Oct 29, 2026 earnings call — Asset sales and growth at Churchill Downs
Company reported record net revenue of $696 million and record adjusted EBITDA of $264 million.
Revenue $0.7B (est $0.7B) · EPS $1.23 (est $1.13)
Key quotes
"We expect to announce executed transactions for the properties by year-end."
"The 2027 Kentucky Derby will be the kickoff for the Thoroughbred Championship Series."
"We are planning to roll out craps ETGs around the end of the year."
Analyst Q&A 12
Thoroughbred Championship Series (TCS)
Q (Barry Jonas · Truist): Analyst asked how TCS will drive economics, the ramp timeline, and how big it can become.
A: Management said TCS links strong race days to create new big days and will drive wagering and admission revenue right away. They expect sponsorship and licensing to grow as they prove the product, but they must ramp and learn as they go.
"And what the fans, both casual and serious, hardcore fans like is the very best racing against each other." — William C. Carstanjen (CEO)
Derby Week plans for 2027
Q (Brandt Montour · Barclays): Analyst asked what programming and events to expect for Derby Week 2027 and drivers for incremental growth.
A: Management said 2027 is ahead of 2026 on key metrics and they will keep focusing on Derby Week. They plan to make each day unique and will invest more to build events like Oaks back on national TV.
"As I mentioned in my earnings comments, where we are now, 2027 Derby versus 2026, we're ahead on all the key metrics." — William C. Carstanjen (CEO)
Sponsorship opportunities with TCS
Q (David Katz · Jefferies): Analyst asked how sponsorship around the Derby can expand and how TCS affects sponsorship sales.
A: Management said the Visa deal is a good start and that TCS will create more content and events for sponsors. They will work with current partners and racing associations to expand sponsorship assets across a longer set of properties.
"So I think you'll see us focus not just in 2027 but beyond on how we can incorporate what we're doing with the TCS to give our sponsorship -- our sponsors more assets and more properties around which they can drive value." — William C. Carstanjen (CEO)
Virginia supply and machine moves
Q (Daniel Politzer · JPMorgan): Analyst asked about new supply in Virginia, referendum locations, and how supply/demand and machine moves affect organic EBITDA growth.
A: Management highlighted Northern Virginia's strong growth and said the market is still immature with upside. They noted they hold 10 licenses and 5,000 machines and can move machines and licenses across the state to match demand.
"We have this unique right with our 10 licenses in the jurisdiction and our 5,000 machines to move machines and licenses around based on what we see in the marketplace." — William C. Carstanjen (CEO)
Asset sales progress and timing
Q (Shaun Kelley · BofA): Analyst asked for an update on the asset sale process, buyer types, interest level, and whether sales will be single or multiple transactions.
A: Management said the asset-sale process is going very well and they plan to execute transactions by year-end. They expect a series of smaller transactions; properties were marketed individually and may go to different buyers or the same buyer on different assets.
"So as to the nature of each transaction, I think you might have been referring to is it one big transaction or a series of smaller transactions." — William C. Carstanjen (CEO)
HRM games and electronic table games
Q (Chad Beynon · Macquarie Capital): Analyst asked how new game content and suppliers from G2E could lift win-per-day, and about the ETG segment and its addressable market.
A: Management said HRM growth depends on getting more manufacturers to convert Class III titles into HRM versions and that this is ongoing work. They also stressed ETGs are strategically important, cited roulette success, and expect to add craps and blackjack to create a suite of ETG products.
"So the story of HRMs for us has been a story of attracting additional game manufacturers and getting them to do the work with us to convert some of their Class III titles to HRMs." — William C. Carstanjen (CEO)
Rockingham ramp and Derby EBITDA expectations
Q (Jordan Bender · Citizens): Analyst asked for milestones or win-per-day/margin expectations for Rockingham ramp and to parameterize the comment about meaningful Derby EBITDA growth.
A: Management said Rockingham Grand will open mid next year and will feature around 800 to 850 HRMs and slots and 32 table games, located on the New Hampshire-Massachusetts border. For the Derby, they see stronger numbers versus last year and highlighted Victory Run (construction in 2027, opening 2028) as a major future driver.
"It will have around 800 to 850 HRMs and slots." — William C. Carstanjen (CEO)
CDRT's share and margin profile
Q (Raymond Bowers · Wells Fargo): Analyst asked how the racetrack business might grow as a percent of the company and whether new races will also have high margins.
A: Management called Churchill Downs Racetrack and the Kentucky Derby the crown jewel and said they will continue to compound growth with ongoing projects. They confirmed Derby-related activities have very high margins and that as regional gaming assets are sold, the Derby's share and margin importance will grow.
"Churchill Downs Racetrack and the Kentucky Derby is the crown jewel of our company." — William C. Carstanjen (CEO)
Premium ticket sales pacing
Q (Jeffrey Stantial · Stifel): Analyst asked what share of premium ticket capacity is typically sold by this point and if any sections are selling out or pricing stronger than expected.
A: Management said premium ticket sales are well ahead of last year and that about 40% of premium inventory is sold, but they manage timing (a trade secret) to yield seating and hold inventory for later. They noted multiyear PSLs are strong and unallocated public tickets are pacing well, so they are throttling sales.
"But the important thing is the process and the timing for which we move different ticketing is sort of a trade secret." — William C. Carstanjen (CEO)
Racing margin structure and returns
Q (Peter Supino · Wolfe): Analyst asked about Racing segment margins and expected incremental returns on capital for investments at Churchill Downs.
A: Management said they accept longer payback periods for projects at Churchill Downs because pricing power and experience-based admissions often lead investments to outperform expectations. They focus on enhancing the customer's full experience (not just seats), so projects like Victory Run aim to boost margins through improved overall experience.
"Generally, because we've seen such ability to drive pricing power over time, when we do a project at Churchill Downs Racetrack, we're willing to accept a little longer payback time frame than on other assets we develop in the company, say, a gaming property." — William C. Carstanjen (CEO)
Measuring success beyond financials
Q (Daniel Guglielmo · Capital One): Analyst asked what qualitative metrics they use to measure success of racing initiatives and the time horizon for strategy and investments.
A: Management said they track qualitative metrics like storytelling, television ratings, and social media impressions closely because these feed long-term wagering, sponsorship and media value. They want to extend Derby skills across a longer TCS season (5 months) to build comparable value over time.
"So we spent a lot of time thinking about the storytelling around our event." — William C. Carstanjen (CEO)
Owner/trainer buy-in and purses for TCS races
Q (Joseph Stauff · Susquehanna): Analyst asked about owner and trainer support for the TCS and the historical betting handle for smaller races like Matt Winn and Jim Dandy.
A: Management said owner and trainer support has been exceptional and that they are increasing purses on races like Jim Dandy and Matt Winn to at least $1 million, plus a $5 million series bonus, to create strong economic incentives. They noted these races are already big wagering days within the industry and they aim to raise prestige and purse dollars to grow them further.
"So let me make sure I capture all the elements of that. So first, what's been the support and the buy-in from owners and trainers into the Thoroughbred Championship Series." — William C. Carstanjen (CEO)