Title

Presentation

Operator: Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated First Quarter 2026 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mr. Sam Ullrich, Vice President, Investor Relations.

Sam Ullrich: Thank you, Andrew. Good morning, and welcome to our first quarter 2026 earnings conference call. After the company’s prepared remarks, we will open the call for your questions. The company’s 2026 first quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G, is available at the section of the company’s website titled News, located at churchilldownsincorporated.com as well as in the website’s Investors section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements.

These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC, specifically the most recent reports on Form 10-Q and Form 10-K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday’s earnings press release. The press release and Form 10-Q are available on our website at churchilldownsincorporated.com.

And now I’ll turn the call over to our Chief Executive Officer, Mr. Bill Carstanjen.

William C. Carstanjen: Thanks, Sam. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer; Marcia Dall, our Chief Financial Officer; and Brad Blackwell, our General Counsel. I will begin with a high-level overview of our first quarter performance and key strategic developments. Marcia will then walk through our financial results and capital management strategy in more detail, and then we will open up the call for your questions. Let me start with a few key highlights from the quarter. First, we delivered a strong start to the year with record first quarter net revenues of $663 million and record adjusted EBITDA of $257 million. These results reflect strong execution across our portfolio and continued momentum with our growth strategy.

Second, we successfully opened our Marshall Yards historical racing machine venue in Calvert City, Kentucky, on time and on budget. This marks our eighth HRM facility in the Commonwealth. Early performance has been encouraging, and the property is already contributing to job creation, increased purse funding for Kentucky’s horse racing industry and long-term shareholder value. Third, we continue to see strong progress in Virginia, where we remain committed to supporting the renaissance of Thoroughbred racing. We will host 48 race dates in 2026 and expect to generate significant purse funding from our HRM operations across the state that will be distributed during our race meet at Colonial Downs. We also ran a successful Virginia Derby in March, and we are excited that the winner, Incredibolt, will have the opportunity to compete in this year’s Kentucky Derby.

We were very pleased with several positive developments in Virginia during the closing stages of the 2026 legislative session. The Governor vetoed legislation related to skill games and a proposed new casino in Fairfax County. iGaming also did not receive approval. These outcomes support a more attractive operating environment, and we remain committed to continued investment in job creation in Virginia. Another example of our strategy around smart transformative investments in the Thoroughbred industry is reflected in our announcement earlier this week. We signed a definitive agreement to acquire the intellectual property rights to the Preakness Stakes and the Black-Eyed Susan Stakes from a subsidiary of The Stronach Group. This includes all trademarks and associated rights with respect to the Preakness stakes, which is the second leg of the Triple Crown stakes, which is the second leg of the 3 related races for the Phillies.

We expect — second most wagered on race in the country. The Kentucky Derby is, of course, first by a very wide margin, followed by the 2 other Triple Crown races, the Preakness and the Belmont Stakes and then our own Kentucky Oaks race. Let me now turn to the Kentucky Derby and our vision for long-term growth. We continue to invest in enhancing the Derby experience. And for this year’s event, we are unveiling several exciting upgrades. We have completed renovations of The Mansion, one of the most exclusive hospitality areas, offering exceptional views of the track and finish line. Our Finish Line Suites have also been significantly upgraded, creating a more integrated high-energy hospitality experience with improved flow and premium amenities.

These are our most exclusive suites, and we are very excited to show our customers a reimagined and unique setting. Following this year’s Derby Week, we will accelerate the work on the Victory Run project. As I discussed on our call in February, we will finish this project in time for the 2028 Kentucky Derby. This new structure will offer spectacular premium suites on the first level. The guests in these suites will be able to walk to the rail to watch the races. Victory Run will also incorporate covered box seating and multiple high-end dining experiences on the second through fourth levels of the building. These projects are designed to deliver strong long-term returns while offering exceptional guest experiences. Looking ahead, we remain focused on expanding Derby Week into an even broader week-long national and international event.

Last year, we welcomed more than 370,000 guests across Derby Week, roughly the equivalent of 5 Super Bowls in 1 week. We see significant opportunities to continue growing the entire week with respect to attendance, wagering, viewership, sponsorship and EBITDA. As part of that strategy, we are expanding Derby Week with the addition of racing on Sunday, April 26. And for the first time, the Kentucky Oaks will be broadcast in prime time on NBC and Peacock, giving us a powerful platform to expand the reach of this prestigious race and the broader Derby experience. At the same time, the continued growth of Derby Week is attracting innovative global partnerships. These partners are increasingly focused on premium experience-driven engagement and the Derby Week offers a unique platform to deliver that at scale.

