Churchill Downs Business Model Canvas

Churchill Downs leverages its flagship event, the Kentucky Derby, to forge crucial partnerships with leading brands like Woodford Reserve, Longines, Ford, and SAP. These sponsorships are vital for funding and executing elaborate on-site brand activations.

These brand collaborations significantly enrich the attendee experience, offering exclusive access to premium hospitality areas, showcasing new vehicle models, and providing luxury shopping opportunities. These activations are designed to create memorable moments for guests.

The financial impact of these partnerships is substantial, generating considerable licensing and sponsorship revenue for Churchill Downs. For instance, in 2023, sponsorship and advertising revenue for Churchill Downs' racing segment, which includes the Derby, saw robust growth, underscoring the commercial value of these key relationships.

Churchill Downs' strategic alliances with media giants like NBC Sports are paramount, ensuring broad national visibility for flagship events such as the Kentucky Derby. This relationship, extended through 2032, is a cornerstone for audience engagement and brand promotion. The 2024 Kentucky Derby broadcast alone captured an average of 16.7 million viewers, underscoring the immense reach and value derived from such media partnerships.

Crucial technology partnerships, particularly with providers powering TwinSpires, are vital for delivering secure and innovative online wagering experiences. TwinSpires' net revenue of $497.5 million in 2023 highlights the critical role of these underlying technology relationships in maintaining performance and driving future growth in the digital betting landscape.

Collaborations with leading brands, including Woodford Reserve and Ford, serve as significant revenue generators through sponsorships and licensing fees. These partnerships also enhance the customer experience by funding elaborate on-site activations, contributing to robust growth in the racing segment's sponsorship and advertising revenue in 2023.

Churchill Downs' key activity of providing online wagering services through TwinSpires is central to its digital strategy. This involves not only pari-mutuel betting on horse racing but also expanding into online sports betting and casino gaming.

The company actively engages in platform development, ensuring a robust and intuitive user experience. Customer acquisition efforts are crucial to growing this segment, alongside the meticulous management of wagering pools to maintain integrity and efficiency.

In 2023, Churchill Downs reported that its online segment, which includes TwinSpires, generated $535.2 million in revenue. This highlights the significant role of digital wagering in reaching a wider, tech-savvy audience and contributing to the company's overall financial performance.

Churchill Downs' key activities encompass the operation of its iconic horse racing tracks, notably the Churchill Downs Racetrack, which hosted the Kentucky Derby. This includes managing race meets and pari-mutuel betting, contributing to its substantial revenue streams.

The company also actively develops and manages its portfolio of casinos and historical racing machine (HRM) facilities, expanding its presence through new ventures like the Terre Haute Casino Resort. Furthermore, Churchill Downs drives its digital strategy through online wagering via TwinSpires, offering horse racing, sports betting, and casino games, which generated $535.2 million in revenue in 2023.

Strategic acquisitions and capital investments are also core activities. The company acquired a majority stake in Casino Salem and invested in new HRM venues, alongside significant capital expenditures of approximately $300 million in 2023 for property upgrades and new developments, all aimed at enhancing customer experience and driving revenue growth.

Churchill Downs' TwinSpires platform is a cornerstone of its digital strategy, supported by a robust technology and data infrastructure. This includes sophisticated IT systems designed to manage online wagering, sports betting, and casino gaming operations efficiently.

Advanced technology is critical for delivering a seamless customer experience, ensuring secure transactions, and enabling data-driven decision-making across all digital offerings. For instance, in 2023, Churchill Downs reported significant growth in its online and mobile segments, underscoring the importance of these technological assets.

Churchill Downs' key resources are its strong brand, particularly its association with the Kentucky Derby, its physical assets like racetracks and casinos, its digital platform TwinSpires, its crucial gaming licenses, and its skilled workforce. These elements collectively form the foundation of its business operations and revenue generation.

The brand's prestige drives customer engagement and partnership opportunities. Physical locations are essential for live events and gaming, while digital infrastructure supports online wagering. Licenses enable legal operations, and human capital ensures efficient execution across all segments.

In 2023, Churchill Downs reported significant revenue from its Gaming segment, directly reflecting the value of its licenses and physical assets. The company's ongoing investments in its workforce, including training programs in 2024, highlight the importance of human capital for maintaining a competitive edge.

Churchill Downs offers a compelling regional gaming experience through its network of casinos and historical racing machine (HRM) facilities. These venues provide a diverse array of gaming choices, coupled with quality dining and entertainment, establishing them as convenient, high-caliber local destinations for patrons.

For the fiscal year 2024, Churchill Downs reported significant revenue from its Gaming segment. For instance, in the first quarter of 2024, adjusted EBITDA for the segment reached $136.8 million, demonstrating the strong performance and appeal of these regional entertainment hubs.

Churchill Downs provides a gateway to the pinnacle of thoroughbred racing, most notably the Kentucky Derby, offering unparalleled access to elite competition and a vibrant atmosphere. This includes premium hospitality options and a chance to be part of a storied tradition. The 2024 Kentucky Derby continued this legacy, drawing significant crowds and record wagering, proving the enduring appeal of this premier event.

The company’s TwinSpires platform extends beyond horse racing, offering a comprehensive suite of wagering options including online sports betting and casino games. This broadens appeal and caters to diverse customer preferences, allowing engagement from anywhere. In 2024, Churchill Downs actively expanded these digital offerings to capitalize on the rapidly growing online gaming market.

Churchill Downs enhances its value proposition through its regional gaming facilities, which feature a variety of gaming choices, dining, and entertainment. These venues serve as convenient, high-quality local destinations. The company’s Gaming segment demonstrated strong performance in 2024, with first-quarter adjusted EBITDA reaching $136.8 million.

