Kentucky Derby Operator Refuses to Pay $2.4M Fees
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 18 2026
0mins
Should l Buy CHDN?
The Horseracing Integrity and Safety Authority has claimed that Kentucky Derby operator Churchill Downs is refusing to pay its fair share to protect riders and horses from injuries, the New York Times' Joe Drape reports, citing a complaint filed to the company's board. The authority said the company is "freeloading" by refusing to pay fees, but using laboratory drug testing and safety inspections performed by HISA on its racetracks. The agency is threatening to shut down out-of-state betting on races at Churchill Downs and three other tracks it owns unless the company pays $2.4M in fees owed.
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Analyst Views on CHDN
Wall Street analysts forecast CHDN stock price to rise
7 Analyst Rating
7 Buy
0 Hold
0 Sell
Strong Buy
Current: 89.110
Low
125.00
Averages
137.33
High
146.00
Current: 89.110
Low
125.00
Averages
137.33
High
146.00
About CHDN
Churchill Downs Incorporated is a racing, online wagering and gaming entertainment company, which is anchored by its flagship event, the Kentucky Derby. The Company operates through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. The Live and Historical Racing segment includes live and historical pari-mutuel racing at Churchill Downs Racetrack and its historical racing properties in Kentucky, Virginia and New Hampshire. The Wagering Services and Solutions segment includes TwinSpires, which is a retail and online sports betting business; United Tote Company, which manufactures and operates pari-mutuel wagering systems for racetracks, off-track betting facilities (OTBs), and other pari-mutuel wagering businesses; and Exacta Systems, LLC that provides central determinant system technology in historical racing machine (HRMs) across the country. The Gaming segment is engaged in the casino properties and associated racetrack facilities.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Kentucky Court Rules HISA Fee Methodology Unlawful
- Court Ruling: The U.S. District Court for the Western District of Kentucky ruled that the Horseracing Integrity and Safety Authority (HISA) acted arbitrarily and capriciously, confirming that its purse-weighted fee methodology and related collection efforts for 2025 assessments are unlawful, directly impacting HISA's fee collection practices.
- Fee Dispute: Churchill Downs Incorporated (CHDN) and the New York Racing Association filed a lawsuit against HISA in late 2024, arguing that HISA's fee formula was inconsistent with the statute and should be based on racing starts, reflecting industry dissatisfaction with HISA's management.
- Threat of Unpaid Fees: HISA had sought approximately $2.4 million in unpaid assessments plus interest from Churchill Downs and its affiliated tracks, threatening that nonpayment could limit or suspend their ability to simulcast races to out-of-state wagering outlets, escalating tensions within the industry.
- CEO Statement: Churchill Downs CEO Bill Carstanjen stated that the court's decision indicates ongoing fiscal mismanagement by HISA, emphasizing the necessity of legal action and highlighting that this ruling will help refocus efforts on the joint mission of equine health and safety.
See More
Kentucky Court Rules HISA Fee Methodology Unlawful
- Court Ruling Outcome: The U.S. District Court for the Western District of Kentucky ruled that the Horseracing Integrity and Safety Authority (HISA) acted arbitrarily and capriciously, rendering its purse-weighted fee methodology unlawful, which will directly alleviate CDI's financial burden and reduce legal compliance pressures.
- Management Response: CDI CEO Bill Carstanjen expressed satisfaction with the court's decision, stating that HISA's actions wasted significant time and resources, highlighting fiscal mismanagement, which not only underscores the company's commitment to legal victories but also emphasizes its dedication to equine health and safety.
- Necessity of Legal Action: The court's ruling reiterates the necessity of CDI's legal action, indicating that HISA exceeded its authority in its enforcement actions, a result that may prompt HISA to reassess its fee policies, thereby impacting the regulatory environment across the industry.
- Company Background: With over 150 years of history, CDI, known for the Kentucky Derby, operates in live and historical racing entertainment, online wagering, and regional casino gaming, and the court's ruling will help the company reduce unnecessary legal obstacles in future business expansions, enhancing its competitive position in the market.
See More
Flutter Entertainment Lowers 2025 Revenue Forecast Amid Market Challenges
- Revenue Forecast Cut: Flutter Entertainment reported a 2025 revenue of $16.4 billion, missing its own forecast of $16.7 billion, indicating significant pressure in the competitive sports betting market that could undermine investor confidence.
- Intensifying Market Competition: Prediction markets like Kalshi and Polymarket are encroaching on the U.S. sports betting market share, with CEO Peter Jackson downplaying their impact, yet market reactions suggest investor concerns about this emerging threat are substantial.
