casino Salem and capital expenditures primarily due to the Churchill Downs Racetrack Starting Gate Pavilion and Courtyard, Roseshire Gaming Parlor, completed expansion of Rosie's Richmond, Marshall Yards Racing & Gaming, and Owensboro Racing & Gaming in Western Kentucky.
Adjusted EBITDA is a supplemental measure of our performance that is not required by or presented in accordance with GAAP. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of our operating results.
Adjusted EBITDA is a supplemental measure of our performance that is not required by or presented in accordance with GAAP. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of our operating results.
The Company may redeem some or all of the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture. 2028 Senior Notes On December 27, 2017, the Company completed an offering of $500.0 million in aggregate principal amount of 4.75% Senior Unsecured Notes that mature on January 15, 2028 (the "Existing 2028 Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
The Company may redeem some or all the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture. 2028 Senior Notes On December 27, 2017, the Company completed an offering of $500.0 million in aggregate principal amount of 4.75% Senior Unsecured Notes that mature on January 15, 2028 (the "Existing 2028 Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
Arlington's results and exit costs in 2023 are treated as an adjustment. On June 26, 2023, the Company's management agreement for Lady Luck in Farmington, Pennsylvania expired and was not renewed. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income.
Arlington's results and exit costs in 2023 are treated as an adjustment. 33 On June 26, 2023, the Company's management agreement for Lady Luck in Farmington, Pennsylvania expired and was not renewed. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income.
Our consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates, judgments, and assumptions that we believe are reasonable based on our historical experience, contract terms, 42 observance of known trends in our Company and the industry as a whole and information available from other outside sources.
Our consolidated financial statements have been prepared in conformity with GAAP, which requires management to make 43 estimates, judgments, and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our Company and the industry as a whole and information available from other outside sources.
Evaluations of possible impairment require us to estimate, among other factors, forecasts of future operating results, revenue growth, operating expense, tax rates, start-up costs, capital expenditures, depreciation, working capital, 43 discount rates, long-term growth rates, risk premiums, royalty rates, terminal values, and fair values of our reporting units and assets.
Evaluations of possible impairment require us to estimate, among other factors, forecasts of future operating 44 results, revenue growth, operating expense, tax rates, start-up costs, capital expenditures, depreciation, working capital, discount rates, long-term growth rates, risk premiums, royalty rates, terminal values, and fair values of our reporting units and assets.
For the period ended December 31, 2024, the Company's commitment fee rate was 0.25%. The Company completed the transition of its financing from London Interbank Offered Rate to SOFR during the second quarter of 2023. These transition activities did not have a material impact on the Company’s financial statements.
For the period ended December 31, 2025, the Company's commitment fee rate was 0.25%. The Company completed the transition of its financing from London Interbank Offered Rate to SOFR during the second quarter of 2023. These transition activities did not have a material impact on the Company’s financial statements.
The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio. As of December 31, 2024, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.
The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio. As of December 31, 2025, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.
The Credit Agreement also contains financial covenants providing for the maintenance of a maximum consolidated secured net leverage ratio and maintenance of a minimum consolidated interest coverage ratio. 40 Actual as of December 31, 2024 Requirement Interest coverage ratio 3.9 to 1.0 > 2.5 to 1.0 Consolidated total secured net leverage ratio 1.3 to 1.0 The Company was compliant with all applicable covenants on December 31, 2024. 2027 Senior Notes On March 25, 2019, the Company completed an offering of $600.0 million in aggregate principal amount of 5.50% Senior Unsecured Notes that mature on April 1, 2027 (the "2027 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
The Credit Agreement also contains financial covenants providing for the maintenance of a maximum consolidated secured net leverage ratio and maintenance of a minimum consolidated interest coverage ratio. 41 Actual as of December 31, 2025 Requirement Interest coverage ratio 3.9 to 1.0 > 2.5 to 1.0 Consolidated total secured net leverage ratio 1.4 to 1.0 The Company was compliant with all applicable covenants on December 31, 2025. 2027 Senior Notes On March 25, 2019, the Company completed an offering of $600.0 million in aggregate principal amount of 5.50% Senior Unsecured Notes that mature on April 1, 2027 (the "2027 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
If any of these factors were to materially change, such change may require a reevaluation of our goodwill and indefinite-lived intangible assets. Changes in estimates or the application of alternative assumptions could produce significantly different results. 44
If any of these factors were to materially change, such change may require a reevaluation of our goodwill and indefinite-lived intangible assets. Changes in estimates or the application of alternative assumptions could produce significantly different results. 45
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for the following: Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to a noncontrolling interest.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for the following: Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to noncontrolling interests.
The Company has $5.7 million of capitalized unamortized debt issuance costs associated with the Term Loan A which are being amortized as interest expense over the remainder of the term. On February 14, 2025, the Company announced that it closed the seventh amendment of the Credit Agreement.
The Company has $4.4 million of capitalized unamortized debt issuance costs associated with the Term Loan A which are being amortized as interest expense over the remainder of the term. On February 14, 2025, the Company announced that it closed the seventh amendment of the Credit Agreement.
The following discussion provides an analysis of our results of operations and reasons for material changes therein for 2024 as compared to 2023.
The following discussion provides an analysis of our results of operations and reasons for material changes therein for 2025 as compared to 2024.
Discussion regarding our financial condition and results of operations for 2023 as compared to 2022 is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 21, 2024.
Discussion regarding our financial condition and results of operations for 2024 as compared to 2023 is included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 20, 2025.
Adjusted EBITDA excludes: • Transaction expense, net which includes: – Acquisition, disposition, and property sale related charges; – Other transaction expense, including legal, accounting and other deal-related expense; • Stock-based compensation expense; • Rivers Des Plaines' impact on our investments in unconsolidated affiliates from: – Legal reserves and transaction costs; • Asset impairments; • Gain on property sales; • Legal reserves; 32 • Pre-opening expense; and • Other charges, recoveries and expenses As of December 31, 2021, Arlington International Racecourse ("Arlington") ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears.
Adjusted EBITDA excludes: • Transaction expense, net which includes: – Acquisition, disposition, and property sale related charges; and – Other transaction expense, including legal, accounting and other deal-related expense; • Stock-based compensation expense; • Rivers Des Plaines' impact on our investments in unconsolidated affiliates from legal reserves and transaction costs; • Asset impairments, net; • Gain on property sales; • Legal reserves; • Pre-opening expense; and • Other charges, recoveries and expenses The property associated with Arlington International Racecourse ("Arlington") was sold on February 15, 2023 to the Chicago Bears.