Our partners recognize that activations at live sporting events have become more coveted given the significant growth in the experience economy. When coupled with premium hospitality offerings during Derby Week, our partners can provide once-in-a-lifetime experiences for their customers during one of the most marquee live sporting and entertainment weeks in the world. Over 152 years, the Kentucky Derby has become an iconic event in sports and entertainment. We are going to build on that legacy by continuing to expand its reach and relevance for future generations. Turning to our HRM portfolio. Our venues in Kentucky and Virginia are performing well and play an important role in supporting the horse racing industry in their respective states.

They generate first funding, support the local agricultural industries, create jobs and drive meaningful economic impact in the communities where we operate. We will continue to invest in HRM venues and product offerings. We introduced roulette electronic table games or ETGs based on historical horse races at 6 of our Kentucky HRM properties during the first quarter. Early indications are very encouraging, and the new ETGs are certainly accretive to our GGR in Kentucky. We will be rolling out additional machines throughout 2026 and beyond. We are increasing our marketing of this new offering and awareness is building at each of our properties. We are also working on developing additional HRM-based ETGs, including Craps and then Blackjack to attract an even broader customer base.

Looking ahead, our Rockingham Grand Casino project in Salem, New Hampshire remains on track for a mid-2027 opening. This development represents another compelling opportunity to expand into an attractive market with a high-quality entertainment offering. In summary, this was a strong start to 2026. We delivered record results, executed on key strategic initiatives and continue to invest in high-return growth opportunities across our portfolio. Churchill Downs remains exceptionally well positioned with a strong core portfolio of businesses and a clear path for long-term growth. We are confident in our ability to deliver consistent and meaningful value for our shareholders. And before I turn it over to Marcia, a quick reminder. Derby Week begins this Saturday, April 25 with opening day and culminates on Saturday, May 2, with the 152nd running of the Kentucky Derby.

We have an exciting week of racing and events planned, and we look forward to hosting many of you in person. We are anticipating an exceptional Derby and Derby Week, significantly outpacing not only last year, but also Derby 150 in 2024. If you have not secured your tickets yet, we encourage you to do so, we expect to be fully sold out. With that, I’ll turn this over to Marcia. Marcia?

Marcia Dall: Thanks, Bill, and good morning, everyone. I’ll begin with highlights into our financial results and then provide an update on capital management. First, regarding our financial results. As Bill noted, we delivered record first quarter revenue and adjusted EBITDA with both our Live and Historical Racing segment and our Wagering Services and Solutions segments achieving record performance for the quarter. We are pleased with the continued momentum in our Live and Historical Racing segment. Adjusted EBITDA increased by more than $11 million or 11% compared to the prior year quarter. Our Kentucky HRMs delivered outstanding results with adjusted EBITDA increasing more than $9 million or 17% compared to the prior year quarter, driven by strong growth across both Western and Northern Kentucky.

Our Kentucky growth also reflects the opening of Marshall Yards in February. In Virginia, adjusted EBITDA increased by $3 million or 6% compared to the prior year quarter. This growth was supported by continued momentum at The Rose, which delivered sequential increases in the GGR per machine per day for each month of the first quarter. Our team is making great progress in marketing the property to attract new guests and increase spend per visit. We’re encouraged by the continued top line growth and increase in the margins at The Rose and believe the property remains in the early stages with a long runway for growth. At Colonial Downs Racetrack, we successfully held the Virginia Derby in March with sold out attendance and a 19% increase in handle over last year, making it the third highest wagering day in Colonial Downs history.

Performance at our other Virginia properties was impacted by weather and increased competition. We are actively optimizing our marketing and operating strategies and remain confident in the long-term performance of these properties. Turning to our Wagering Services and Solutions segment. Adjusted EBITDA increased 8%, driven by retail sports betting, contributions from our online sports betting market access agreements and continued expansion of our Exacta platform. TwinSpires also delivered modest growth in adjusted EBITDA, primarily due to lower legal expenses. And last, regarding our Gaming segment, our wholly owned regional gaming properties performed in line with our expectations, given the cessation of HRM operations in Louisiana in May of last year and $2 million of weather-related disruption in January.

