Churchill Downs reports Q1 results

9 May 2007

LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) today reported results for the first quarter ended March 31, 2007.Net revenues from continuing operations for the first quarter of 2007 were $47.84 million, an increase of 32.55 percent from net revenues from continuing operations of $36.09 million one year ago. The Company narrowed its first-quarter net loss from continuing operations by 15.11 percent, posting a net loss of $8.43 million from continuing operations, or $0.63 per diluted common share, compared to a net loss from continuing operations of $9.93 million, or $0.76 per diluted common share, during the first quarter of 2006.

Churchill Downs Incorporated historically reports a net loss during the first quarter because its four racetracks host relatively few live racing dates during that timeframe as opposed to the final nine months of the year. During the first quarter of 2007, the Company did benefit from an additional 45 days of live racing at Fair Grounds Race Course in New Orleans, which posted strong meet-end results after resuming its standard racing season in late November 2006. Fair Grounds was closed for 15 months following Hurricane Katrina in late 2005 and conducted only 12 days of live racing at a host site, Harrah's Louisiana Downs, in northern Louisiana during the first quarter of 2006.

The continued strength of the Company's Louisiana Operations, including Fair Grounds' simulcast-wagering and video poker facilities, contributed to the first quarter year-over-year growth in net revenues from continuing operations. During the quarter, the Company also benefited from lower corporate expenses; Arlington Park serving as the host site for "dark day" simulcast wagering in Illinois for an additional eight days; and from a positive adjustment in workers' compensation insurance reserves.

Churchill Downs Incorporated's President and Chief Executive Officer Robert L. Evans said that while improving the Company's year-over-year financial performance from continuing operations during the first quarter, the Churchill Downs team also moved forward with a key strategic initiative intended to position the Company for future growth.

"In early March, we announced our entry into the account-wagering business and two months later launched our new online wagering platform, TwinSpires (www.twinspires.com), in time to accept wagers on this year's Kentucky Derby and Oaks at Churchill Downs," said Evans. "We experienced exceptional demand from customers wanting to register for TwinSpires accounts during the four days between our launch date and the Kentucky Derby on May 5, with approximately 9,500 customers signing up for and funding TwinSpires accounts. We had a very ambitious plan to bring TwinSpires to the market in a very short period of time.

"We were also pleased to see the continued popularity of our signature racing events, as wagering for the 133rd Kentucky Derby Presented by Yum! Brands matched the record levels attained during the 2006 running, and we set new wagering records for the 133rd Kentucky Oaks, making Kentucky Derby weekend at Churchill Downs the biggest racing event in North America. We are pleased with these results given that rain on Kentucky Oaks Day kept thousands of general admission patrons away, and three of our races on the Derby undercard, including two of our stakes races, had unusually short fields. Additionally, one dozen wagering outlets based primarily in Oklahoma could not accept wagers on the Oaks and Derby race cards due to a horsemen's dispute. We believe that issue, along with the short Derby Day fields, contributed to the decrease in off-track wagering."

Evans continued, "We are still examining to what extent changes in the account-wagering market may have impacted handle on Kentucky Derby and Oaks Days, considering two large U.S account-wagering providers were not taking wagers on our products and our own platform, TwinSpires, debuted in the middle of Derby week. Based on the wagering data we have so far, we are pleased to see that handle did migrate to other account-wagering providers that pay higher host fee commissions to the horsemen and tracks that produce the races as a result of the agreements they negotiated with TrackNet Media Group LLC. Through these agreements, we have the potential for revenue and purse growth with or without growth in handle.

"In the weeks ahead, we look forward to beginning construction on both a temporary and permanent slot machine gaming facility at Fair Grounds, with an October 2007 target date for the opening of our temporary operation. We also anticipate adding new content, features and handicapping tools to our TwinSpires account-wagering platform that will further distinguish TwinSpires from its competitors. The incredible response to our TwinSpires launch confirmed for us the power of the Churchill Downs and Kentucky Derby brands in attracting customers to our Company and its products and services."