The Company had $814.9 million available borrowing capacity, after consideration of $7.6 million in outstanding letters of credit, under the Revolver as of December 31, 2024. The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company.
The Company had $534.8 million available borrowing capacity, after consideration of $8.2 million in outstanding letters of credit, under the Revolver as of December 31, 2025. The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company.
We currently expect our project capital to be approximately $350 to $400 million in 2025, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.
We currently expect our project capital to be approximately $180.0 to $220.0 million 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 2030 Senior Notes will vote as one class under the indenture governing the 2030 Senior Notes. 41 The Issuer may redeem some of or all the 2030 Senior Notes at any time prior to April 1, 2025, at redemption prices set forth in the 2030 Offering Memorandum. 2031 Senior Notes On April 25, 2023, the Company completed an offering of $600.0 million in aggregate principal amount of 6.75% senior unsecured notes that mature on April 25, 2031 (the "2031 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
The Company may redeem some or all the 2030 Senior Notes at redemption prices set forth in the 2030 Indenture. 42 2031 Senior Notes On April 25, 2023, the Company completed an offering of $600.0 million in aggregate principal amount of 6.75% senior unsecured notes that mature on April 25, 2031 (the "2031 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act.
The 2030 Senior Notes were issued at 100% of the principal amount, plus interest deemed to have accrued from April 13, 2022, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1, 2022.
The 2030 Senior Notes were issued at 100% of the principal amount, plus interest deemed to have accrued from April 13, 2022, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1, 2022. The 2030 Senior Notes will vote as one class under the indenture governing the 2030 Senior Notes.
The payment and amount of future dividends will be determined by the Board of Directors and will depend upon, among other things, our operating results, financial condition, cash requirements and general business conditions at the time such payment is considered. 39 Credit Facilities and Indebtedness The following table presents our debt outstanding, bond premium and debt issuance costs: As of December 31, Change (in millions) 2024 2023 Term Loan B-1 due 2028 $ 288.8 $ 291.8 $ (3.0) Term Loan A due 2029 1,172.4 1,235.0 (62.6) Revolver 377.5 247.2 130.3 2027 Senior Notes 600.0 600.0 — 2028 Senior Notes 700.0 700.0 — 2030 Senior Notes 1,200.0 1,200.0 — 2031 Senior Notes 600.0 600.0 — Total debt 4,938.7 4,874.0 64.7 Current maturities of long-term debt (63.1) (68.0) 4.9 Total debt, net of current maturities 4,875.6 4,806.0 69.6 Issuance cost and fees (31.5) (37.7) 6.2 Total debt $ 4,844.1 $ 4,768.3 $ 75.8 Credit Agreement At December 31, 2024, the Company’s senior secured credit facility (as amended from time to time, the “Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $288.8 million senior secured term loan B-1 due 2028 (the "Term Loan B-1"), $1.2 billion senior secured term loan A due 2029 (the "Term Loan A"), and $100.0 million swing line commitment.
The payment and amount of future dividends will be determined by the Board of Directors and will depend upon, among other things, our operating results, financial condition, cash requirements and general business conditions at the time such payment is considered. 40 Credit Facilities and Indebtedness The following table presents our debt outstanding, bond premium and debt issuance costs: As of December 31, Change (in millions) 2025 2024 Term Loan B-1 due 2028 $ 285.8 $ 288.8 $ (3.0) Term Loan A due 2029 1,112.3 1,172.4 (60.1) Revolver 657.0 377.5 279.5 2027 Senior Notes 600.0 600.0 — 2028 Senior Notes 700.0 700.0 — 2030 Senior Notes 1,200.0 1,200.0 — 2031 Senior Notes 600.0 600.0 — Total debt 5,155.1 4,938.7 216.4 Current maturities of long-term debt (63.1) (63.1) — Total debt, net of current maturities 5,092.0 4,875.6 216.4 Issuance cost and fees (24.9) (31.5) 6.6 Total debt $ 5,067.1 $ 4,844.1 $ 223.0 Credit Agreement At December 31, 2025, the Company’s senior secured credit facility (as amended from time to time, the "Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $285.8 million senior secured term loan B-1 due 2028 (the "Term Loan B-1"), $1.1 billion senior secured term loan A due 2029 (the "Term Loan A"), and $100.0 million swing line commitment.
Key Indicators to Evaluate Business Results and Financial Condition Our management monitors a variety of key indicators to evaluate our business results and financial condition. These indicators include changes in net revenue, operating expense, operating income, earnings per share, outstanding debt balance, operating cash flow and capital spend.
Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Key Indicators to Evaluate Business Results and Financial Condition Our management monitors a variety of key indicators to evaluate our business results and financial condition. These indicators include changes in net revenue, operating expense, operating income, earnings per share, outstanding debt balance, operating cash flow and capital spend.
All Other: • We amended our senior secured credit agreement to extend the maturity date of our revolving credit facility and term loan A facility from 2027 to 2029 and to make certain other changes to our existing credit agreement. • We repurchased $65.3 million of shares under our share repurchase program in 2024, based on trade date. • We continued in our ESG efforts with the ongoing promotion of responsible gaming; initiatives at our properties to lessen energy and water usage, to decrease carbon emissions, and to responsibly manage waste; increasing investments in the communities in which we operate and supporting our teams through educational and leadership development; and increasing engagement with our shareholders.
All Other: • We repurchased $425.3 million of shares under our share repurchase programs in 2025, based on trade date. • We continued in our ESG efforts with the ongoing promotion of responsible gaming; initiatives at our properties to lessen energy and water usage, to decrease carbon emissions, and to responsibly manage waste; increasing investments in the communities in which we operate and supporting our teams through educational and leadership development; and increasing engagement with our shareholders.