- Escalating Legal Battles: The legal conflicts between prediction markets and regulators are complicating Flutter's regulatory landscape, potentially affecting its future operational strategies and market positioning as states push back against these new competitors.
- Significant Stock Decline: Both Flutter and DraftKings have seen their stock prices drop by approximately 50% this year, reflecting the market's serious perception of the threat posed by prediction markets, despite differing views among company executives on how to address it.
See More
Churchill Downs Reports Record Revenue and EBITDA for Q4 2025
- Record Financial Performance: Churchill Downs achieved record net revenue and adjusted EBITDA in Q4 2025, surpassing previous highs set in 2024, indicating sustained financial health and growth potential for the company.
- Outstanding Derby Week Results: The 2025 Kentucky Derby saw record handle and the highest television ratings in nearly 40 years, showcasing the company's success in event marketing and customer engagement, further solidifying its market leadership.
- Strategic Investment Expansion: The company plans to invest $180 million to $200 million in developing Rockingham Casino in New Hampshire while expanding HRM venues in Kentucky and Virginia, demonstrating a focus on future growth opportunities and strategic positioning.
- Continued Shareholder Returns: Churchill Downs repurchased over 4.2 million shares in 2025 and returned over $456 million through share repurchases and dividends, marking the 15th consecutive year of dividend increases per share, reflecting strong cash flow and commitment to shareholders.
See More
Dividend Analysis for Churchill Downs, Inc.
- Dividend History Trends: Churchill Downs, Inc. (CHDN) shows that while dividend amounts are unpredictable, the recent dividend may continue, with an expected annualized yield of 0.5% based on historical data.
- Trading History Analysis: With a current stock price of $89.02 and a trailing twelve-month volatility of 34%, CHDN's trading history provides a foundation for investors to assess risk versus reward effectively.
- Options Trading Dynamics: As of Thursday afternoon, the put volume among S&P 500 components reached 1.37 million contracts, while call volume was 2.49 million, indicating a strong preference for calls among investors, reflecting positive market sentiment.
- Risk and Reward Assessment: Investors must weigh the risks and rewards of selling December covered calls at the $100 strike price, especially considering the potential upside that could be forfeited if the stock price exceeds $100.
See More
Churchill Downs Q4 Earnings Report Analysis
- Earnings Miss: Churchill Downs reported a Q4 non-GAAP EPS of $0.97, missing expectations by $0.06, indicating potential pressure on profitability that may affect investor confidence.
- Revenue Growth: The company achieved Q4 revenue of $665.9 million, reflecting a 6.7% year-over-year increase and beating market expectations by $6.46 million, demonstrating strong growth momentum in historical racing and sports betting.
- Market Outlook: Despite the EPS miss, the revenue growth may support future capital expenditures, suggesting that investors might consider entering at lower prices while waiting for returns.
- Analyst Ratings: Seeking Alpha's Quant Rating on Churchill Downs indicates a cautious market outlook regarding its future performance, prompting investors to monitor the company's ongoing results in historical racing and sports betting.
See More
Kentucky Court Rules HISA Fee Methodology Unlawful
- Court Ruling: The U.S. District Court for the Western District of Kentucky ruled that the Horseracing Integrity and Safety Authority (HISA) acted arbitrarily and capriciously, confirming that its purse-weighted fee methodology and related collection efforts for 2025 assessments are unlawful, directly impacting HISA's fee collection practices.
- Fee Dispute: Churchill Downs Incorporated (CHDN) and the New York Racing Association filed a lawsuit against HISA in late 2024, arguing that HISA's fee formula was inconsistent with the statute and should be based on racing starts, reflecting industry dissatisfaction with HISA's management.
- Threat of Unpaid Fees: HISA had sought approximately $2.4 million in unpaid assessments plus interest from Churchill Downs and its affiliated tracks, threatening that nonpayment could limit or suspend their ability to simulcast races to out-of-state wagering outlets, escalating tensions within the industry.
- CEO Statement: Churchill Downs CEO Bill Carstanjen stated that the court's decision indicates ongoing fiscal mismanagement by HISA, emphasizing the necessity of legal action and highlighting that this ruling will help refocus efforts on the joint mission of equine health and safety.
See More
Kentucky Court Rules HISA Fee Methodology Unlawful
- Court Ruling Outcome: The U.S. District Court for the Western District of Kentucky ruled that the Horseracing Integrity and Safety Authority (HISA) acted arbitrarily and capriciously, rendering its purse-weighted fee methodology unlawful, which will directly alleviate CDI's financial burden and reduce legal compliance pressures.
