Churchill Downs Reports Q1 Results

10 May 2006

LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated ("CDI" or "Company") (NASDAQ: CHDN) today reported results for the first quarter ended March 31, 2006.

Net revenues from continuing operations for the quarter were $45.0 million versus $51.9 million during the first quarter of 2005. The Company's net loss during the first quarter of 2006 was $10.3 million, or $0.79 per diluted share, versus a net loss of $13.9 million, or $1.08 per diluted share, during the same period in 2005. The Company reported a net loss from continuing operations of $10.3 million during the quarter, or $0.79 per diluted share, compared to a net loss from continuing operations of $9.9 million, or $0.77 per diluted share, during the year-earlier period.

CDI historically records a net loss for the first quarter of the year as it conducts minimal live racing events during that period. As the result of damage caused to its home site by Hurricane Katrina, Fair Grounds Race Course conducted a shortened 2005-2006 race meet at Harrah's Louisiana Downs that offered only 12 days of live racing during the quarter versus 61 days of live racing during the same period in 2005, which resulted in a significant decrease in simulcast revenues for the Churchill Downs Simulcast Network. Meanwhile, the Company's year-to-date effective tax rate decreased from 44 percent to 39 percent, resulting primarily from the non-deductibility of Florida legislative costs recognized during the first quarter of 2005. The reduction of the tax rate is the primary reason for the year-over-year increase in net loss from continuing operations per diluted share.

During the quarter, the Company benefited from increased profitability at its Louisiana off-track betting ("OTB") and video poker operations, which topped their 2005 first-quarter performance even though only seven of 11 OTB locations were in service during the quarter. Those gains were partially offset by soft business levels at Arlington Park, Ellis Park, Hoosier Park and Trackside at Churchill Downs.

CDI President and Chief Executive Officer Thomas H. Meeker said the Company's second quarter got off to a strong start with a very successful Kentucky Derby and Oaks weekend at Churchill Downs racetrack. "Total wagering on the three-day Kentucky Derby weekend comprising May 4-6 equaled $219.4 million, an increase of 11.1 percent over the $197.6 million wagered on those three race days last year," said Meeker. "The Derby race eclipsed its own North American record for betting on a single race as fans worldwide wagered $118.4 million on the 2006 'Run for the Roses,' a 14-percent increase over last year's total of $104.0 million. Total wagering on the 2006 Kentucky Oaks soared to a record $9.9 million, a 43-percent increase over the $6.9 million set in 2005.

"On-track attendance totals of 157,536 and 108,065 for Derby and Oaks, respectively, were the second highest in Churchill Downs history for both events, while Thursday's attendance of 25,386 set a new record for that race day and points to our success in building the Thursday before Derby into another marquee race day for the Company. Overall, these outstanding results demonstrate the high quality and mass appeal of our Company's signature events as well as the continued strength of our Kentucky Derby brand."

Meeker continued, "We are also pleased with the results from this year's New Orleans Jazz and Heritage Festival, which we again hosted over two weekends at our Fair Grounds Race Course in Louisiana. While final attendance and revenue numbers are not yet available, preliminary evidence suggests that the event was a great success and an indicator of the rebirth of the New Orleans community. With the festival now behind us, our Fair Grounds team will turn its full attention to readying the track and facilities for an 81-day race meet scheduled to begin Thanksgiving Day.

"We are encouraged by recent events in Illinois, where lawmakers passed legislation in the form of a riverboat gambling tax that for a two-year period would provide Arlington Park with an estimated $10 million in annual supplemental revenues. Of that amount, 60 percent would go into the track's purse program and 40 percent would go to improve, maintain and operate racetrack facilities and market the live racing product. We commend Illinois lawmakers for taking action to provide a more level playing field for the Illinois horse racing industry and hope Gov. Rod Blagojevich will soon sign the bill into law.

"Looking ahead, our management team will continue to focus on rationalizing the economics of account-wagering and offshore-wagering platforms, while advancing our international distribution strategy. Towards that end, we have purchased an ownership interest in Racing World, a new subscription television channel that delivers CDI racing signals, along with those of other top North American and international racetracks, to customers in the United Kingdom and Ireland. We will also continue to examine our non-strategic assets and realign our cost structure to ensure our fiscal and human capital is fully engaged in maximizing the Company's primary growth channels."

