Churchill Downs Inc. Brushes Off Prediction Markets, Wary of iGaming in 2025 Earnings Call

While other gaming companies may be leery of prediction markets, Churchill Downs Inc. unabashedly is not. The Louisville-based regional gaming operator made that much clear when it held its quarterly financial call with investment analysts on Thursday.

When asked about the potential impact prediction markets could have on the company – namely, the Kentucky Derby, held in May at the company’s namesake property – CEO Bill Carstanjen cited federal law as Churchill’s reasoning why prediction market operators like Kalshi and Polymarket do not pose a threat.

We operate under a different legal paradigm than other sports offerings in the United States,” Carstanjen explained. “Parimutuel wagering on horse racing is conducted under the Interstate Horse Racing Act, which is a federal umbrella statute that essentially gives us a series of rights…

“So, to take wagers across any forum, whether it be a sports wagering platform, another horse racing platform, such as an (advanced-deposit wagering) or prediction markets platform, you need our expressed consent. You can’t just do it without that. So, we haven’t agreed to provide our content to prediction markets… Prediction markets are not a part of the parimutuel wagering on horse racing story, nor would I expect them to be any time in the future.”

While Churchill cites the 1978 law that protects what Carstanjen called the company’s “intellectual property rights” on its content, several states and tribal nations have cited other federal laws in their complaints against Kalshi. That has not stopped Kalshi and its competitors from offering sports contracts nationwide or filing their own lawsuits against states.

The Kentucky Derby is one of the nation’s largest annual sporting events in both prestige and wagering. For the latter, it’s by far the most bet horse race. Last year, bettors wagered more than $234 million on Derby 151.

Historical, Live Racing Help Boost Churchill Revenues

As for the fourth quarter of 2025, Churchill Downs reported record net revenues of $665.9 million. That represented a 7% increase from the $624.2 million the company earned during the quarter in 2024. The company also posted a record EBITDA of $247 million, which was 4% better than the $236.6 million from the fourth quarter in 2024.

For the year, Churchill generated net revenues totaling $2.93 billion. That, too, was a 7% increase from 2024’s $2.73 billion. The company also made gains in adjusted EBITDA, as 2025’s $1.21 billion grew 4% from the previous year’s $1.16 billion.

During Thursday’s call, Carstanjen announced that Churchill Downs would add a seventh day of racing to its eight-day Derby Week event this year. The additional day of racing will take place on Sunday, April 26, one day after the opening night for the Spring Meet.

In off-track developments, Carstanjen noted the company’s historical horse racing (HHR) division continued its strong performance. HHR technology has been used to power slot machine-like games, and earlier this month, Churchill debuted HHR-powered roulette tables at its Kentucky properties. The Kentucky Horse Racing Commission approved HHR-powered table games late last year, and Carstanjen added that the company is looking at ways to create additional HHR-powered games, such as craps and blackjack.

Churchill’s HHR presence goes beyond Kentucky. The company also operates gaming parlors in Virginia and New Hampshire, with Churchill investing up to $200 million in a Salem, N.H., charitable gaming venue that will host 32 table games along with 825 HHR machines. It is expected to open in mid-2027.

The company’s stock price spiked shortly after the bell yesterday, to $92.91 from a $90.37 close, before dropping to as low as $89 in after-hours trading.

Carstanjen: iGaming ‘Bad News’ for Virginia

One potential obstacle to Churchill’s growth in Virginia is the potential for iGaming legalization in the state. Lawmakers in both chambers of the General Assembly have passed bills opening the door for online casinos, but delegates and senators need to iron out significant differences in their measures before a final bill can move ahead.

Even if lawmakers finalize a bill in this session, it they may need to pass it again next year. House members included that provision in their iGaming proposal.

Carstanjen told investment analysts the company believes iGaming is “bad news” for the state. The company’s opposition to online casinos led it to work with Cordish Companies, labor unions and other stakeholders in forming the National Association Against iGaming.

I think it’s important that folks don’t react to the ebbs and flows of the legislative process and wait to see what the end of that process is,” he added. “We remain confident that the legislature and the governor of Virginia will get it right.”

Virginia lawmakers have included hold-harmless funds for land-based casinos in the state that report losses due to iGaming. However, Churchill’s eight HHR gaming venues in the Old Dominion would not be eligible to receive compensation.

It’s not just Virginia where iGaming could affect Churchill’s land-based gaming business. The company’s Oxford Casino Hotel in Maine filed a federal lawsuit against the state in late January to challenge the legalization of iGaming there. The suit claims the law giving iGaming rights to Native American tribes violates for the Maine and U.S. constitutions.

HISA Fees Not Addressed During Call

One issue that did not come up during Thursday’s 45-minute conference call was the claims by the Horseracing Integrity and Safety Authority that Churchill Downs has not paid its fees to the regulatory body.

The New York Times first reported the news last week, noting that if Churchill does not pay $2.4 million in fees, HISA could block interstate wagering on races at the Louisville track and others owned by the company. Should that happen, it could significantly impact the Kentucky Derby.

Churchill Downs helped create the authority established by Congress in 2021. The company backed a proposal by U.S. Sen. Mitch McConnell (R-Ky.) in 2020 to create a national, independent regulatory agency for the racing industry overseen by the Federal Trade Commission. That was based on legislation previously filed by U.S. Reps. Andy Barr (R-Ky.) and Paul Tonko (D-N.Y.) over the course of several years.

However, since its creation, HISA has faced criticism from several racing stakeholders for its high fees as well as the penalties assessed for breaking rules.

A hearing is scheduled for March 11 on the matter. Regardless of the outcome of that hearing, the appeals process will likely bring the matter to either the full HISA board or the FTC.

A Churchill spokesperson told Gambling Insider Thursday afternoon that the company does not comment on pending legal action. A HISA spokesperson told Gambling Insider there were no additional updates to the case.