Churchill Downs Inc. to Surrender Racing Licenses in Louisiana

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The Fair Grounds racetrack, once bustling with activity, faces uncertainty as Churchill Downs Inc. plans to surrender racing licenses.

News Summary

Churchill Downs Inc. has announced plans to relinquish its live racing and off-track betting licenses for Fair Grounds Race & Slots due to significant financial losses. Recent legislative decisions have further complicated the company’s financial recovery efforts, leading to a 74% drop in OTB earnings. The potential closure of the historic racetrack poses serious risks to local jobs and the economy, raising concerns among local business owners who rely on racing events. Speculation about potential buyers is rising as the situation unfolds.

New Orleans — Churchill Downs Inc. (CDI) has announced its intention to surrender its live racing and off-track betting (OTB) licenses for Fair Grounds Race & Slots amid significant revenue losses and mounting challenges resulting from recent legislative decisions in Louisiana. This move comes after a recent ruling by the Louisiana Supreme Court that has severely impacted CDI’s financial capability by eliminating historical horse racing (HHR) revenue without local voter approval.

According to a letter from CDI’s CEO, Bill Carstanjen, directed to the Louisiana State Racing Commission (LSRC), the inaction from lawmakers has left the company with no viable options other than to relinquish its racing licenses. The company’s financial performance has dramatically declined, reporting a loss of nearly half of its OTB revenue, forcing CDI to contend with a staggering 74% drop in OTB earnings before interest, taxes, depreciation, and amortization (EBITDA) as a direct result of the court’s ruling.

CDI has emphasized that these financial setbacks pose a threat to its ability to sustain the required $9 million annual operational budget for the Fair Grounds facility. Despite multiple attempts to engage legislative support for financial recovery, the company has encountered significant roadblocks. Recent unfavorable legislation, specifically House Bill 540 and 547, has worsened the situation by promoting video poker expansion at truck stops and permitting fixed odds wagering on horse racing, which CDI views as detrimental to its interests.

With potential closure looming over Fair Grounds—one of the oldest racetracks in the United States—CDI has warned that this could have severe repercussions for the state’s equine industry and local economy. The most immediate concern is the loss of hundreds of jobs and the impact on local vendors that rely on the foot traffic and revenue generated during the racing season, which typically starts on Thanksgiving and extends through March.

During an emergency meeting convened by the LSRC, CDI’s legal counsel underscored the grave revenue challenges the organization is facing, including the very real possibility of shutting down racing operations in the upcoming fall season. This sentiment has also been echoed by state lawmakers such as Senate President Cameron Henry, who has expressed hesitance in allocating public subsidies to what he describes as a profitable private entity when weighed against other pressing budgetary priorities.

Local business owners surrounding Fair Grounds have voiced their concerns regarding the broader community impacts that losing the racing season could bring. They report a significant dependence on the racing events for customer traffic and seasonal sales, with the potential closure threatening the financial stability of many establishments in the area.

While CDI has not disclosed any clear intentions regarding the future of Fair Grounds should it withdraw from Louisiana, speculation has surfaced regarding potential buyers. There is particular interest in the racetrack from notable figures such as New Orleans Saints owner Gayle Benson, who has shown a commitment to supporting the horse racing industry.

The situation continues to develop as CDI navigates the complex intersection of regulatory pressures, legislative roadblocks, and strong financial constraints. The impact of these decisions remains to be seen, but the fate of Fair Grounds is uncertain as the organization prepares to shift its focus amid increasingly challenging conditions.