Contractual Obligations Our commitments to make future payments as of December 31, 2024, are estimated as follows: (in millions) 2025 2026-2027 2028-2029 Thereafter Total Dividends $ 30.1 $ — $ — $ — $ 30.1 Revolver — — 377.5 — 377.5 Interest on Revolver (1) 22.8 45.6 34.5 — 102.9 Term Loan B-1 3.0 6.0 279.8 — 288.8 Interest on Term Loan B-1 (1) 18.8 37.1 3.9 — 59.8 Term Loan A 60.1 120.2 992.1 — 1,172.4 Interest on Term Loan A (1) 69.5 128.1 86.9 — 284.5 2027 Senior Notes — 600.0 — — 600.0 2028 Senior Notes — — 700.0 — 700.0 2030 Senior Notes — — — 1,200.0 1,200.0 2031 Senior Notes — — — 600.0 600.0 Interest on 2027 Senior Notes 33.0 49.5 — — 82.5 Interest on 2028 Senior Notes 33.3 66.5 16.6 — 116.4 Interest on 2030 Senior Notes 69.0 138.0 138.0 34.5 379.5 Interest on 2031 Senior Notes 40.5 81.0 81.0 60.8 263.3 Operating and Finance Leases 11.0 19.4 14.5 30.2 75.1 All other 1.6 3.0 2.8 5.0 12.4 Total $ 392.7 $ 1,294.4 $ 2,727.6 $ 1,930.5 $ 6,345.2 (1) Interest includes the estimated contractual payments under our Credit Facility assuming no change in the weighted average borrowing rate of 6.04%, which was the rate in place as of December 31, 2024.
Contractual Obligations Our commitments to make future payments as of December 31, 2025, are estimated as follows: (in millions) 2026 2027-2028 2029-2030 Thereafter Total Dividends $ 30.5 $ — $ — $ — $ 30.5 Revolver — — 657.0 — 657.0 Interest on Revolver (1) 35.1 70.2 17.9 — 123.2 Term Loan B-1 3.0 282.8 — — 285.8 Interest on Term Loan B-1 (1) 15.8 18.9 — — 34.7 Term Loan A 60.1 120.3 931.9 — 1,112.3 Interest on Term Loan A (1) 58.8 108.0 25.1 — 191.9 2027 Senior Notes — 600.0 — — 600.0 2028 Senior Notes — 700.0 — — 700.0 2030 Senior Notes — — 1,200.0 — 1,200.0 2031 Senior Notes — — — 600.0 600.0 Interest on 2027 Senior Notes 33.0 16.5 — — 49.5 Interest on 2028 Senior Notes 33.3 49.9 — — 83.2 Interest on 2030 Senior Notes 69.0 138.0 103.5 — 310.5 Interest on 2031 Senior Notes 40.5 81.0 81.0 20.3 222.8 Operating and Finance Leases 10.8 19.3 16.1 42.0 88.2 All other 1.5 2.9 2.7 3.8 10.9 Total $ 391.4 $ 2,207.8 $ 3,035.2 $ 666.1 $ 6,300.5 (1) Interest includes the estimated contractual payments under our Credit Facility assuming no change in the weighted average borrowing rate of 5.34%, which was the rate in place as of December 31, 2025.
The Company may redeem some or all of the 2031 Senior Notes at any time prior to April 25, 2025, at redemption prices set forth in the 2031 Offering Memorandum.
The Company may redeem some or all the 2031 Senior Notes at redemption prices set forth in the 2031 Indenture.
Our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, acquisitions or equity investments, funding of construction for development projects, and our compliance with our covenants under our credit facility. 38 The following table is a summary of our liquidity and cash flows: Year Ended December 31, Change (in millions) 2024 2023 Cash Flows from: Operating activities $ 771.7 $ 605.3 $ 166.4 Investing activities (545.2) (718.0) 172.8 Financing activities (196.6) 129.3 (325.9) Operating Cash Flow Cash flows from operating activities increased $166.4 million driven by increased operating income and due to the change in working capital primarily related to an increase in short-term gaming and racing liabilities as a result of our Company’s growth and a decrease in accounts receivable primarily from the timing of collections.
Our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, acquisitions or equity investments, funding of construction for development projects, and our compliance with our covenants under our credit facility. 39 The following table is a summary of our liquidity and cash flows: Year Ended December 31, Change (in millions) 2025 2024 Cash Flows from: Operating activities $ 769.8 $ 771.7 $ (1.9) Investing activities (471.5) (545.2) 73.7 Financing activities (262.5) (196.6) (65.9) Operating Cash Flow Cash flows from operating activities decreased $1.9 million driven by a decrease in other assets and liabilities and decreased distributions from our unconsolidated affiliates.
Business, of this Annual Report on Form 10-K for more information on our segments and a description of our competition and government regulations and potential legislative changes that affect our business.
Our Operations We manage our operations through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. Refer to Part I, Item 1. Business, of this Annual Report on Form 10-K for more information on our segments and a description of our competition and government regulations and potential legislative changes that affect our business.
Capital project expenditures represent fixed asset additions related to land or building improvements to new or existing assets or purchases of new (non-replacement) equipment or software related to specific projects deemed necessary expenditures.
Capital project expenditures represent fixed asset additions related to land or building improvements to new or existing assets or purchases of new (non-replacement) equipment or software related to specific projects deemed necessary expenditures. We spent $204.7 million in 2025 on project capital investments including: Churchill Downs Racetrack, Roseshire, Owensboro, Marshall Yards, and Rosie's Richmond.
All captive revenue is eliminated in consolidation. 35 Consolidated Operating Expense The following table is a summary of our consolidated operating expense: Years Ended December 31, Change (in millions) 2024 2023 Taxes and purses $ 662.9 $ 613.4 $ 49.5 Content expense 168.4 173.0 (4.6) Salaries and benefits 330.1 285.3 44.8 Selling, general and administrative expense 237.7 202.3 35.4 Depreciation and amortization 199.1 169.0 30.1 Marketing and advertising expense 90.7 83.4 7.3 Maintenance, insurance and utilities 95.2 88.9 6.3 Property and other taxes 23.0 26.4 (3.4) Asset impairments 3.9 24.6 (20.7) Transaction (benefit) expense, net (12.1) 4.8 (16.9) Other operating expense 226.4 226.6 (0.2) Total expense $ 2,025.3 $ 1,897.7 $ 127.6 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Operating expenses increased $127.6 million for the year ended December 31, 2024 compared to December 31, 2023 primarily due to the Exacta Transaction in August 2023, the opening of Rosie's Emporia in September 2023, Derby City Gaming Downtown in December 2023, Terre Haute Casino Resort in Indiana in April 2024, and The Rose Gaming Resort in Virginia in November 2024.
