Record-breaking Kentucky Derby Betting amid Slight Slip in EBITDA compared to 2024 Estimates
On May 5, 2025, under a gloomy sky and the alleged impact of US tariff volatility, Churchill Downs (NASDAQ: CHDN) managed to set new records with the Kentucky Derby.
The all-sources betting on Saturday's race reached a whopping $234.4 million, surpassing the previous record of $210.7 million set in 2024. The Kentucky Derby Day program also set a record with all-sources betting of $349 million, surpassing the previous high of $320.5 million. For the Derby Week as a whole, all-sources handle exceeded $473.9 million, shattering the previous record of $446.6 million. TwinSpires, the official betting partner of the Kentucky Derby, also achieved new records with $108.0 million in wagering on Churchill Downs races for the Kentucky Derby Day program and a record $73.0 million on the Kentucky Derby race.
However, despite these impressive numbers, Churchill Downs predicted adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the Derby would be one of the two lowest results in the operator's history, approximately $2 million to $4 million below the record pace set last year. The primary reason attributed to this decline is a decrease in ticket sales over the final 30 days before the event, most likely due to uncertainties stemming from weather conditions and the impact of US tariff volatility.
Shares of Churchill Downs have fallen by 16.60% over the preceding month, apparently in response to the operator's first-quarter earnings report, which sparked a major sell-off. The report included a pause in capital spending at the eponymous Kentucky track due to concerns over tariff risk. Initially, Churchill Downs intended to spend as much as $920 million through 2028 on improving the Conservatory, the infield, and the Skye, with up to $400 million of those expenditures expected to occur this year. These plans are now on hold, leading to speculation that some would-be Derby attendees might have stayed away for that reason.
In concluding remarks, analyst David Katz, citing the continued investment in more seating and revenue-generating amenities, believes that the long-term growth trajectory of Churchill Downs remains positive, with capital investment likely to resume in the future.
- The financial success of horse racing, such as the Kentucky Derby, has expanded to new heights, with sports betting companies like TwinSpires also setting records in wagering.
- The sports industry, including horse racing, is strongly linked to the finance sector, as demonstrated by the record-breaking betting figures during the Kentucky Derby.
- Despite setting new records in sports-betting revenues, Churchill Downs is anticipated to report one of the lowest adjusted EBITDA results in its history due to declining ticket sales and concerns over tariff volatility.
- The uncertainties stemming from weather conditions and tariff volatility may have contributed to the drop in Church Downs' share price, particularly due to the delay in capital spending on the Kentucky track.