Overall, first quarter same-store margins at our wholly owned casinos were relatively consistent with the first quarter of last year. Customer trends have improved versus the prior year and remain consistent with the prior quarter. We see continued strength among higher value rated players and some softness outside of Kentucky and lower-value unrated segments. We are actively refining our marketing strategies to capture opportunities across both segments. Turning to capital management. We generated $276 million or $3.94 per share of free cash flow in the first quarter, reflecting the strength and consistency of our operating model. Our strong free cash flow generation continues to support both reinvestment in high-return growth projects and meaningful capital returns to shareholders.

Project capital expenditures were $40 million in the quarter, and we continue to expect full year 2026 project capital spend of $180 million to $220 million. Maintenance capital expenditures were $19 million in the quarter, and we continue to expect full year 2026 maintenance capital spend of $90 million to $110 million. We ended the quarter with bank covenant net leverage of 3.9x, reflecting continued strong operating cash flow generation from our recent investments. With that, I’ll turn the call back over to Bill so that we can open the line for questions.

William C. Carstanjen: Thank you, Marcia. Okay, everyone, I think we’re ready to take your questions now.

Receive real-time insider trading and news alerts

Operator: [Operator Instructions] Our first question comes from the line of Barry Jonas with Truist.

Barry Jonas: I may have missed this as the audio was a little off before. But can you maybe detail a little more about the fee structure for the Preakness IP? And also if you have any wider thoughts on the longer-term strategy there?

William C. Carstanjen: Barry, thanks for the question. Sorry if there were any difficulties with the audio. Certainly happy to cover anything that slipped through the cracks. So the fee structure in Maryland is a 2-part structure. First, a base fee of $3 million that grows at 2.5% every year starting in 2028. It does not apply for the 2027 Derby, and we haven’t closed — Preakness, I should say, we haven’t closed on the purchase of the intellectual property yet at this point either. But starting next year, it’s a $3 million base fee. From that point on, it grows at 2.5%. And then the second portion of the fee is 2% of handle for the Black-Eyed Susan day plus the Preakness day. So you add those 2 amounts together and you get the total.

Last year, the Preakness and Black-Eyed Susan day in combination did about $140 million of handle to give a rough perspective on where it is at this point. So for us, it’s a thrill to be a part of that. That’s, in our view, an iconic asset. And having been in the game for a long time, I’m familiar with the history of the Preakness, and I know what it’s been in the past and what it can be in the future. So we’re happy to participate and work with the state as they see fit to help build them back to their former glory.

Operator: And our next question comes from the line of Dan Politzer with JPMorgan.

Daniel Politzer: Bill, just another one on Preakness. As we think about your capital allocation parameters and in the past, you’ve talked about investing in the ecosystem, looking for things with local monopolies, ability to improve operations of an asset over time. How does this investment in Preakness fit into that? And how do you think about this maybe potentially evolving over kind of the medium to long term?

William C. Carstanjen: Thanks for the question, Dan. So first, some of those attributes come in connection with iconic assets, unique assets, special assets that can have different attributes than everything else over time. And we think the Preakness is one of those assets. We think it has tremendous potential, tremendous history. And as it unfolds, we certainly are available to the state and happy to work with the state to help them figure out how best to transition that property into something great like it’s been in the past. So for us, it’s entirely consistent with how we look at things like the Derby. In my opinion, the Derby is always what’s most special and what’s most unique about our company, and it’s an asset that can’t be duplicated. It’s just a very special, unique piece of Americana. And we think Pimlico and the Preakness has elements to that itself, and it’s about developing those and encouraging those things to happen over time.

Operator: And our next question comes from the line of Daniel Gugliomo with Capital One Securities.

Daniel Guglielmo: In the past, you all have talked about growing the international customer base for the Kentucky Derby and U.S. horse racing in general. Outside of the dollars generated, how do you all measure success there? And what are your goals over the medium term, so the next 5 or so years?

William C. Carstanjen: Well, Dan, thanks for that question. That touches on a theme that’s personally really important and significant to me. I think we have this unique American event, and there’s an irony to that because over the long 152-year history of the Derby, that hasn’t necessarily been the focus — the international piece hasn’t necessarily been the focus of our efforts. But despite that, we still have this global brand. So focusing on building that is critical going forward. It starts with attendance. It starts with encouraging more folks in the overseas markets, starting with those that have an attachment or an interest in horse racing to come experience this event. And from that, it builds into sponsors and partnerships.

