William C. Carstanjen Leads the Next Phase: Churchill Downs Incorporated Posts $663M Q1 While Scaling for Growth
Churchill Downs Incorporated reported Q1 2026 net revenue of $663m, up 3% year-on-year, with adjusted EBITDA increasing 5% to $257m, reflecting continued expansion in historical racing machines (HRMs) and stable wagering performance.
Net income rose 8% to $83m, while leverage remained at 3.8x, indicating a balance between growth investment and shareholder returns, including $31m distributed via dividends.
HRM expansion continues to drive core earnings growth
Live and Historical Racing revenue increased 9% to $301m, with EBITDA rising to $113m, driven primarily by HRM venue expansion across Kentucky, Virginia and New Hampshire.
The performance confirms HRMs as CDI’s dominant earnings engine, delivering structurally higher margins and lower volatility than both traditional racing and regional casino gaming. Growth was partially offset by softer performance at the flagship Churchill Downs Racetrack, reinforcing the shift away from legacy racing dependence.
Wagering segment stable as cost pressures ease
Wagering Services and Solutions delivered modest growth, with revenue reaching $118m and EBITDA increasing to $45m.
Profitability expansion was cost-led rather than revenue-driven, highlighting limited upside without meaningful scale or digital acceleration.
Gaming revenue declines as portfolio reshapes
Gaming revenue fell 2% to $262m, with EBITDA broadly flat at $123m.
The decline was driven by the exit from Louisiana HRM operations in 2025 and weaker performance across select regional assets, partially offset by gains in New York, Indiana and Maryland.
This reflects an active portfolio reshaping, with CDI exiting lower-return assets while relying on stronger jurisdictions and equity investments to stabilise earnings.
Capital deployment signals long-term racing and HRM strategy
CDI continues to allocate capital toward asset-heavy expansion and IP control:
- $180–200m planned investment in the Rockingham Grand Casino (New Hampshire), targeting a 2027 opening
- Opening of Marshall Yards Racing & Gaming in Kentucky
- $85m acquisition of the Preakness Stakes and Black-Eyed Susan Stakes intellectual property
The Preakness acquisition materially strengthens CDI’s control over premium racing IP, expanding monetisation across media rights, sponsorship, and integrated wagering ecosystems.
Strategic takeaway
- HRMs are the primary growth and margin driver
- Traditional gaming is structurally weakening amid exits and regional underperformance
- Racing IP consolidation is strengthening long-term monetisation leverage
CDI is repositioning around controlled assets and regulated HRM expansion, deprioritising pure wagering growth as a primary value driver.
Source: Churchill Downs Incorporated
