Shares of Churchill Downs (NASDAQ: CHDN) surged during after-hours trading following the racetrack operator’s announcement of impressive second-quarter results that exceeded forecasts, alongside an acquisition deal and updates on projects at its iconic Kentucky racecourse.
The gaming firm announced it has finalized a deal to reacquire the 49% interest in United Tote that it sold to a division of the New York Racing Association (NYRA) in April 2024. At that time, NYRA committed to using United Tote for its racetrack and pari-mutuel wagering systems. The terms of the new agreement extend this partnership until 2035.
“This acquisition aligns with Churchill Downs’ (CDI) long-term goals to control and integrate essential technologies and services tied to pari-mutuel wagering and horse racing, solidifying the Company’s role as a key distributor of horse racing content and provider of racing services,” the statement read. “Furthermore, United Tote enhances CDI’s capability to innovate, deploy, and manage vital wagering technology linked to horse racing.”
The financial specifics of the acquisition, expected to conclude on August 5, have not been disclosed. United Tote is known for creating and operating pari-mutuel wagering systems utilized by racetracks, off-track betting (OTB) venues, and various gaming companies.
Churchill Downs Prepares for 2027 Kentucky Derby
After a record-breaking 2026 Kentucky Derby where Derby Week wagering activity set new EBITDA highs, Churchill Downs updated its shareholders on three key projects at its renowned Kentucky track.
One of these projects is Victory Run, slated to be established between the First Turn Club and the Skye Terrace. Last October, the company estimated expenditures of $280 million to $300 million on this venture. Although specific figures were not reiterated today, the company anticipates that improvements to Victory Run will be ready for the 2028 Derby, with some temporary facilities available for the 2027 Run for the Roses.
The Homestretch expansion, featuring new dining options and additional VIP seating, is also expected to be completed in time for the 2027 Derby alongside upgrades to infield seating.
“We plan to remove the tote boards to create new guest experiences in a premium area of the infield that offers stunning views of the homestretch, the finish line, and the Derby winner’s trophy presentation,” the company detailed regarding the infield renovation. “We will introduce 1,400 temporary seats and will trial a new infield cabana experience, featuring 500 covered reserved seats along the turf course.”
Churchill Downs Reports Strong Q2 Performance
Thanks in part to the successful Derby Week, Churchill Downs announced robust quarterly figures. For the June quarter, the operator reported earnings of $3.45 per share on revenue of $980 million, surpassing analyst expectations of $3.43 for earnings and $987.5 million in revenue.
This revenue figure and adjusted EBITDA of $477 million represent record-setting achievements. Revenue from the company’s Kentucky and Virginia historical racing machine (HRM) operations grew by $12 million and $1 million, respectively.