And those are the more important elements. Certainly, in some countries, wagering can be possible. Japan is an example of that. But first and foremost, it’s about driving high-end customer participation and encouraging sponsorships. And certainly, attendance and viewership can be a part of it. I don’t have at my fingerprints the information this year for all the markets that the Derby will be telecast, but it’s a very impressive picture and it’s a growing picture. So everything we see internationally from an international perspective is positive and growing and encouraging. And you’ll see us focus more on that over the coming years because there’s a big population out there in the rest of the world that’s in particular, interested in Thoroughbred racing as well as the United States.

And our job is to attract those people and bring them here in the higher echelons of our ticket offering.

Operator: And our next question comes from the line of Chad Beynon with Macquarie.

Chad Beynon: Bill, one for you, I guess, related to government affairs or the legislative win in Virginia. Obviously, you can’t predict future legislation, but anything you can kind of highlight in terms of why this was vetoed, if the governor or other constituents are just realizing the impact onto the state. We’re just getting a lot of questions if this will become a recurring thing, but anything else you can help on there would be helpful.

William C. Carstanjen: Sure, Chad. Thanks for the question. So generally, state legislative processes are busy, messy processes. There’s lots of activity. There’s lots of divergence of views. It’s part of democracy. It’s how democracy works. So the fact that legislation is introduced, the fact that legislation is discussed doesn’t mean there’s consensus in the state on what’s going to happen that year or in the future. It’s just part of the legislative process. So I think every year is different in every legislature. And I think every year, they learn from the past experiences and that factors into what they want to do as a state going forward. So I think what happened in Virginia to turn it to Virginia and less from a general comment, what happened in Virginia is part of a healthy democratic process.

There was lots of discussions. There were lots of divergence of views and the state came to a conclusion on how they wanted to manage and think about gaming for the time being. I’m encouraged by some of the dialogue and some of the discussion there that their progression on gaming issues is a positive one from our perspective, and I’m encouraged going forward that there’s a forum for discussion, that there’s a forum for convergence of views and that our views are respected and heard and part of that process will be reflected in whatever outcomes in the future we might see. But generally, Virginia shows a lot of elements of a very stable environment for us. We believe in that jurisdiction. We believe in the possibility and the potential of that jurisdiction, and we’re really glad to be a part of that dynamic in that environment.

Operator: And our next question comes from the line of David Katz with Jefferies.

David Katz: I wanted to just spend a second on Virginia, if I may. Way back when we sort of made this acquisition, there was clearly a lot of opportunity and what’s evolved since then is just more competing licenses and some traditional licenses and forgetting about any discussion about iGaming and will it or won’t it one day. Bill, I remember you telling me over lunch a while back that every strategy should evolve as you go to be a good one. Has this turned out competitively the way you expected? And have you evolved your Virginia strategy for that, what appears to be increasing competition in that particular market?

William C. Carstanjen: Great question, David. So already, you can see Virginia has been a really strong investment for us. It’s been a really encouraging investment. In terms of new competition, you face that discussion in all jurisdictions as a part of the gaming dynamic that you have in the country. And we’ve progressed through that pretty well. And for us, there will be opportunities, too, as discussions around Virginia evolve over time. So always be flexible. I agree with what you said, always evolve your strategy, always be flexible. We’ve done that in Virginia. What we don’t control is the noise and the discussion that happened during any legislative session. But we participate vigorously in those discussions, and we always constantly evaluate what’s best for our company, where to focus, where to pivot, where to change.

But Virginia so far for us through all this noise has been a really, really strong investment. And as we look forward, we see that continuing, and we’ll evolve that strategy and roll with the times as we see real pivots that need to be made. So far, so good. It’s been a positive experience for us. And for us, it’s now focusing on next year and focusing on how we want to evolve our business in that state.

Operator: And our next question comes from the line of Jordan Bender with Citizens.

Jordan Bender: Kentucky continues to show some pretty nice growth. Bill, broadly, how do you think about the incremental 4,000 machines you can put in the state? And maybe more specifically, do you see any properties that are ripe for expansion?

William C. Carstanjen: Thanks, Jordan. Yes, Kentucky has been a very positive experience for us. It’s been a very short-term and long-term great investment for us. So all these properties are still showing real signs of growing into their own skin. They’re still — they haven’t reached maturity. They’re still growing. HRMs as a product continue to get better. We continue to have more options and more variety of product. And certainly, ETGs are something we feel positively about, and we look forward to expanding our offering both of Roulette and of other products on our floors. Marshall Yards, we just opened in February. That’s gotten off to a really encouraging start. So without exception in the state of Kentucky, we don’t view any of these products as being at maturity yet. And I think we’ll keep innovating the product, the HRM product and growing into our marketplace in each of these jurisdictions. So more to come there.