For discerning customers, Churchill Downs offers exclusive, high-end hospitality, particularly during Derby Week. This includes premium seating, fine dining, and personalized service in venues like the Paddock Club, ensuring unforgettable, luxurious event experiences. These premium offerings are designed to attract and retain top-tier clientele.

Churchill Downs leverages loyalty programs, such as their TwinSpires Club, to foster strong customer relationships within their casino and historical racing machine operations. These programs are designed to reward consistent engagement, offering tiered benefits and exclusive perks to their most valued patrons.

By providing VIP services and personalized incentives, Churchill Downs aims to enhance customer lifetime value. For instance, in 2023, their gaming segment, which includes casinos and historical racing, generated $1.4 billion in revenue, highlighting the importance of these customer retention strategies in a competitive landscape.

Churchill Downs cultivates customer relationships through a blend of high-touch hospitality at live events and robust digital engagement. For the Kentucky Derby, this means VIP experiences and personalized service, fostering loyalty that drives repeat attendance. In 2023, record attendance at the Derby highlighted the success of these strategies.

Online, platforms like TwinSpires offer direct support via chat, email, and phone, ensuring a seamless user experience. Loyalty programs, such as the TwinSpires Club, reward consistent engagement across gaming and racing. These efforts contribute to strong customer retention, as seen in the $1.4 billion revenue from their gaming segment in 2023.

Community engagement is also key, with initiatives like job creation and local partnerships, exemplified by the 2024 opening of Owensboro Racing & Gaming. Direct marketing, including personalized emails and targeted ads, further strengthens these connections, driving participation across all business segments and contributing to their $1.7 billion total revenue in 2023.

Churchill Downs leverages extensive broadcast partnerships, particularly with NBC Sports, as a crucial channel to promote its flagship events like the Kentucky Derby. These collaborations reach millions of viewers across the nation and globally, building substantial awareness and excitement for the sport.

In 2024, the Kentucky Derby on NBC achieved a significant viewership milestone, drawing an average of 16.7 million viewers, a 12% increase from the previous year. This vast audience engagement directly translates into increased interest and participation in wagering, making the broadcast a powerful customer acquisition and revenue-driving tool.

Churchill Downs utilizes a multi-faceted channel strategy, blending physical presence with robust digital offerings and strategic partnerships. Their owned physical venues, including iconic racetracks and casinos, serve as primary engagement points. Complementing this, the TwinSpires digital platform is key for wagering and gaming accessibility.

Broadcast partnerships, notably with NBC for the Kentucky Derby, act as powerful awareness and customer acquisition channels, reaching millions. Additionally, third-party affiliates and distribution networks extend their market reach for wagering and HRM operations.

Digital marketing and social media are critical for brand building and community engagement, driving traffic to both online and physical properties.

High-net-worth individuals and corporate clients represent a crucial customer segment for Churchill Downs, particularly drawn to exclusive, high-end hospitality experiences. These patrons seek luxury amenities, personalized service, and valuable networking opportunities, especially during marquee events like the Kentucky Derby. In 2024, Churchill Downs continued to cater to this demographic through premium seating, private suites, and meticulously crafted VIP packages, underscoring the significant revenue contribution from this discerning clientele.

Churchill Downs serves a diverse customer base, from dedicated horse racing enthusiasts and bettors who engage through platforms like TwinSpires, to casino and gaming patrons seeking entertainment. High-net-worth individuals and corporate clients are attracted to premium hospitality, while broader audiences, including families and tourists, attend for the overall event experience and iconic status.

In 2024, Churchill Downs continued to focus on enhancing these varied customer experiences. The company's strategic approach aims to maximize engagement across its different verticals, from the digital wagering of TwinSpires to the in-person appeal of its racing and gaming facilities.

The company's ability to cater to both the passionate bettor and the casual attendee is crucial. For instance, the 2024 Kentucky Derby saw robust attendance, highlighting the broad appeal of its marquee events.

Key customer segments for Churchill Downs include:

Churchill Downs invests heavily in marketing and advertising to boost its brand and attract customers to its various offerings, including the iconic Kentucky Derby and its online betting platform, TwinSpires. In 2023, the company reported selling, general, and administrative expenses of $492.7 million, a significant portion of which is allocated to these promotional activities.

These expenses cover a wide range of initiatives, from broad advertising campaigns for flagship events to targeted digital marketing efforts aimed at engaging horse racing enthusiasts and casino patrons. Sponsorship deals, crucial for major events like the Kentucky Derby, also represent a substantial financial outlay, ensuring brand visibility and association with prestigious sporting occasions.

Churchill Downs' cost structure is heavily influenced by direct payouts to bettors and gaming taxes, which are directly tied to revenue from wagering and casino operations. In 2023, these costs were significant, reflecting the core business of facilitating bets and operating gaming venues. The company also incurs substantial expenses in maintaining its extensive physical properties and investing in technology to support its online and in-person offerings.

Ticketing and admission sales are a cornerstone for Churchill Downs, particularly driven by the iconic Kentucky Derby. In 2023, the Kentucky Derby alone saw record attendance and robust ticket sales, contributing substantially to the company's revenue figures.

This revenue stream encompasses a range of offerings, from general admission tickets to lucrative premium seating and exclusive hospitality packages. The demand for these experiences, especially for marquee events, remains consistently high, ensuring a significant financial contribution.

Churchill Downs' revenue streams are diverse, encompassing pari-mutuel wagering, casino and historical racing machine operations, ticketing, sponsorships, and ancillary sales like food and beverage. The company's gaming segment, which includes casinos and HRMs, is a significant contributor, reporting $1.02 billion in revenue in 2023. Pari-mutuel wagering, both online via TwinSpires and at tracks, also forms a substantial base, with TwinSpires generating $388 million in revenue in 2023.