Kentucky Derby Betting Sets Record, EBITDA Slightly Off 2024 Pace

Kentucky Derby Betting Sets Record, EBITDA Slightly Off 2024 Pace

Despite unfavorable weather and what some analysts are calling a slight decline in ticket sales due to US tariff fluctuations, Churchill Downs (NASDAQ: CHDN) reported another year of record betting on the Kentucky Derby. 

Total betting from all sources for Saturday’s race reached $234.4 million, surpassing last year’s record of $210.7 million. The gaming company stated that the total betting on Kentucky Derby Day reached $349 million across all sources, setting a new record and surpassing the $320.5 million achieved in 2024. During Derby Week overall, total handle from all sources reached $473.9 million, surpassing the former record of $446.6 million established last year. The operator’s TwinSpires division achieved record highs as well.

"TwinSpires, the official betting partner of the Kentucky Derby, handled a new record of $108.0 million in wagering on Churchill Downs races for the Kentucky Derby Day program, compared to last year’s record of $92.1 million, including all settled future wagers and affiliate wagering. TwinSpires’ handle on the Kentucky Derby race was a new record of $73.0 million, beating last year’s record of $60.9 million, including all settled future wagers and affiliate wagering,” according to a statement.

Churchill Downs stated that adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the Derby will rank among the top two performances in the operator's history, though it will fall short by $2 million to $4 million compared to last year's record figures. 

Derby Earnings Might Have Been Affected by Broader Economic Forces 

Churchill Downs' shares have fallen by 16.60% in the last month, encompassing the time frame of the company's first-quarter earnings report that triggered a significant sell-off. 

The update featured remarks from the company halting capital investment at its namesake Kentucky racetrack, referring to tariff risks. In February, the operator informed investors that it could allocate up to $920 million by 2028 for enhancements to the Conservatory, the infield, and the Skye, with as much as $400 million of that spending anticipated to occur this year. 

Those plans are currently postponed due to uncertainty in the US economy, and it seems that this lack of clarity might have affected some potential Derby attendees. 

“The primary reason for the decline in earnings is that ticket sales over the final 30 days up to the event were lower than expected,” noted Jefferies analyst David Katz in a note out Sunday. “The reasons for the missed expectations included the closer-in sales of some newer seating areas and likely poor weather on Derby weekend.”

Derby Remains a Key Long-Term Growth Catalyst for Churchill Downs 

There is plenty of speculation about how tariffs might impact the gaming industry, and some proof indicates that operators of physical gaming establishments are struggling due to the Trump Administration's attempts to impose duties on US trade partners. 

Year-to-date price movements in gaming stocks, such as Churchill Downs, indicate investor concerns, yet in the long run, the Derby continues to be a key element of the Churchill investment strategy, and it’s probable that the operator isn’t entirely retreating from spending initiatives that might enhance growth. 

“Current management commentary is that the growth trajectory remains long and positive and capital investment should continue,” adds Katz. “Our thesis on the Derby has been that the continued investment in more seating and revenue-generating amenities should have a long tail, which we believe is still valid.”