Operator: And our next question comes from the line of Brandt Montour with Barclays.

Brandt Montour: I wanted to ask about the Derby, Bill, you sounded pretty upbeat about momentum there. But just maybe to put a finer point on it, would you — how would you compare the impact of geopolitical events to this spring’s ticket selling season to last spring’s geopolitical events? And Marcia, is there any sort of update to the $15 million to $20 million incremental EBITDA year-over-year that you called out last quarter?

William C. Carstanjen: I’ll start first. And Marcia, if you want to comment on the last part of the question, please feel free to jump in. So last year, the geopolitical events, which was really the introduction of tariffs for the first time impacted us. It impacted the sales process when it started. I’m pleased to say that this year, we haven’t seen that. We are not experiencing geopolitical corrections to our sales process. So all good there, and it’s been a smooth and predictable sales cycle for us and a really encouraging sales cycle for us.

Marcia Dall: And Brandt, from a growth perspective, we are very confident in our $15 million to $20 million of Derby growth over last year’s number. And as Bill said earlier on the call, that will be a very significant increase even over Derby 150.

Operator: Our next question comes from the line of Jeffrey Stantial with Stifel.

Jeffrey Stantial: Just one from us on the HRM business. Bill, I appreciate some of the commentary earlier on the rollout of electronic table games in Kentucky. I was hoping you might just add a little bit more color here in terms of sort of what do you — keeping in mind, it’s still a small number of units, but what do initial yields look like for these machines? How is this flowing in, in terms of database growth, ability to compete across the border with Class III casinos? Are you seeing some play shift over from slots to these tables? Just any sort of thoughts on initial trends, keeping in mind it’s still early would be great.

William C. Carstanjen: Sure, Jeff. Thanks. Yes, happy to do that. So even introducing just one single ETG product, which is Roulette, even just having a single product, so with lots of runway to go to add other products, we’ve seen the addition of new customers. There have been changes to our database and a nice pickup in new customers. So these are definitely accretive to the GGR on each of our floors. And we’ve really just started marketing with respect to this new product in April. We wanted time to make sure we worked out the kinks and understood how the products worked on our floor. So we’re really just in the first month of marketing it. So I have only good news to report on what we’re seeing. I wish we could push a fast forward button and have more product, both in terms of the number of machines we have on the floor, but also in terms of the variety.

So every metric we look at in terms of evaluating floor performance is a positive one with respect to introducing this product.

Operator: Our next question comes from the line of Trey Bowers with Wells Fargo.

Raymond Bowers: Just getting back to some of the kind of more political questions we had earlier. As you said, this whole process can be messy and somewhat unpredictable. So I was curious, is there a scenario by which if you see digital expansion in states in which you operate that was not expected or you didn’t want? Is there a scenario which you kind of reverse course and lean into that? I’d expect there will be more of this going forward. And I think everybody would love to hear if, hey, if ultimately iGaming does happen in Virginia, here’s how maybe we could benefit.

William C. Carstanjen: I think part of participating in legislative process is always thinking through your fallback positions with respect to things that will help your business. Sometimes that can be going into different businesses. Sometimes that can be more product or other benefits to the business you have in the state. Part of managing through a legislative process is understanding your list of priorities and your series of fallback positions and your willingness and flexibility to pursue new options based on what those options are. So I don’t want to comment on any particular line of business other than to say iGaming is a terrible public policy choice for states. It is not one that any state has figured out reliably to protect the consumers in that state.

So with that general caveat that that’s a terrible public policy that isn’t being handled or rolled out well in the places where you’ve seen it. With that caveat, yes, we approach every state with a series of strategies based on what we see happening in that state. And I think our track record reflects that we handle all kinds of issues fairly well, and we achieve positive improvements for our business environment in addition to battling things that can be threats to it. So we make the best out of the circumstances we are faced with, and that’s part of the skill set you need when you’re in the businesses that we’re in.

Operator: Our next question comes from the line of Joe Stauff with Susquehanna.

Joseph Stauff: On ETGs, I know sort of the rollout of that is an iterative process, and you’ve answered this a couple of times before, I could appreciate it. But if we kind of zoom out and we think about maybe the typical, say, 80-20 gaming positions, table versus slots, is that fair to assume that you’ll likely get there at some point? And is that maybe a goal within 18 months? Or does it take longer? Just wondering if you can give us more broader parameters, say, on the rollout versus, say, in the near term?