All captive revenue is eliminated in consolidation. 36 Consolidated Operating Expense The following table is a summary of our consolidated operating expense: Years Ended December 31, Change (in millions) 2025 2024 Taxes and purses $ 726.2 $ 662.9 $ 63.3 Content expense 166.4 168.4 (2.0) Salaries and benefits 348.7 330.1 18.6 Selling, general and administrative expense 246.2 237.7 8.5 Depreciation and amortization 233.1 199.1 34.0 Marketing and advertising expense 101.9 90.7 11.2 Maintenance, insurance and utilities 89.4 95.2 (5.8) Property and other taxes 28.3 23.0 5.3 Asset impairments, net 47.5 3.9 43.6 Transaction expense (benefit), net 5.1 (12.1) 17.2 Other operating expense 249.3 226.4 22.9 Total expense $ 2,242.1 $ 2,025.3 $ 216.8 Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 Operating expenses increased $216.8 million for the year ended December 31, 2025 compared to December 31, 2024 primarily due to the openings of Terre Haute in Indiana in April 2024 and the hotel in May 2024, The Rose in Virginia in November 2024, Owensboro in February 2025, and the Roseshire in September 2025, as well as the renovation and expansion of our Richmond venue and the addition of the temporary facility at Casino Salem in New Hampshire.
Our businesses generate strong cash flow, and we have a solid balance sheet that supports our organic growth as well as strategic acquisitions that we believe will create long-term value for our shareholders. Our Operations We manage our operations through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. Refer to Part I, Item 1.
We remain committed to delivering strong financial results and long-term sustainable growth. Our businesses generate strong cash flow, and we have a solid balance sheet that supports our organic growth as well as strategic acquisitions that we believe will create long-term value for our shareholders.
As of December 31, 2024, we had approximately $3.2 million of unrecognized tax benefits. Critical Accounting Policies and Estimates Our significant accounting policies and recently adopted accounting policies are more fully described in Note 2, Significant Accounting Policies to the notes to consolidated financial statements included in Item 8.
Critical Accounting Policies and Estimates Our significant accounting policies and recently adopted accounting policies are more fully described in Note 2, Significant Accounting Policies to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Partially offsetting these increases to cash from operating activities was increased interest paid and decreased distributions from our unconsolidated affiliates in 2024. We anticipate that cash flows from operations and availability of borrowings under our credit facility over the next twelve months will be adequate to fund our business operations and capital expenditures.
We anticipate that cash flows from operations and availability of borrowings under our credit facility over the next twelve months will be adequate to fund our business operations and capital expenditures. Investing Cash Flow Cash flows used in investing activities decreased $73.7 million primarily driven by a decrease in capital expenditures in 2025, partially offset by the Salem Transaction.
Consolidated Financial Results The following table reflects our net revenue, operating income, net income, Adjusted EBITDA, and certain other financial information: Years Ended December 31, Change (in millions) 2024 2023 Net revenue $ 2,734.3 $ 2,461.7 $ 272.6 Operating income 709.0 564.0 145.0 Operating income margin 25.9 % 22.9 % Net income attributable to Churchill Down Incorporated $ 426.8 $ 417.3 $ 9.5 Adjusted EBITDA 1,159.2 1,023.9 135.3 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 • Net revenue increased $272.6 million driven by a $178.3 million increase from the Live and Historical Racing segment primarily from growth at our Virginia properties and the opening of the Rosie's Emporia HRM venue and The Rose Gaming Resort, a record-breaking Derby Week at Churchill Downs Racetrack, and growth at our other HRM venues, a $70.5 million increase from the Gaming segment primarily from the opening of the Terre Haute Casino Resort, and a $24.6 million increase from the Wagering Services and Solutions segment primarily from to our Exacta business.
Consolidated Financial Results The following table reflects our net revenue, operating income, net income, Adjusted EBITDA, and certain other financial information: Years Ended December 31, Change (in millions) 2025 2024 Net revenue $ 2,925.9 $ 2,734.3 $ 191.6 Operating income 683.8 709.0 (25.2) Operating income margin 23.4 % 25.9 % Net income attributable to Churchill Down Incorporated $ 383.0 $ 426.8 $ (43.8) Adjusted EBITDA 1,205.3 1,159.2 46.1 Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 • Net revenue increased $191.6 million driven by a $169.1 million increase from the Live and Historical Racing segment primarily due to the opening of The Rose in November 2024, the opening of Owensboro Racing and Gaming in February 2025, the opening of Roseshire in September 2025, the acquisition of Casino Salem in August 2025, and growth at our other HRM properties, a $18.7 million increase from the Wagering Services and Solutions segment primarily due to increased Derby Week wagering at TwinSpires Horse Racing and Exacta, and a $3.8 million increase from the Gaming segment primarily driven by the opening of the Terre Haute in April 2024, partially offset by net decreases at our nine other wholly owned gaming properties. • Operating income decreased $25.2 million driven by an increase in impairment expense of $43.6 million primarily related to the net impairment of Chasers' gaming rights, a $17.2 million increase in transaction expenses, a $10.3 million decrease from our Gaming segment, an $8.5 million increase in SG&A expense, and a $2.6 million decrease from All Other.
Common Stock Repurchase Program On September 29, 2021, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million ("2021 Stock Repurchase Program"). Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions.
Share repurchases may be made at management’s discretion from time to time in the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time.
Revenue by Segment The following table presents net revenue for our segments, including intercompany revenues: Years Ended December 31, Change (in millions) 2024 2023 Live and Historical Racing $ 1,267.0 $ 1,084.6 $ 182.4 Wagering Services and Solutions 500.7 458.4 42.3 Gaming 1,045.4 974.6 70.8 All Other 6.6 0.9 5.7 Eliminations (85.4) (56.8) (28.6) Net Revenue $ 2,734.3 $ 2,461.7 $ 272.6 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 • Live and Historical Racing revenue increased $182.4 million due to a $57.2 million increase at Churchill Downs Racetrack due to a record-breaking 150th Derby Week, a $25.9 million increase in Northern Virginia including the opening of The Rose Gaming Resort, a $17.2 million increase from the opening of the Rosie’s Emporia HRM venue in Southern Virginia in September 2023, a $39.5 million increase from our other Virginia HRM venues, a $41.5 million increase from our Kentucky HRM venues, and a $1.1 million increase from our New Hampshire venue. • Wagering Services and Solutions revenue increased $42.3 million due to a $40.8 million increase from our Exacta business primarily from growth in our third party HRM business and from the growth of our Virginia HRM venues and a $2.0 million increase from our sports betting business, partially offset by a $0.5 million decrease from TwinSpires Ho rse Racing. • Gaming revenue increased $70.8 million primarily due to a $96.6 million increase from the opening of the Terre Haute Casino Resort.
