Due to a reduced number of entries and a decline in purse money earned
from all wagering sources during its ongoing 2009 Spring Meet, Churchill
Downs Racetrack ("Churchill”) will request permission from the Kentucky
Horse Racing Commission ("KHRC”) to eliminate seven race days from its
2009 Spring Meet, which had been scheduled for 52 racing days between
Saturday, April 25, and Sunday, July 5. The request, which will be made
at the KHRC’s regularly scheduled meeting on Tuesday, May 12, comes on
the heels of four consecutive race days in which at least one race was
canceled due to small field sizes.
"With this announcement, we are now clearly seeing the impact of
competing with Thoroughbred racetracks that supplement their purses with
revenue from additional gaming options, such as slots and video lottery
terminals,” said Bill Carstanjen, chief operating officer of Churchill
Downs Incorporated. "Our analysis shows that tracks with these enhanced
purses are attracting more horses to their races. Meanwhile, Kentucky,
the cradle of our industry, is seeing a decline in field size. Until we
address this inequity, Kentucky’s horse industry will continue to
suffer.”
Churchill will request that six Wednesdays (May 20; June 3, 10, 17 and
24; and July 1) and one Thursday (May 28) be eliminated from its 2009
Spring Meet schedule.
"We are disappointed that we have to make this request after a
successful Kentucky Derby week,” said Carstanjen. "The crowds we enjoyed
for the Kentucky Derby and Kentucky Oaks, as well as Mother’s Day,
illustrate clearly the passion and appreciation that Louisville has for
us, and leave no doubt that Louisville is a major-league city that
supports this track. Unfortunately, we have not been able to draw enough
horses to fill our race cards and remain competitive in the national
wagering market, which accounts for almost 90 percent of our handle. As
a result, our wagering handle, which funds purses, has been down 20
percent outside of Oaks and Derby Days.”
Churchill will also reduce purses by $425,000 on six stakes races to
help offset the lower than expected wagering levels. Those races,
including their original and revised purses, are the June 6 Early Times
Mint Julep Handicap (Grade III), from $150,000 to $100,000; the June 13
Jefferson Cup (GII), from $200,000 to $150,000; the June 13 Northern
Dancer (GIII), from $150,000 to $100,000; the June 13 Fleur de Lis
Handicap (GII), from $300,000 to $200,000; the June 13 Stephen Foster
Handicap (GI), from $750,000 to $600,000; and the July 4 Firecracker
Handicap (GII), from $175,000 to $150,000. The reductions in purses will
not affect the grade of any of the races listed.
"Although we regret that current business conditions have forced the
reduction of purses for six of our most popular and historic stakes
events, we took care to avoid cutting overnight purses in an effort to
soften the impact upon our Kentucky horsemen,” Carstanjen added. "We
have worked with Kentucky’s horsemen and they understand the need for
these unfortunate changes. We hope that this will assist their stables
and we appreciate their continued support of Churchill Downs and
Kentucky racing.”
Churchill Downs, the world’s most legendary racetrack, has conducted
Thoroughbred racing and presented America’s greatest race, the Kentucky
Derby, continuously since 1875. Located in Louisville, the flagship
racetrack of Churchill Downs Incorporated (NASDAQ Global Select Market:
CHDN) also operates Trackside at Churchill Downs, which offers
year-round simulcast wagering at the historic track. Churchill Downs
will conduct the 136th running of the Kentucky Derby on May 1, 2010. The
track’s 2009 Spring Meet is underway and continues through July 5.
Churchill Downs is scheduled to host the Breeders’ Cup World
Championships for a record seventh time on November 5 and 6, 2010.
Information about Churchill Downs can be found on the Internet at www.churchilldowns.com.
Information set forth in this news release contains various
"forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. The Private Securities Litigation Reform Act of 1995 (the "Act”)
provides certain "safe harbor” provisions for forward-looking
statements. All forward-looking statements made in this Quarterly Report
on Form 10-Q are made pursuant to the Act. The reader is cautioned that
such forward-looking statements are based on information available at
the time and/or management’s good faith belief with respect to future
events, and are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed
in the statements. Forward-looking statements speak only as of the date
the statement was made. We assume no obligation to update
forward-looking information to reflect actual results, changes in
assumptions or changes in other factors affecting forward-looking
information. Forward-looking statements are typically identified by the
use of terms such as "anticipate,” "believe,” "could,” "estimate,”
"expect,” "intend,” "may,” "might,” "plan,” "predict,” "project,”
"should,” "will,” and similar words, although some forward-looking
statements are expressed differently. Although we believe that the
expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove
to be correct. Important factors that could cause actual results to
differ materially from expectations include: the effect of global
economic conditions, including any disruptions in the credit markets;
the effect (including possible increases in the cost of doing business)
resulting from future war and terrorist activities or political
uncertainties; the overall economic environment; the impact of
increasing insurance costs; the impact of interest rate fluctuations;
the effect of any change in our accounting policies or practices; the
financial performance of our racing operations; the impact of gaming
competition (including lotteries and riverboat, cruise ship and
land-based casinos) and other sports and entertainment options in those
markets in which we operate; the impact of live racing day competition
with other Florida and Louisiana racetracks within those respective
markets; costs associated with our efforts in support of alternative
gaming initiatives; costs associated with customer relationship
management initiatives; a substantial change in law or regulations
affecting pari-mutuel and gaming activities; a substantial change in
allocation of live racing days; changes in Illinois law that impact
revenues of racing operations in Illinois; the presence of wagering
facilities of Indiana racetracks near our operations; our continued
ability to effectively compete for the country’s top horses and trainers
necessary to field high-quality horse racing; our continued ability to
grow our share of the interstate simulcast market and obtain the
consents of horsemens’ groups to interstate simulcasting; our ability to
execute our acquisition strategy and to complete or successfully operate
planned expansion projects; our ability to successfully complete any
divestiture transaction; our ability to execute on our permanent slot
facility in Florida; market reaction to our expansion projects; the loss
of our totalisator companies or their inability to provide us assurance
of the reliability of their internal control processes through Statement
on Auditing Standards No. 70 audits or to keep their technology current;
the need for various alternative gaming approvals in Louisiana; our
accountability for environmental contamination; the loss of key
personnel; the impact of natural disasters on our operations and our
ability to adjust the casualty losses through our property and business
interruption insurance coverage; any business disruption associated with
a natural disaster and/or its aftermath; our ability to integrate
businesses we acquire, including our ability to maintain revenues at
historic levels and achieve anticipated cost savings; the impact of
wagering laws, including changes in laws or enforcement of those laws by
regulatory agencies; the outcome of pending or threatened litigation,
including the outcome of any counter-suits or claims arising in
connection with a pending lawsuit in federal court in the Western
District of Kentucky styled Churchill Downs Incorporated, et al v.
Thoroughbred Horsemen’s Group, LLC, Case #08-CV-225-S; changes in
our relationships with horsemen’s groups and their memberships; our
ability to reach agreement with horsemen’s groups on future purse and
other agreements (including, without limiting, agreements on sharing of
revenues from gaming and advance deposit wagering); the effect of claims
of third parties to intellectual property rights; and the volatility of
our stock price.