William C. Carstanjen: Thanks for the question, Joe. We’re going to take it one step at a time. We’re going to evaluate every change we make to our floor, whether it’s adding more of a particular type of ETG like roulette or introducing new and different categories of ETGs. We’re going to take what we see. We’re going to respond to the data and to the information that is generated by our experiments with introducing new products, and we’re going to react to that. So we don’t set a target 80-20 or anything like that. We make smart decisions based on what the data tells us and what our customers tell us on the floor. So we try as a management team to be a data-driven organization. We don’t want to make up assumptions. We don’t want to stick to assumptions that don’t turn out to be entirely reflected in reality.

We want to respond to what we see on the ground. And that’s true based on the experience of what we see on our floors. That’s true based on what we see with political environments. That’s true for everything we do in the company. We will respond and plan around what the facts are.

Operator: And our next question comes from the line of Shaun Kelley with Bank of America.

Shaun Kelley: Bill or Marcia, wondering if you could comment a little bit on — I think there’s a proposal out there for Maryland historical horse racing machines. I think this may have existed in past iterations as well, but sort of what’s your broader take or support? Do you think there’s any momentum behind it? And what might the process look like?

William C. Carstanjen: Yes. Shaun, thanks for the question. I think you’re referring to a bill that came through the legislative process last year. It wasn’t passed. It’s not law, but there has been a movement, particularly among the off-track betting parlors or OTBs in Maryland to get HRMs. I don’t want to comment on that right now. We’re getting our sea legs in the state. We’re talking to the government. We’re talking to the executive branch. We are evaluating how we can be supportive and helpful to the state in achieving their goals of creating a world-class, best-in-class event that drives tourism and investment to the state in the province. So we’re focused on that right now and becoming a more integrated part of that state-driven team. And HRM is a component of the discussion in the state. But I won’t comment on it for now as I said, we get our sea legs and become participants in all things racing in the state of Maryland.

Operator: Our next question comes from the line of Ben Chaiken with Mizuho.

Benjamin Chaiken: Just one on Preakness. At risk of being repetitive, I think historically, the property has had its own unique culture and following, which you referred to, Bill. Maybe talk about your ambitions here, both qualitatively and quantitatively, if you can. I guess maybe are you there to assist Maryland if they ask you to? Or is this something that you can start to transform and redevelop near term? I guess I’m just trying to get a better sense of the explicit goal for this property.

William C. Carstanjen: Thanks, Ben. Yes, Maryland is in control of the destiny of the Preakness. They have the land. They’ve authorized legislatively $400 million of bond proceeds to invest in the property. There is another $125 million of other government funds that are available to invest in Pimlico and Laurel Park, which is the training center that they just approved buying earlier this week. So they have a war chest of about $525 million or so of funds that have been allocated to invest in racing, and they’re in control of that investment. We certainly, upon closure, will be the owners of the intellectual property and have started already a very strong dialogue with the state on how we may be able to help them achieve those goals.

We have 300 people that work here in Louisville at the track or in our corporate offices supporting our racetrack, doing construction and design, ticketing, sponsorships, wagering. We have a real team of experts here that do this on an absolute world-class level. And certainly, those resources and efforts are available to the state if they seek our help and would like our help in any way. But those discussions are just beginning, and it’s important to let those discussions play out at the state’s timing and direction. I would say that we really love the market when we compare it to, say, our own market here in Louisville and in the Midwest. We love that corridor that D.C., Baltimore up through Philadelphia corridor. There are lots of great customers there.

There are lots of great potential sponsors and business partners there. So we love that market. We think it’s one with a lot of opportunity, and we have a lot of ideas. But this is something that the state will have to ask for our help for — ask us to help on. And we’ve begun that dialogue, and we’re excited for that to develop.

Operator: Thank you. I will now turn the call back over to CEO, Bill Carstanjen, for any closing remarks.

William C. Carstanjen: Thank you, everybody, really great series of questions today. It was really — it was fun to hear your questions and how you’re thinking about our company, and we did our best to answer those. So thank you for your support. This is an exciting time for us. We’re now going to go focus on getting this thing called the Kentucky Derby underway. And we hope to see many of you there, and we’re going to go work our rear ends off to deliver a great Kentucky Derby. So thanks very much, and we’ll see you next time.

Operator: Ladies and gentlemen, thank you for participating. This does conclude today’s program, and you may now disconnect.

Receive real-time insider trading and news alerts