Revenue by Segment The following table presents net revenue for our segments, including intercompany revenues: Years Ended December 31, Change (in millions) 2025 2024 Live and Historical Racing $ 1,442.4 $ 1,267.0 $ 175.4 Wagering Services and Solutions 526.3 500.7 25.6 Gaming 1,049.3 1,045.4 3.9 All Other 8.7 6.6 2.1 Eliminations (100.8) (85.4) (15.4) Net Revenue $ 2,925.9 $ 2,734.3 $ 191.6 Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 • Live and Historical Racing revenue increased $175.4 million due to an $88.3 million increase from our Virginia HRM venues, a $72.6 million increase from our Kentucky HRM venues, an $8.4 million increase from Churchill Downs Racetrack, and a $6.1 million increase primarily from our New Hampshire venues.
Headquartered in Louisville, Kentucky, CDI has expanded through the acquisition, development, and operation of live and historical racing entertainment venues, the growth of the online wagering businesses, and the acquisition, development, and operation of regional casino gaming properties. 2024 Transactions and Expansions The Rose Gaming Resort Opening In November 2024, the Company opened The Rose Gaming Resort approximately 30 miles south of Washington D.C.
Headquartered in Louisville, Kentucky, CDI has expanded through the acquisition, development, and operation of live and historical racing entertainment venues, the growth of the online wagering businesses, and the acquisition, development, and operation of regional casino gaming properties. 2025 Transactions and Expansions Owensboro Racing and Gaming Owensboro Racing and Gaming ("Owensboro") opened in February 2025 in Owensboro, Kentucky with 600 historical racing machines ("HRMs"), a retail sportsbook, a simulcast wagering area, and multiple food and beverage offerings.
Adjusted EBITDA by Segment We believe that the use of Adjusted EBITDA as a key performance measure of the results of operations enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner.
Asset impairments for the year ended December 31, 2025 include a $2.4 million write-off in the second quarter of 2025 of HRMs in Virginia that are no longer in use and a $45.1 million net impairment of the gaming rights for Chasers Poker Room in the third quarter of 2025. 37 Adjusted EBITDA by Segment We believe that the use of Adjusted EBITDA as a key performance measure of the results of operations enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner.
Financing Cash Flow Cash flows from financing activities decreased $325.9 million primarily driven by decreased net proceeds from long-term debt in 2024 compared to 2023 and by increased share repurchases in 2024. Capital Expenditures Included in cash flows from investing activities are capital maintenance expenditures and capital project expenditures.
Financing Cash Flow Cash flows used in financing activities increased $65.9 million primarily driven by the increase in share repurchases in 2025, partially offset by an increase in borrowings on the Revolver to fund the Salem Transaction. Capital Expenditures Included in cash flows from investing activities are capital maintenance expenditures and capital project expenditures.
Wagering Services and Solutions Segment: • Adjusted EBITDA was $165.6 million, up $33.5 million or 25.4% from fiscal year 2023. • We expanded Exacta technology and product offerings to customers in new states and internationally. 33 • We monetized online sports betting market access in select states (Indiana, Kentucky, and Pennsylvania) with third parties.
Wagering Services and Solutions Segment: • Adjusted EBITDA was $177.3 million, up $11.7 million or 7.1% from fiscal year 2024. • We expanded Exacta technology and product offerings to customers in new states.
Dividends On October 22, 2024, the Company's Board of Directors approved an annual cash dividend on our common stock of $0.409 per outstanding share, which represented a 7% increase over the prior year. The dividend was payable on January 3, 2025 to shareholders of record as of the close of business on December 6, 2024.
We had approximately $429.5 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at December 31, 2025, based on trade date. Dividends On October 21, 2025, the Company's Board of Directors approved an annual cash dividend on our common stock of $0.438 per outstanding share, which represented a 7% increase over the prior year.
Excluding these items, net income increased $61.2 million primarily due to a $77.0 million after-tax increase primarily driven by the results of our operations and equity income from our unconsolidated affiliates, partially offset by a $15.8 million after-tax increase in interest expense associated with higher outstanding debt balances and higher interest rates. • Adjusted EBITDA increased $135.3 million driven by a $99.2 million increase from the Live and Historical Racing segment primarily from a record-breaking Derby Week at Churchill Downs Racetrack and growth at our HRM venues, a $33.5 million increase from the Wagering Services and Solutions segment primarily due to our Exacta business, and an $18.3 million increase from the Gaming segment primarily from the opening of the Terre Haute Casino Resort in April 2024 that was partially offset by inclement weather in January 2024, regional gaming softness, and increased competition.
Excluding these items, net income attributable to CDI decreased $0.5 million due to a $2.4 million after-tax increase in interest expense associated primarily with higher outstanding debt balances and higher interest rates, and a $0.2 million after-tax decrease related to the income attributable to the noncontrolling interest of United Tote and Casino Salem, partially offset by a $2.1 after-tax increase driven by the results of our operations. • Adjusted EBITDA increased $46.1 million driven by a $62.4 million increase from the Live and Historical Racing segment primarily due to the opening of The Rose in Northern Virginia in November 2024, and a $11.7 million increase from the Wagering Services and Solutions segment primarily due to Exacta.
Terre Haute Casino Resort Opening In April 2024, the Company opened the Terre Haute Casino Resort in Terre Haute, Indiana. The Company invested approximately $290 million to develop the Terre Haute Casino Resort with a luxury hotel, 1,040 slot machines, 36 tables games, a state-of-the-art sportsbook, and regionally inspired food and beverage amenities.
Terre Haute Casino Resort opened with 1,040 slot machines, 36 tables games, a hotel, food and beverage offerings, and a retail sportsbook.
