In a spectacular and unprecedented display of betting enthusiasm, Churchill Downs (NASDAQ: CHDN) observed a surge in shares on Monday following the revelation that Saturday’s iconic Kentucky Derby generated an unparalleled betting figure. The legendary horse, Mystik Dan, an 18-1 shot at glory, seized the win at the 150th competition of the first leg of the Triple Crown.
The fanfare surrounding the Kentucky Derby was far-reaching and historic. According to a statement released by the Louisville-based game designing firm, the encompassing wagering from all sources on the Kentucky Derby Day event set a spanking new record of $320.5 million, sailing past the contrastingly less figure of $288.7 million observed last year. In addition, the total wagers placed on the actual derby race resulted in a staggering new record of $210.7 million, toppling over the previous landmark of $188.7 million set in 2023. Furthermore, the wagering for the entire Derby Week soared to a massive $446.6 million, once again shattering the 2023 record of $412.0 million.
Investors in Churchill Downs are reveling in the opportune timing of this Derby, insomuch that the firm experienced a surge of a whopping 12.28% over the last month, thanks in part to the company’s favorable first-quarter earnings report released in late April.
Meanwhile, the operator’s TwinSpires platform similarly touched new heights during this year’s Derby. The handle for the Derby Day program at TwinSpires reached a record-breaking $92.1 million, handily overtaking the previous year’s figure of $75.5 million. As for the Derby itself, TwinSpires saw wagers amassing up to an impressive $60.9 million, thus setting a new record that stands well above last year’s peak of $48.9 million. The platform’s success was further amplified by the best viewership figures for the Derby on NBC in 35 years.
In fact, TwinSpires significantly contributed to Churchill Downs’ record Derby Week earnings before interest, taxes, depreciation, and amortization, earning between $26 million to $28 million. The news was underscored by Churchill’s CEO Bill Carstanjen, who further noted the addition of new amenities at the legendary Kentucky racetrack, including a new paddock, as contributing factors.
The firm’s growth is not solely restricted to domestic events and betting platforms. While the Kentucky Derby is a cherished event in the US sports calendar, it also brings together horses owned by international entities. Although Derby betting in Japan is a relatively minor part of the overall landscape, it is steadily growing. And with Japanese horses—Forever Young and T O Password—earning third and fifth places respectively in the Derby, Churchill Downs’ outreach to international markets seems to be paying dividends.
Churchill Downs anticipates that the successful performances by Japanese horses will help cultivate further interest overseas, thereby unlocking a sizeable wagering total addressable market and drawing incremental wealthy international visitation. It is noted that the company’s expansion into historical racing machine (HRM) venues in Kentucky and Virginia, as well as the introduction of a new regional casino in Terre Haute, Indiana, may act as potential catalysts for stock growth in the future.