- Management Response: CDI CEO Bill Carstanjen expressed satisfaction with the court's decision, stating that HISA's actions wasted significant time and resources, highlighting fiscal mismanagement, which not only underscores the company's commitment to legal victories but also emphasizes its dedication to equine health and safety.
- Necessity of Legal Action: The court's ruling reiterates the necessity of CDI's legal action, indicating that HISA exceeded its authority in its enforcement actions, a result that may prompt HISA to reassess its fee policies, thereby impacting the regulatory environment across the industry.
- Company Background: With over 150 years of history, CDI, known for the Kentucky Derby, operates in live and historical racing entertainment, online wagering, and regional casino gaming, and the court's ruling will help the company reduce unnecessary legal obstacles in future business expansions, enhancing its competitive position in the market.
See More
Flutter Entertainment Lowers 2025 Revenue Forecast Amid Market Challenges
- Revenue Forecast Cut: Flutter Entertainment reported a 2025 revenue of $16.4 billion, missing its own forecast of $16.7 billion, indicating significant pressure in the competitive sports betting market that could undermine investor confidence.
- Intensifying Market Competition: Prediction markets like Kalshi and Polymarket are encroaching on the U.S. sports betting market share, with CEO Peter Jackson downplaying their impact, yet market reactions suggest investor concerns about this emerging threat are substantial.
- Escalating Legal Battles: The legal conflicts between prediction markets and regulators are complicating Flutter's regulatory landscape, potentially affecting its future operational strategies and market positioning as states push back against these new competitors.
- Significant Stock Decline: Both Flutter and DraftKings have seen their stock prices drop by approximately 50% this year, reflecting the market's serious perception of the threat posed by prediction markets, despite differing views among company executives on how to address it.
See More
Churchill Downs Reports Record Revenue and EBITDA for Q4 2025
- Record Financial Performance: Churchill Downs achieved record net revenue and adjusted EBITDA in Q4 2025, surpassing previous highs set in 2024, indicating sustained financial health and growth potential for the company.
- Outstanding Derby Week Results: The 2025 Kentucky Derby saw record handle and the highest television ratings in nearly 40 years, showcasing the company's success in event marketing and customer engagement, further solidifying its market leadership.
- Strategic Investment Expansion: The company plans to invest $180 million to $200 million in developing Rockingham Casino in New Hampshire while expanding HRM venues in Kentucky and Virginia, demonstrating a focus on future growth opportunities and strategic positioning.
- Continued Shareholder Returns: Churchill Downs repurchased over 4.2 million shares in 2025 and returned over $456 million through share repurchases and dividends, marking the 15th consecutive year of dividend increases per share, reflecting strong cash flow and commitment to shareholders.
See More
Dividend Analysis for Churchill Downs, Inc.
- Dividend History Trends: Churchill Downs, Inc. (CHDN) shows that while dividend amounts are unpredictable, the recent dividend may continue, with an expected annualized yield of 0.5% based on historical data.
- Trading History Analysis: With a current stock price of $89.02 and a trailing twelve-month volatility of 34%, CHDN's trading history provides a foundation for investors to assess risk versus reward effectively.
- Options Trading Dynamics: As of Thursday afternoon, the put volume among S&P 500 components reached 1.37 million contracts, while call volume was 2.49 million, indicating a strong preference for calls among investors, reflecting positive market sentiment.
- Risk and Reward Assessment: Investors must weigh the risks and rewards of selling December covered calls at the $100 strike price, especially considering the potential upside that could be forfeited if the stock price exceeds $100.
See More
Churchill Downs Q4 Earnings Report Analysis
- Earnings Miss: Churchill Downs reported a Q4 non-GAAP EPS of $0.97, missing expectations by $0.06, indicating potential pressure on profitability that may affect investor confidence.
- Revenue Growth: The company achieved Q4 revenue of $665.9 million, reflecting a 6.7% year-over-year increase and beating market expectations by $6.46 million, demonstrating strong growth momentum in historical racing and sports betting.
- Market Outlook: Despite the EPS miss, the revenue growth may support future capital expenditures, suggesting that investors might consider entering at lower prices while waiting for returns.
- Analyst Ratings: Seeking Alpha's Quant Rating on Churchill Downs indicates a cautious market outlook regarding its future performance, prompting investors to monitor the company's ongoing results in historical racing and sports betting.
See More