Year Ended December 31, Change (in millions) 2024 2023 Live and Historical Racing $ 574.6 $ 475.4 $ 99.2 Wagering Services and Solutions 165.6 132.1 33.5 Gaming 506.9 488.6 18.3 Total segment Adjusted EBITDA 1,247.1 1,096.1 151.0 All Other (87.9) (72.2) (15.7) Total Adjusted EBITDA $ 1,159.2 $ 1,023.9 $ 135.3 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 • Live and Historical Racing Adjusted EBITDA increased $99.2 million due to a $32.6 million increase at Churchill Downs Racetrack due to a record-breaking 150th Derby Week, $9.7 million increase in Northern Virginia including the opening of The Rose Gaming Resort, a $7.1 million increase from the opening of the Rosie’s Emporia HRM venue in Southern Virginia in September 2023, a $38.3 million increase from our other Virginia HRM venues, and an $11.5 million increase primarily from our other Kentucky HRM venues. 36 • Wagering Services and Solutions Adjusted EBITDA increased $33.5 million due to a $29.2 million increase from our Exacta business because of increased fees from our Virginia HRM venues, a $2.2 million increase from a one-time reduction in accrued compensation expenses related to our Exacta business, and a $2.6 million increase primarily from our sports betting business, partially offset by a $0.5 million decrease from TwinSpires Horse Racing. • Gaming Adjusted EBITDA increased $18.3 million primarily due to a $44.5 million increase from the opening of the Terre Haute Casino Resort and a $3.0 million increase from our equity investment in Miami Valley Gaming.
Year Ended December 31, Change (in millions) 2025 2024 Live and Historical Racing $ 637.0 $ 574.6 $ 62.4 Wagering Services and Solutions 177.3 165.6 11.7 Gaming 483.0 506.9 (23.9) Total segment Adjusted EBITDA 1,297.3 1,247.1 50.2 All Other (92.0) (87.9) (4.1) Total Adjusted EBITDA $ 1,205.3 $ 1,159.2 $ 46.1 Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 • Live and Historical Racing Adjusted EBITDA increased $62.4 million due to a $41.4 million increase from our Kentucky HRM venues, an $18.7 million increase from our Virginia HRM venues, a $1.6 million increase primarily from our New Hampshire venues, and a $0.7 million increase from Churchill Downs Racetrack.
Live and Historical Racing Segment: • Adjusted EBITDA was $574.6 million, up $99.2 million or 20.9% from fiscal year 2023. • Churchill Downs Racetrack: ◦ Churchill Downs Racetrack ran the 150th Kentucky Derby on the first Saturday of May, generating all-time record all-sources handle and all-time record Derby Week Adjusted EBITDA with nearly 157,000 fans gathered in person to watch the most exciting two minutes in sports. ◦ We successfully completed the transformative Paddock Project prior to the 150th Kentucky Derby.
Business Highlights In 2025, we delivered strong performance and made investments in the Kentucky Derby and new entertainment venues that we believe will provide long-term sustainable value creation for our shareholders. • Record net revenue was $2.9 billion, up $191.6 million or 7.0%; • Net income was $383.0 million, down $43.8 million or 10.3%; • Record Adjusted EBITDA was $1.2 billion, up $46.1 million, or 4.0%; Live and Historical Racing Segment: • Adjusted EBITDA was $637.0 million, up $62.4 million or 10.9% from fiscal year 2024. • Churchill Downs Racetrack: ◦ Churchill Downs Racetrack ran the 151st Kentucky Derby on the first Saturday of May, generating all-time handle record for the Kentucky Derby Race, Kentucky Derby Day Program, and Kentucky Derby Week races with nearly 147,00 fans gathered in person to watch the most exciting two minutes in sports. ◦ The Starting Gate Pavilion and Courtyard was completed for the 151st running of the Kentucky Derby.
See the Reconciliation of Net Income to Adjusted EBITDA included in this section for additional information. Business Highlights In 2024, we delivered strong performance while continuing the execution of several organic investments that we believe will provide long-term sustainable value creation.
See the Reconciliation of Net Income to Adjusted EBITDA included in this section for additional information.
As a result, the Company recognized a non-cash impairment charge of $24.5 million in the second quarter of 2023 for the Presque Isle gaming rights and trademark. For additional information, refer to Note 7, Asset Impairments to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
The $40.0 million gain on settlement of the noncurrent liability and the $85.1 million impairment charge of the gaming rights intangible are included in Asset impairments, net in the Consolidated Statements of Comprehensive Income. For additional information, refer to Note 7, Asset Impairments to the notes to consolidated financial statements included in Item 8.
NYRA Transaction In April 2024, the Company closed on the sale of 49% of the United Tote Company (“United Tote”), a wholly owned subsidiary of CDI, to NYRA Content Management Solutions, LLC ("NYRA"), a subsidiary of the New York Racing Association, Inc. 2023 Transactions and Expansions Derby City Gaming Downtown Opening In December 2023, the Company opened Derby City Gaming Downtown in Louisville, Kentucky.
NYRA Transaction In April 2024, the Company closed on the sale of 49% of the United Tote Company ("United Tote"), a wholly owned subsidiary of CDI, to NYRA Content Management Solutions, LLC ("NYRA"), a subsidiary of the New York Racing Association, Inc. 32 Other Business Activities Impairments During the third quarter of 2025, the Company concluded that the completion of the Salem Transaction qualified as a trigger event for impairment testing related to the Chasers Poker Room ("Chasers") indefinite-lived gaming rights intangible.
The 7% increase marked the fourteenth consecutive year that the Company has increased the dividend.
The dividend was payable on January 6, 2026 to shareholders of record as of the close of business on December 5, 2025. The 7% increase marked the fifteenth consecutive year that the Company has increased the dividend.
The following impacted comparability of the Company's net income for the year ended December 31, 2024 compared to the prior year: an $86.2 million after-tax gain on the sale of the Arlington property in the prior year, partially offset by a $15.7 million after-tax decrease in non-cash impairment costs, a $12.8 million after- tax decrease in transaction, pre-opening, and other expense primarily from the settlement of certain liabilities recorded at the time of the Company's November 2022 acquisition of substantially all of the assets of Peninsula Pacific Entertainment LLC, a $5.1 million after-tax increase of other charges and recoveries, net related to non-recurring insurance claim recoveries, and a $0.9 million after-tax decrease of all other charges.
A $33.0 million after-tax increase in impairment charges in the current year primarily due to the impairment of the Chasers' gaming rights, a $3.8 million after-tax increase of other charges and recoveries, net, a $3.5 million after-tax increase in transaction, pre-opening, and other expenses, and a $3.0 million valuation allowance established primarily for unrealizable state deferred tax assets impacted the comparability of the Company's net income for the year ended December 31, 2025 compared to the year ended December 31, 2024.
This increase was partially offset by a $15.6 million decrease from our other wholly owned gaming properties primarily due to inclement weather in January 2024, regional gaming softness, and increased competition; and a $10.2 million decrease due to our decision not to renew the management agreement at Lady Luck at the end of June 2023. • All Other revenue increased $5.7 million primarily due to intercompany revenue related to the captive insurance company that was established in April 2024.