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	Churchill Downs Reports Q1 Results 10 May 2006 LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated ("CDI" or "Company") (NASDAQ: CHDN) today reported results for the first quarter ended March 31, 2006. Net revenues from continuing operations for the quarter were $45.0 million versus $51.9 million during the first quarter of 2005. The Company's net loss during the first quarter of 2006 was $10.3 million, or $0.79 per diluted share, versus a net loss of $13.9 million, or $1.08 per diluted share, during the same period in 2005. The Company reported a net loss from continuing operations of $10.3 million during the quarter, or $0.79 per diluted share, compared to a net loss from continuing operations of $9.9 million, or $0.77 per diluted share, during the year-earlier period. CDI historically records a net loss for the first quarter of the year as it conducts minimal live racing events during that period. As the result of damage caused to its home site by Hurricane Katrina, Fair Grounds Race Course conducted a shortened 2005-2006 race meet at Harrah's Louisiana Downs that offered only 12 days of live racing during the quarter versus 61 days of live racing during the same period in 2005, which resulted in a significant decrease in simulcast revenues for the Churchill Downs Simulcast Network. Meanwhile, the Company's year-to-date effective tax rate decreased from 44 percent to 39 percent, resulting primarily from the non-deductibility of Florida legislative costs recognized during the first quarter of 2005. The reduction of the tax rate is the primary reason for the year-over-year increase in net loss from continuing operations per diluted share. During the quarter, the Company benefited from increased profitability at its Louisiana off-track betting ("OTB") and video poker operations, which topped their 2005 first-quarter performance even though only seven of 11 OTB locations were in service during the quarter. Those gains were partially offset by soft business levels at Arlington Park, Ellis Park, Hoosier Park and Trackside at Churchill Downs. CDI President and Chief Executive Officer Thomas H. Meeker said the Company's second quarter got off to a strong start with a very successful Kentucky Derby and Oaks weekend at Churchill Downs racetrack. "Total wagering on the three-day Kentucky Derby weekend comprising May 4-6 equaled $219.4 million, an increase of 11.1 percent over the $197.6 million wagered on those three race days last year," said Meeker. "The Derby race eclipsed its own North American record for betting on a single race as fans worldwide wagered $118.4 million on the 2006 'Run for the Roses,' a 14-percent increase over last year's total of $104.0 million. Total wagering on the 2006 Kentucky Oaks soared to a record $9.9 million, a 43-percent increase over the $6.9 million set in 2005. "On-track attendance totals of 157,536 and 108,065 for Derby and Oaks, respectively, were the second highest in Churchill Downs history for both events, while Thursday's attendance of 25,386 set a new record for that race day and points to our success in building the Thursday before Derby into another marquee race day for the Company. Overall, these outstanding results demonstrate the high quality and mass appeal of our Company's signature events as well as the continued strength of our Kentucky Derby brand." Meeker continued, "We are also pleased with the results from this year's New Orleans Jazz and Heritage Festival, which we again hosted over two weekends at our Fair Grounds Race Course in Louisiana. While final attendance and revenue numbers are not yet available, preliminary evidence suggests that the event was a great success and an indicator of the rebirth of the New Orleans community. With the festival now behind us, our Fair Grounds team will turn its full attention to readying the track and facilities for an 81-day race meet scheduled to begin Thanksgiving Day. "We are encouraged by recent events in Illinois, where lawmakers passed legislation in the form of a riverboat gambling tax that for a two-year period would provide Arlington Park with an estimated $10 million in annual supplemental revenues. Of that amount, 60 percent would go into the track's purse program and 40 percent would go to improve, maintain and operate racetrack facilities and market the live racing product. We commend Illinois lawmakers for taking action to provide a more level playing field for the Illinois horse racing industry and hope Gov. Rod Blagojevich will soon sign the bill into law. "Looking ahead, our management team will continue to focus on rationalizing the economics of account-wagering and offshore-wagering platforms, while advancing our international distribution strategy. Towards that end, we have purchased an ownership interest in Racing World, a new subscription television channel that delivers CDI racing signals, along with those of other top North American and international racetracks, to customers in the United Kingdom and Ireland. We will also continue to examine our non-strategic assets and realign our cost structure to ensure our fiscal and human capital is fully engaged in maximizing the Company's primary growth channels."