On February 21, 2021, the Securities and Exchange Commission released a 10K for Churchill Downs, Inc. (CDI), reporting operating results for the year 2020.

During 2020, CDI opened Oak Grove historical racing facility and Oak Grove hotel.  Oak Grove is near Fort Campbell, Kentucky, just across the Tennessee border.  CDI also opened Newport Racing and Gaming in Kentucky, south of Cincinnati, Ohio.  (Although the Kentucky Supreme Court in 2020 ruled elements of historical racing gaming to be illegal, the Kentucky legislature on February 1, 2021 approved clarifying legislation and the governor signed the bill into law.)

Net revenue for 2020 was $1.054 million, down by 21% from 2019, primarily due to pandemic-caused suspension of gaming operations.  While gaming operations were idle, net revenue from online wagering on horse racing via TwinSpires soared to $405 million, up 39% from 2019. 

CDI had a net loss of $81.9 million in 2020 compared to net income of $137.5 million the previous year.  However, after adjustments, such as a tax benefit from the CARES Act, CDI had net income of $33.3 million for 2020.

Adjusted diluted earnings per share for 2020 were $0.83 in contrast to $4.43 in 2019. 

CDI identifies four business segments within its corporate umbrella:  gaming, online wagering, Churchill Downs racetrack, and all other, which includes racing operations at its remaining racetracks and United Tote.

Gaming had net revenue of $443.9 million in 2020 vs. $694.8 million in 2019.  Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for this segment was $176.7 million in 2020 and $280.9 million in 2019.

Net revenue for online wagering was $409.9 million in 2020 and $291.6 million in 2019.  Adjusted EBITDA was $109.3 million in 2020 and $66.3 million in 2019.

Net revenue for Churchill Downs racetrack was $160.5 million in 2020 and $289.4 million in 2019. Adjusted EBITDA for 2020 was $38.3 million versus $137.7 million in 2019. CDI reported that “the loss of ticket revenue, fewer sponsorships, and lower wagering during Derby week” resulted in a $121.8 million decline of revenue from 2019.

The catchall “all other” segment had net revenue in 2020 of $74.7 million and $84.2 million in 2019.  Adjusted EBITDA was negative $37.8 million in 2020 and negative $33.5 million in 2019.

CDI stock (symbol CHDN) was $137.87 per share at the start of 2020 and closed the year at $196.44, with a low of $52.90 per share coming at the outset of the COVID-19 pandemic.  At this writing in 2021, CDI stock is at $238.92 per share.

(On Wednesday, March 9, 2021, Horse Racing Business will discuss the recently announced decision by CDI to sell the land Arlington Park racetrack near Chicago occupies, particularly the ramifications for the U. S. racing and breeding enterprise.)

Horse Racing Business 2021


Attracted by the 2021 $20 million Saudi Cup and an amazingly rich undercard, I watched a lot of horse racing over the weekend on TVG and Fox Sports.  Maybe the on-air expert handicappers were having a run of bad luck, but overall the value of their picks was, to be charitable, lacking.

This made me reflect on the wondrous landing of Perseverance Mars rover several days earlier.  The rover, whose mission is to search for evidence of ancient life on the Red Planet, touched down on the Mars surface some 293 million miles from Earth.  The rover was programmed to be entirely on its own because the 11-minute communication gap between home base and Mars prevented NASA from directing the landing remotely. 

Why is it that such an amazing technological feat can be achieved whereas skilled horse-racing handicappers, with a vast amount of past-performance data upon which to develop models, struggle to pick winners?  The answer lies in the fact that missions like Perseverance Mars rely on the most advanced engineering knowledge and the laws of mathematics and physics.  By contrast, handicapping horse races falls more into the domain of art rather than science.

Plenty of math whizzes and computer scientists have over the years put their skills to work handicapping horse races…and some have done well.  However, even the most quantitative approaches to handicapping are highly probabilistic.  Indeed, there are many ways to win or lose a horse race that can’t be accounted for in a mathematical model. 

What would happen if the brainpower and scientific know-how of NASA engineers and scientists were put to work handicapping?  I suspect that the effort would produce an above-average outcome but would come nowhere near the accuracy embodied in the Mars landing and exploration.  The rocket scientists would be confounded by inexplicable race results just like the rest of us.

Copyright © 2021 Horse Racing Business


WellChild is a national charity based in Cheltenham, England, focusing on in-home care for seriously ill children. WellChild’s projected income decreased by 60% as a result of the COVID-19 pandemic. Compounding the financial shortfall, the threat of COVID-19 to in-home caregivers and a surge in demand from families needing such care for their children were devastating.

Also owing to the pandemic, corporate sponsors of sporting events and the arts curtailed or eliminated their participation, at least temporarily.  Magners, which had sponsored the prestigious Cheltenham Gold Cup jump race in 2019 and 2020, in December 2020 declined to renew in 2021 even though the company had originally agreed to a 3-year partnership.  (Magners is an Irish cider brand.)

The Jockey Club of Britain owns and operates the Cheltenham Racecourse and the four-day Cheltenham Festival, which cards top-flight races. After losing the Magners sponsorship so close to the 2021 Festival, the Jockey Club took up the cause of improving WellChild’s financial position. As a result, the entire Festival for 2021 is now The Festival Supporting WellChild. Moreover, on March 19, 2021, the feature race of the entire event will be run as the WellChild Cheltenham Gold Cup.

The objective is to foster awareness of WellChild and to raise money for its noble cause.  While the Cheltenham races will not have spectators, they will be watched by several million people on ITV Racing, both on television and online streaming.

Colin Dyer, CEO of WellChild, commented:

“This has been a challenging year for our organization and the families we support, many of whom have felt hidden and isolated more than ever before. However, we have responded at every turn to ensure that families have access to the support and equipment they need to thrive at home.  This partnership will bring a much-needed boost to our organization after a challenging period and will help to ensure that we are ready to respond again in 2021 and beyond.”

Sir Anthony McCoy, who won the Gold Cup twice, said: “What WellChild does is just so important and I’m really pleased that the best four days in our sport are being put forward to help.  Racing is a charitable sport, full of generous people and I’m sure they’ll get right behind this.”

The Jockey Club turned a very bad situation for itself (losing a title sponsor and running a Festival without fans) into an opportunity to give a much-needed boost to an organization that so many struggling families depend on.

Well done!

Horse Racing Business 2021