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	Churchill Downs reports Q1 results 9 May 2007 LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) today reported results for the first quarter ended March 31, 2007.Net revenues from continuing operations for the first quarter of 2007 were $47.84 million, an increase of 32.55 percent from net revenues from continuing operations of $36.09 million one year ago. The Company narrowed its first-quarter net loss from continuing operations by 15.11 percent, posting a net loss of $8.43 million from continuing operations, or $0.63 per diluted common share, compared to a net loss from continuing operations of $9.93 million, or $0.76 per diluted common share, during the first quarter of 2006. Churchill Downs Incorporated historically reports a net loss during the first quarter because its four racetracks host relatively few live racing dates during that timeframe as opposed to the final nine months of the year. During the first quarter of 2007, the Company did benefit from an additional 45 days of live racing at Fair Grounds Race Course in New Orleans, which posted strong meet-end results after resuming its standard racing season in late November 2006. Fair Grounds was closed for 15 months following Hurricane Katrina in late 2005 and conducted only 12 days of live racing at a host site, Harrah's Louisiana Downs, in northern Louisiana during the first quarter of 2006. The continued strength of the Company's Louisiana Operations, including Fair Grounds' simulcast-wagering and video poker facilities, contributed to the first quarter year-over-year growth in net revenues from continuing operations. During the quarter, the Company also benefited from lower corporate expenses; Arlington Park serving as the host site for "dark day" simulcast wagering in Illinois for an additional eight days; and from a positive adjustment in workers' compensation insurance reserves. Churchill Downs Incorporated's President and Chief Executive Officer Robert L. Evans said that while improving the Company's year-over-year financial performance from continuing operations during the first quarter, the Churchill Downs team also moved forward with a key strategic initiative intended to position the Company for future growth. "In early March, we announced our entry into the account-wagering business and two months later launched our new online wagering platform, TwinSpires (www.twinspires.com), in time to accept wagers on this year's Kentucky Derby and Oaks at Churchill Downs," said Evans. "We experienced exceptional demand from customers wanting to register for TwinSpires accounts during the four days between our launch date and the Kentucky Derby on May 5, with approximately 9,500 customers signing up for and funding TwinSpires accounts. We had a very ambitious plan to bring TwinSpires to the market in a very short period of time. "We were also pleased to see the continued popularity of our signature racing events, as wagering for the 133rd Kentucky Derby Presented by Yum! Brands matched the record levels attained during the 2006 running, and we set new wagering records for the 133rd Kentucky Oaks, making Kentucky Derby weekend at Churchill Downs the biggest racing event in North America. We are pleased with these results given that rain on Kentucky Oaks Day kept thousands of general admission patrons away, and three of our races on the Derby undercard, including two of our stakes races, had unusually short fields. Additionally, one dozen wagering outlets based primarily in Oklahoma could not accept wagers on the Oaks and Derby race cards due to a horsemen's dispute. We believe that issue, along with the short Derby Day fields, contributed to the decrease in off-track wagering." Evans continued, "We are still examining to what extent changes in the account-wagering market may have impacted handle on Kentucky Derby and Oaks Days, considering two large U.S account-wagering providers were not taking wagers on our products and our own platform, TwinSpires, debuted in the middle of Derby week. Based on the wagering data we have so far, we are pleased to see that handle did migrate to other account-wagering providers that pay higher host fee commissions to the horsemen and tracks that produce the races as a result of the agreements they negotiated with TrackNet Media Group LLC. Through these agreements, we have the potential for revenue and purse growth with or without growth in handle. "In the weeks ahead, we look forward to beginning construction on both a temporary and permanent slot machine gaming facility at Fair Grounds, with an October 2007 target date for the opening of our temporary operation. We also anticipate adding new content, features and handicapping tools to our TwinSpires account-wagering platform that will further distinguish TwinSpires from its competitors. The incredible response to our TwinSpires launch confirmed for us the power of the Churchill Downs and Kentucky Derby brands in attracting customers to our Company and its products and services."