The Kentucky HRM increase was primarily due to a $40.1 million net increase from our Western Kentucky venues, a $14.5 million increase from our Northern Kentucky venues, a $10.0 million increase from our Southwestern venue, and an $8.0 million increase from our Louisville venues. • Wagering Services and Solutions revenue increased $25.6 million due to an $11.8 million increase in TwinSpires Horse Racing primarily due to Derby Week wagering, an $11.1 million increase from Exacta attributable to incremental HRMs in our owned HRM venues, and a $2.7 million increase from our sports betting business. • Gaming revenue increased $3.9 million due to a $33.3 million increase primarily attributable to the opening of the Terre Haute Casino Resort in April 2024, partially offset by an $18.9 million decrease from the cessation of HRM operations in Louisiana, a $5.1 million decrease in Mississippi primarily from temporary roadwork impacting Riverwalk and the impact of a local curfew on Harlow's, and a $5.4 million net decrease at our six other wholly owned gaming properties. • All Other revenue increased $2.1 million primarily due to intercompany revenue related to the captive insurance company that was established in April 2024.
Removed
The Company invested approximately $460 million to construct The Rose Gaming Resort with a 102-room hotel, eight food and beverage options, and 1,650 historical racing machines ("HRMs"). The Rose Gaming Resort has the potential to be expanded to up to 1,800 HRMs.
Added
Casino Salem The Company acquired 90% of the outstanding equity interests related to Casino Salem (the "Salem Transaction") in Salem, New Hampshire in August 2025. The Company announced in January 2026 that Casino Salem will be redeveloped as Rockingham Grand Casino ("Rockingham"). Rockingham will occupy a 160,000 square-foot facility at Rockingham Mall.
Removed
The Company invested approximately $90 million to develop Derby City Gaming Downtown with a gaming area, a main-level sports bar with a stage for live entertainment, retail sports betting, a premium bourbon bar, and an elegant wine lounge for guests, including locals, tourists, and convention attendees.
Added
The venue will feature 825 historical racing machines, 32 table games, 12 electronic table game seats, a 900-seat live entertainment venue, food and beverage offerings, including a center bar and full-service sports bar and restaurant. The Company plans to open Rockingham in mid-2027 with an expected capital investment of $180-200 million.
Removed
Exacta Systems, LLC Acquisition On August 22, 2023, the Company completed its acquisition of Exacta Systems, LLC ("Exacta Transaction"). Exacta Systems, LLC ("Exacta") is a leading provider of central determinant system technology in HRMs across the country.
Added
Rosie's Richmond The Company completed the expansion of Rosie's Richmond in Richmond, Virginia, with the addition of 450 HRMs in August 2025. Rosie's Richmond now has 1,200 HRMs, food and beverage offerings, a center bar, and a simulcast wagering area.
Removed
Exacta’s system architecture supports multiple game vendors and virtually unlimited math modeling capabilities on a single central determinant system enabling Exacta to deliver a diverse gaming library to Company owned and third-party HRM entertainment venues in Virginia, Kentucky, Wyoming, New Hampshire, and is expanding internationally.
Added
Roseshire Gaming Parlor Roseshire Gaming Parlor in Henrico County, Virginia opened in September 2025 with 175 HRMs, food and beverage offerings, and a simulcast wagering area. 2024 Transactions and Expansions The Rose Gaming Resort Opening In November 2024, the Company opened The Rose Gaming Resort approximately 30 miles south of Washington D.C.
Removed
Lady Luck Casino Nemacolin Agreement In June 2023, the Company's management agreement for Lady Luck Casino Nemacolin ("Lady Luck") in Farmington, Pennsylvania expired and was not renewed. The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.
Added
The Rose Gaming Resort opened with 1,650 HRMs, a hotel, food and beverage offerings, and a simulcast wagering area. Terre Haute Casino Resort Opening In April 2024, the Company opened the Terre Haute Casino Resort in Terre Haute, Indiana.
Removed
Derby City Gaming & Hotel Expansion In June 2023, the Company invested approximately $78 million to expand the Derby City Gaming facility in Louisville, Kentucky and build a five-story hotel with 123 rooms including amenities to better serve and attract guests.
Added
At the time the Company acquired Chasers, the valuation of the gaming rights contemplated a future expansion of the existing operations in Salem, New Hampshire. Given the completion of the Salem Transaction, the Company now intends to open Rockingham and does not plan to expand Chasers.
Removed
The expansion included a VIP gaming area, a new sports bar, a stage for live entertainment, and an upscale-casual restaurant and bar. 31 Arlington Sale On February 15, 2023, the Company closed on the sale of the Arlington property in Arlington Heights, Illinois. We sold 326-acres to the Chicago Bears for $197.2 million.
Added
Because the Company does not currently intend to expand Chasers, the Company settled an outstanding liability owed to the former owners of Chasers, related to the Chasers' gaming rights, in the amount of $10.0 million. The settlement of the noncurrent liability resulted in a gain of $40.0 million in the third quarter of 2025.
Removed
The net proceeds of $195.7 million were used to pay down the outstanding balance amount on our revolving credit facility that was drawn on to fund the acquisition of substantially all the assets of Peninsula Pacific Entertainment LLC.
Added
Given the completion of the Salem Transaction and the settlement of the liability related to the Chasers' gaming rights, the Company evaluated and subsequently updated the projected cash flows and discount rate related to the Chasers' gaming rights.
Removed
Other Business Activities Impairment During the quarter ended June 30, 2023, the Company evaluated economic conditions subsequent to the date of our annual impairment assessment on April 1, 2023, including competition in the market and inflationary pressures, which increased during the second quarter of 2023, and impacted the performance and outlook of Presque Isle Downs and Casino ("Presque Isle").
Added
As a result of this assessment, the Company recognized a non-cash impairment charge of $85.1 million in the third quarter of 2025 for the entire value of the Chasers' gaming rights, which are included in the Live and Historical Racing segment.
Removed
As a result, the Company concluded that a trigger event for impairment testing occurred related to the Presque Isle gaming rights, trademark, and the reporting unit's goodwill at the end of the second quarter. Based on the trigger event, the Company evaluated and subsequently updated the projected cash flows and discount rate to reflect the economic environment at that time.
