Published on: March 16, 2026, 11:15h.
Updated on: March 16, 2026, 11:15h.
- Virginia legislators recently approved two gaming expansion initiatives
- Churchill Downs and MGM are anticipated to lobby against a casino in Fairfax County
- Analyst confirms that Churchill Downs stock remains a “buy”
Churchill Downs (NASDAQ: CHDN) has witnessed a decline of 23.40% year-to-date. A portion of this downturn is likely linked to Virginia—a key market for the operator—passing multiple gaming expansion bills. Nevertheless, some analysts are advocating for the stock.
In a recent report, Stifel analyst Jordan Bender highlights challenges for Churchill Downs in Virginia, particularly due to skill games legislation and the Fairfax County casino proposal. This legislative change suggests new competition for the state’s historical racing machine (HRM) market, where Churchill is a key player.
Bender states, “The bill restricts the total number of machines to 35,000 (down from an estimated 90,000 before the 2023 ban), with a limit of four machines per location (seven for truck stops and two for charitable purposes). Additional factors affecting potential market size include: 1) a 25% tax on machines plus an $800 fixed fee per machine monthly, 2) a maximum of $5 per spin, and 3) the option for localities to implement referendums to prohibit machines.”
Despite the looming risk of increased competition in this vital market, Bender maintains a “buy” recommendation with a price objective of $136, suggesting a potential upside of 57% from current stock levels.
Churchill and MGM Poised to Contest Fairfax County Casino
Governor Abigail Spanberger (D-VA) has a 30-day window to enact the Fairfax County casino legislation. Bender observes that this is uncertain due to her expressed opposition to gaming expansion until a consolidated regulatory framework is established.
The potential development of a casino in Tysons Corner is expected to face significant resistance from both Churchill Downs and MGM Resorts International (NYSE: MGM). Churchill’s $460 million Rose Dumfries gaming venue is approximately 30 minutes from the proposed Fairfax County casino site, while MGM National Harbor, one of the most profitable regional casinos in the US, is located just 20 minutes away.
“We anticipate that CHDN and MGM will actively lobby against the bill, particularly as prior surveys show over 60% local opposition. If the referendum does not pass, it would enter a three-year cooling-off period, which correlates with the 2029 expiration date for SB 756, implying separate legislation would be necessary,” explains Stantial.
The analyst further notes that the chances of voter approval seem slim, but bureaucratic delays could keep the Fairfax County casino issue in the public eye for an additional three years.
Positive Developments for Churchill Downs Stock
Not all updates are negative for Churchill Downs, as the state has postponed iGaming legislation, which is considered favorable for the operator due to its opposition to this form of betting.
Looking ahead, Stantial remarks that Churchill Downs stands out as one of the most promising growth stories in the gaming sector, citing strategic acquisitions and a pipeline of high-return expansion projects. He also highlights that the shares are well-positioned as the Kentucky Derby approaches.
“While viewership for horse racing faces ongoing challenges, we foresee growth potential for online sports betting operators to expand the overall addressable market. Meanwhile, CHDN is developing a distinct competitive advantage in live, historical, and online horse racing,” concludes the analyst. “The company’s valuation is near the upper limit of its peer group, which we believe is justified given CHDN’s unique growth catalysts and asset portfolio. Thus, we recommend buying the shares.”