Churchill Downs Incorporated (CHDN): Marketing Mix Analysis [Dec-2025 Updated]

You're looking for a clear, no-fluff breakdown of Churchill Downs Incorporated's market strategy, and honestly, their four P's show a smart, diversified bet on premium experiences and regional gaming expansion as we close out 2025. As an analyst who has watched this sector for two decades, I see a clear playbook: they are leveraging the cultural cachet of the Kentucky Derby while aggressively deploying high-margin Historical Racing Machines across 14 states, including new 2025 spots in Kentucky and Virginia. This dual focus is reflected in their pricing, which supports high-end hospitality while their digital platform, TwinSpires, helped drive wagering revenue to all-time records, with Derby Day wagering up 9%. Dive in below; this analysis maps their current positioning and what it means for your investment thesis.

Churchill Downs Incorporated (CHDN) - Marketing Mix: Product

The product element for Churchill Downs Incorporated centers on a diversified portfolio spanning live event experiences, physical gaming locations, and digital wagering platforms. This mix is designed to capture value across the entire spectrum of horse racing and gaming entertainment.

Iconic Kentucky Derby, the longest continually-held U.S. sporting event.

The Kentucky Derby remains a cornerstone product, driving significant media and wagering revenue. The 151st Kentucky Derby in Q2 2025 set all-time records for all-sources handle for the race, the Derby Day Program, and Derby Week overall. Media performance was strong, with the 151st running achieving an average viewership of 17.7 million (up 6% versus the prior year) and a peak viewership of 21.8 million (up 8% versus the prior year). While Derby Week ticketing revenue was lower compared to the historic 150th race, growth in wagering and sponsorship revenue ensured the Churchill Downs Racetrack revenue was still up $4.9 million year-over-year in Q2 2025. Future product enhancement is planned via the Victory Run project, a $280 million-$300 million capital investment at the Racetrack, scheduled to begin construction after the 2026 Kentucky Derby and finish by the 2028 running.

Live and Historical Racing Machines (HRM) at venues like Derby City Gaming.

The Live and Historical Racing segment is a major growth driver, fueled by the deployment of HRM technology across various venues. The segment's revenue growth accelerated throughout the first three quarters of 2025: 11% in Q1 2025, 10.3% in Q2 2025, and 21% in Q3 2025. New venue openings contributed significantly; Owensboro Racing & Gaming opened in Kentucky on February 12, 2025, featuring 600 historical racing machines. In Virginia, The Rose Gaming Resort, which opened in November 2024, contributed an incremental $18.2 million in revenue in Q1 2025. Furthermore, the company opened Roseshire Gaming Parlor in Henrico County, Virginia, on September 29, 2025, with 175 historical racing machines. The company also completed the acquisition of 90% of Casino Salem in New Hampshire for $180 million in Q3 2025.

You see the segment revenue performance clearly when you look at the quarterly results:

TwinSpires online platform for horse race wagering, sports betting, and iGaming.

The Wagering Services and Solutions segment, which includes TwinSpires, shows a mix of performance across its offerings. TwinSpires Horse Racing revenue increased by $5.1 million in Q2 2025, driven by higher Derby Week wagering, but it faced higher legal costs, reducing its contribution to EBITDA in Q1 2025. The sports betting business saw a $2.2 million decline in revenue in Q1 2025 following the exit from Kentucky's sportsbook market in February 2025. The platform continues to be a source of revenue, posting $115.8 million in Q1 2025 and $127.2 million in Q3 2025.

Regional casino operations, including Terre Haute Casino Resort in Indiana.

The regional casino operations, categorized under the Gaming segment, include the Terre Haute Casino Resort, which opened in April 2024. In Q1 2025, Terre Haute alone contributed $31.6 million to the segment's total revenue of $267.2 million. The Gaming segment's total revenue was $266.3 million in Q2 2025 and $265.5 million in Q3 2025.

Exacta technology for Historical Racing Machine (HRM) operations.

Exacta Systems, acquired in August 2023 for a total consideration of $250 million in cash, provides the central determinate system technology for many of the company's HRMs. Exacta's contribution to revenue has been consistent, adding an incremental $3.1 million in Q1 2025 and $3.0 million in Q3 2025. The technology's success is tied to the expansion of HRM capacity in Virginia and New Hampshire. For example, Exacta Systems had previously installed 175 Exacta Connect terminals at The Brook in Seabrook, New Hampshire.

Key operational metrics tied to product performance include:

• The company repurchased 798,250 shares for $89.4 million in Q1 2025.
• The Board approved a quarterly dividend of $0.409 per share on January 3, 2025.
• The Board approved a $0.438 per share dividend in Q3 2025, payable on January 6, 2026.
• Net bank leverage ended Q3 2025 at 4.1x.

Churchill Downs Incorporated (CHDN) - Marketing Mix: Place

You're looking at where Churchill Downs Incorporated (CHDN) physically and digitally places its entertainment offerings, and the distribution footprint is clearly expanding beyond the grandstands of Louisville. The core distribution point remains the flagship Churchill Downs Racetrack in Louisville, Kentucky. This venue is currently undergoing what the company calls the largest expansion and renovation in its 150-year history, with capital projects targeting completion across several phases; for instance, The Skye Project's remaining areas are expected to be finished for the 154th Kentucky Derby in May 2028.

The broader physical distribution network is substantial. Churchill Downs Incorporated proudly oversees 30 industry-leading regional casinos and HRM/racing properties across 14 states. This regional gaming portfolio alone consists of 13 properties located in 11 states.

The 2025 strategy shows targeted geographic expansion. You saw the recent completion of the acquisition of a majority stake in Casino Salem in Salem, New Hampshire, which closed in the third quarter of 2025. The initial phase of Casino Salem opened on July 9, 2025, featuring approximately 100 HRMs and 13 live table games.