Added
The renovations updated seating options and created a more upscale social environment with new concessions, bars, and wagering windows. ◦ We announced NBC Sports will showcase the Kentucky Oaks in prime time for the first time ever in 2026. ◦ We are investing up to $30.0 million to renovate the existing Finish Line Suites and The Mansion for the 152nd Kentucky Derby in May 2026. ◦ We are investing $280.0 to $300.0 million to build a new building on the first turn of the Churchill Downs Racetrack between the First Turn Club and the Skye Terrace.
Removed
Stock Split Effective May 22, 2023, the Company's common stock was split two-for-one with a proportionate increase in the number of its authorized shares of common stock. For additional information, refer to Note 9, Shareholders' Equity to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Added
The Company anticipates construction of this new building will begin following the 2026 Kentucky Derby and will be completed by the 2028 Kentucky Derby. • Kentucky: ◦ Western Kentucky: Opened Owensboro Racing & Gaming ("Owensboro") in Owensboro, Kentucky in February 2025 with 600 HRMs, food and beverage offerings, a retail sportsbook, and a simulcast wagering area. ◦ Southwestern Kentucky: Held the grand opening for Marshall Yards Racing & Gaming ("Marshall Yards") on February 25, 2026 in Calvert City, Kentucky.
Removed
We delivered strong growth in net revenue, operating income, net income, and Adjusted EBITDA compared to fiscal year 2023: • Net revenue was $2.7 billion, up $272.6 million or 11.1%; • Net income was $426.8 million, up $9.5 million or 2.3%; • Adjusted EBITDA was $1.2 billion, up $135.3 million, or 13.2%; • Cash from operations was $771.7 million, up $166.4 million or 27.5%.
Added
The new HRM entertainment venue has 225 HRMs, a sports bar, a retail sportsbook, and a simulcast wagering area. • Virginia: ◦ Northern Virginia: Continued to grow The Rose Gaming Resort ("The Rose") in Dumfries, Virginia during its first full year of operation.
Removed
This multi-year project fundamentally improves the entire venue for every guest and provides a foundation to further innovate for years to come. ◦ We extended the agreement with NBC Sports to continue hosting the Kentucky Derby on NBC and Peacock through 2032. ◦ We announced the Starting Gate Pavilion and Courtyard renovation to be open for the 151st Kentucky Derby. • Kentucky HRMs: ◦ Owensboro Racing & Gaming: Constructed a new HRM entertainment venue that opened in February 2025 in Owensboro, Kentucky. ◦ Marshall Yards Racing & Gaming: Announced a new HRM entertainment venue near Paducah, Kentucky, that will open in the first quarter of 2026. • Virginia HRMs: ◦ The Rose Gaming Resort: Opened a world class entertainment resort in Dumfries, Virginia in November 2024 that includes 1,650 HRMs, eight bars and restaurants, and a hotel with over 100 rooms and event space. ◦ Richmond Expansion: Announced plans to further expand the Richmond, Virginia HRM venue by 450 HRMs. ◦ Roseshire Henrico County: Announced plans to open a new HRM entertainment venue in Henrico County, Virginia that will include 175 HRMs.
Added
The Rose has 1,610 HRMs, a 102-room hotel, food and beverage offerings, a simulcast wagering area, and event space . ◦ Central Virginia: ▪ Completed the expansion of the Richmond, Virginia HRM in August 2025. ▪ Opened Roseshire Gaming Parlor ("Roseshire") in Henrico County in September 2025 with 175 HRMs, food and beverage offerings, and a simulcast wagering area. • New Hampshire: Acquired 90% of the outstanding equity interests related to Casino Salem in Salem, New Hampshire in August 2025.
Removed
Gaming Segment: • Adjusted EBITDA was $506.9 million, up $18.3 million or 3.7% from fiscal year 2023. • Terre Haute Casino Resort: Opened the Terre Haute Casino Resort in April 2024 and luxury 122-room hotel in May 2024 that includes over 1,000 slot machines, table games, a state-of-the-art retail sportsbook, a 400,000 square-foot entertainment venue, and several food and drink offerings.
Added
The Company announced in January 2026 that Casino Salem will be redeveloped as Rockingham Grand Casino ("Rockingham"). Rockingham will occupy a 160,000 square-foot facility at Rockingham Mall.
Removed
The Company’s five-year total shareholder return for 2024 was 97.6% compared to 94.9% for the Russell 1000 and 97.0% for the S&P 500. The preceding shareholder return calculations assume dividends are reinvested. We remain committed to delivering strong financial results and long-term sustainable growth.
Added
The venue will feature 825 historical racing machines, 32 table games, 12 electronic table game seats, a 900-seat live entertainment venue, and several food and beverage concepts, including a center bar and full-service sports bar and 34 restaurant. The Company plans to open Rockingham in mid-2027 with an expected capital investment of $180.0 to $200.0 million.
Removed
All Other net revenue decreased $0.8 million. • Operating income increased $145.0 million driven by a $105.1 million increase from the Live and Historical Racing segment primarily from a record-breaking Derby Week at Churchill Downs Racetrack, lower fees related to the Exacta technology used in the Company's HRM operations, the opening of the Rosie's Emporia HRM venue and The Rose Gaming Resort, and growth at our other HRM venues, a $21.6 million increase from the Gaming segment primarily from the opening of the Terre Haute Casino Resort, partially offset by inclement weather in January 2024, regional 34 gaming softness, and increased competition, a $20.7 million increase from a reduction of non-cash impairment costs, a $16.9 million benefit to transaction expense primarily related to the settlement of certain liabilities recorded at the time of the Company's November 2022 acquisition of substantially all of the assets of Peninsula Pacific Entertainment LLC, and a $16.3 million increase in the Wagering Services and Solutions segment primarily from our Exacta business.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOn December 31, 2024, we had $1.8 billion outstanding under our Credit Agreement, which bears interest at SOFR based variable rates. We are exposed to market risk on variable rate debt due to potential adverse changes in these rates.
Biggest changeOn December 31, 2025, we had $2.1 billion outstanding under our Credit Agreement, which bears interest at SOFR based variable rates. We are exposed to market risk on variable rate debt due to potential adverse changes in these rates.
Assuming the outstanding balance of the debt facility remains constant, a one-percentage point increase in the SOFR rate would reduce net income and cash flows from operating activities by $13.3 million. 45
Assuming the outstanding balance of the debt facility remains constant, a one-percentage point increase in the SOFR rate would reduce net income and cash flows from operating activities by $14.7 million. 46

Other CHDN 10-K year-over-year comparisons