Domestically, new operational venues came online in 2025, specifically in the Historical Horse Racing (HRM) segment. Owensboro Racing and Gaming in Kentucky, the company's seventh premier HRM venue in the state, grand-opened on February 12, 2025. This was a $100 million development featuring 600 state-of-the-art HRMs and is estimated to generate $125 million in annual regional economic impact. Furthermore, the Virginia operations are maximizing their physical footprint; the company stated plans to reach the maximum allowed 5,000 machines across its facilities there by the end of 2025.

Here's a quick look at the scale of these physical distribution points:

Digital distribution is anchored by the TwinSpires app. While the company exited the single-game sports betting market, its horse race wagering platform remains a core distribution channel. As of early 2022, TwinSpires had grown to hold a 50% market share of online horse-race wagering. The TwinSpires division contributed to record financial results in 2024, supporting the claim of its profitability in the horse racing segment.

The digital reach extends across numerous states:

• TwinSpires is currently available in up to twenty states for horse race betting.
• The platform supports wagering on major events, including the Kentucky Derby, Preakness Stakes, and Belmont Stakes.
• New user sign-up offers in 2025 included bonuses up to $400 for new bettors using specific codes.

Finance: draft 13-week cash view by Friday.

Churchill Downs Incorporated (CHDN) - Marketing Mix: Promotion

Event-based marketing for Churchill Downs Incorporated is anchored by the cultural prestige of the Kentucky Derby, which remains North America's longest continually held major sporting event, inaugurated in 1875. The 151st running on May 3, 2025, drove significant audience engagement metrics.

The scale of the 2025 event's promotion is best illustrated by the following performance data:

Strategic partnerships are critical to amplifying the Derby's reach and enhancing on-site experiences. Churchill Downs Incorporated maintains deep ties with premium brands that align with the event's stature.

• Brown-Forman features signature activations, including the $5,000 Woodford Reserve Mint Julep experience.
• Ford Motor Company renewed its agreement as the exclusive automotive partner through 2029.
• Ford secured naming rights for the Ford First Turn Club, a premium hospitality space.
• Ford activations also include branding on the Kentucky Derby Starting Gate and entitlement of a Derby Day race sponsorship.

The digital focus is evolving, building on past success. While Derby Week 2022 generated 130 million social media impressions, the digital strategy continues to expand visibility for the flagship event.

A significant promotional shift involves broadcast rights. Churchill Downs Incorporated and NBC Sports announced that the Kentucky Oaks will air on primetime broadcast television for the first time ever in 2026. The 152nd Kentucky Oaks is scheduled for Friday, May 1, 2026, at 8 p.m. ET on NBC and Peacock. This move builds momentum into the Kentucky Derby, which is covered under a broadcast partnership extension running through 2032.

Direct investment in premium guest experiences is a core promotional tactic to drive ticketing and on-site spending by modernizing the facility. Churchill Downs Incorporated announced a multi-year capital plan targeting completion by the 154th Kentucky Derby in May 2028.

• Total planned investment across the Skye Terrace, Conservatory, and Infield General Admission Projects is between $880 million and $1 billion.
• Anticipated capital spending in 2025 for these projects is $120 to $130 million.
• The Skye Terrace Renovation and Expansion Project is budgeted between $455 to $465 million.
• The Conservatory Project is budgeted between $320 to $330 million.
• The Victory Run project, replacing 6,400 seats with premium seating for approximately 7,800 guests, is a $280-$300 million investment.
• A specific $30 million update to exclusive experiences like Millionaires Row was executed for the 2025 Derby week.

Churchill Downs Incorporated (CHDN) - Marketing Mix: Price

Price for Churchill Downs Incorporated involves a highly segmented approach, reflecting the premium nature of marquee events versus the volume-driven model of regional gaming.

For the Kentucky Derby, tiered pricing structures are evident, ranging from the most accessible entry point to exclusive hospitality.

• Infield General Admission single ticket started at $120.65 as of late April 2025.
• Infield Final Turn General Admission tickets started at a minimum of $220.60.
• Frontside Plaza Walkaround tickets started at $666 (as a two-day package).
• Starting Gate Courtyard reserved seating started at $970 per person.
• Clubhouse Box Seating started at $1,765.
• Jockey Club Suites started at $135,000.

Premium seating packages are a significant revenue component, with several reserved options priced well over the $1,000 threshold for a single day or package. For context, the average ticket price for the Kentucky Derby in 2024 was reported at $1,254.43. The pricing architecture is designed to capture maximum value from high-net-worth individuals seeking exclusive experiences, even when lower-tier ticket sales might show softness.

Wagering revenue demonstrated record performance in 2025, particularly around the flagship event. The total handle for the full Derby Day card reached $349 million, marking a 9% jump compared to the prior year's record. This momentum contributed to a $8.5 million increase in wagering revenue for the second quarter of 2025. The Live and Historical Racing segment, which includes wagering components, posted record third quarter net revenue of $305.7 million, a 21% year-over-year increase.

For regional gaming, the pricing strategy centers on high-margin Historical Racing Machines (HRMs). The expansion of these units directly correlates with revenue growth. For instance, in the third quarter of 2025, Virginia HHR venues contributed a $30.1 million revenue increase, and Kentucky HHR venues added $20.9 million. The focus on these high-margin assets is clear, as same-store Virginia HRM properties generated a combined 51% margin during the third quarter of 2025.

Shareholder return commitments reflect confidence in this pricing and operational strategy. The Board of Directors approved a third quarter 2025 dividend of $0.438 per share. This represented a seven percent increase over the prior year and marked the fifteenth consecutive year Churchill Downs Incorporated has increased its dividend per share. The prior annual dividend per share as of January 3, 2025, was $0.41.