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Segment Information
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Segment Information
21. SEGMENT INFORMATION
We manage our operations through three reportable segments: Live and Historical Racing, TwinSpires, and Gaming. Refer to Note 1, Description of Business for additional information regarding the changes we made to our segments during the first quarter of 2022. Prior year amounts have been reclassified to conform to this presentation. Our operating segments reflect the internal management reporting used by our chief operating decision maker to evaluate results of operations and to assess performance and allocate resources.
•Live and Historical Racing
The Live and Historical Racing segment primarily includes live and historical pari-mutuel racing related revenue and expenses at Churchill Downs Racetrack and our historical racing properties in Kentucky, Virginia, and New Hampshire.
Our Live and Historical Racing properties earn commissions primarily from pari-mutuel wagering on live and historical races; simulcast fees earned from other wagering sites, fees from racing event-related services including admissions, personal seat licenses, sponsorships, television rights, other miscellaneous services, and revenue from food and beverage services.
•TwinSpires
The TwinSpires segment includes the revenue and expenses from our TwinSpires horse racing business, our TwinSpires sports betting business, United Tote, and Exacta.
Our TwinSpires horse racing business operates the online horse racing wagering business for TwinSpires.com, BetAmerica.com, and other white-label platforms; facilitates high dollar wagering by certain customers; and provides the Bloodstock Research Information Services platform for horse racing statistical data. TwinSpires accepts pari-mutuel wagers from customers residing in certain states who establish and fund an account from which these customers may place wagers via telephone, mobile applications, or through the Internet.
Our TwinSpires sports betting business includes the results of our retail sports books at our wholly owned gaming properties, our retail sports books in Kentucky, and our monetized online sports wagering licenses in Pennsylvania and
Kentucky. The retail and online sports books, if applicable, related to Rivers Des Plaines and MVG are included in the Gaming segment.
United Tote manufactures and operates pari-mutuel wagering systems for racetracks, OTBs and other pari-mutuel wagering businesses. United Tote provides totalisator services which accumulate wagers, calculate payoffs and displays wagering data to patrons who wager on horse races. United Tote has contracts to provide totalisator services to third-party racetracks, OTBs, and other pari-mutuel wagering businesses and also provides these services at our facilities.
On August 22, 2023, the Company completed the acquisition of Exacta. Exacta is a leading provider of central determinate system technology in HRMs across the country. Exacta's system architecture supports multiple game vendors and virtually unlimited math modeling capabilities on a single system enabling Exacta to deliver a diverse gaming library to Company owned and third-party HRM entertainment venues in Kentucky, Virginia, Wyoming, and New Hampshire.
•Gaming
The Gaming segment includes revenue and expenses for the wholly owned casino properties and associated racetrack facilities which support the casino license in Florida, Iowa, Louisiana, Maine, Maryland, Mississippi, New York, and Pennsylvania. The Gaming segment also includes our share of our equity investments in Illinois and Ohio.
The Gaming segment generates revenue and expenses from slot machines, table games, VLTs, video poker, HRMs, ancillary food and beverage services, hotel services, commission on pari-mutuel wagering, racing event-related services, and other miscellaneous operations.
On June 26, 2023, the Company's management agreement for Lady Luck expired and was not renewed. The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.
We have aggregated Arlington as well as certain corporate operations, and other immaterial joint ventures in All Other to reconcile to consolidated results.
Eliminations include the elimination of intersegment transactions. We utilize non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. Adjusted EBITDA includes the following adjustments:
Adjusted EBITDA includes our portion of EBITDA from our equity investments.
Adjusted EBITDA excludes:
•Transaction expense, net which includes:
–Acquisition, disposition, and property sale related charges;
–Direct online Sports and Casino business exit costs; and
–Other transaction expense, including legal, accounting, and other deal-related expense;
•Stock-based compensation expense;
•Rivers Des Plaines' impact on our investments in unconsolidated affiliates from:
–The impact of changes in fair value of interest rate swaps; and
–Legal reserves and transaction costs;
•Asset impairments;
•Gain on sales of assets;
•Legal reserves;
•Pre-opening expense; and
•Other charges, recoveries, and expenses
As of December 31, 2021, Arlington ceased racing and simulcast operations. On February 15, 2023, the Company closed on the sale of the property to the Chicago Bears. Refer to Note 4, Dispositions for additional information. Arlington's results and exit costs in 2022 and 2023 are treated as an adjustment to EBITDA.
We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the accompanying Consolidated Statements of Comprehensive Income.
The tables below present net revenue from external customers and intercompany revenue from each of our segments, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA:
Net revenue by segment is comprised of the following:
Years Ended December 31,
(in millions)202320222021
Live and Historical Racing$1,047.3 $614.6 $409.1 
TwinSpires444.9436.4451.4 
Gaming968.6755.9695.4 
All Other0.9 2.9 41.3 
Net Revenue$2,461.7 $1,809.8 $1,597.2 
Adjusted EBITDA by segment is comprised of the following:
Year Ended December 31, 2023
(in millions)Live and Historical RacingTwinSpiresGaming
Revenue$1,084.6 $458.4 $974.6 
Gaming taxes and purses(267.7)(22.6)(322.8)
Marketing and advertising(37.6)(9.8)(35.4)
Salaries and benefits(107.0)(29.3)(146.0)
Content expense(6.5)(205.1)(8.8)
Selling, general and administrative expense(31.9)(12.4)(42.7)
Maintenance, insurance and utilities(43.2)(3.8)(40.0)
Property and other taxes(6.0)(0.2)(13.5)
Other operating expense(110.6)(44.1)(70.2)
Other income 1.3 1.0 193.4 
Adjusted EBITDA$475.4 $132.1 $488.6 
Year Ended December 31, 2022
(in millions)Live and Historical RacingTwinSpiresGaming
Revenue$646.4 $441.6 $761.8 
Gaming taxes and purses(168.6)(27.0)(278.1)
Marketing and advertising(19.8)(13.0)(18.9)
Salaries and benefits(63.4)(26.8)(102.7)
Content expense(3.4)(203.3)(8.3)
Selling, general and administrative expense(18.6)(9.7)(31.3)
Maintenance, insurance and utilities(24.3)(3.0)(31.1)
Property and other taxes(2.6)(0.2)(10.5)
Other operating expense(58.6)(44.6)(49.9)
Other income 0.4 0.1 190.9 
Adjusted EBITDA$287.5 $114.1 $421.9 
Year Ended December 31, 2021
(in millions)Live and Historical RacingTwinSpiresGaming
Revenue$430.6 $457.8 $698.4 
Gaming taxes and purses(126.3)(30.7)(264.4)
Marketing and advertising(12.9)(49.4)(11.8)
Salaries and benefits(48.4)(27.0)(87.1)
Content expense(2.5)(206.6)(4.7)
Selling, general and administrative expense(12.8)(11.0)(27.9)
Maintenance, insurance and utilities(18.5)(2.5)(25.9)
Property and other taxes(3.1)(0.2)(9.6)
Other operating expense(31.4)(47.7)(36.8)
Other income 0.3 — 181.7 
Adjusted EBITDA$175.0 $82.7 $411.9 
 Years Ended December 31,
(in millions)202320222021
Reconciliation of Comprehensive Income to Adjusted EBITDA:
Net income and comprehensive income$417.3 $439.4 $249.1 
Additions:
Depreciation and amortization169.0 113.7 103.2 
Interest expense268.4 147.3 84.7 
Income tax provision144.5 169.4 94.5 
EBITDA$999.2 $869.8 $531.5 
Adjustments to EBITDA:
Stock-based compensation expense$32.9 $31.8 $27.8 
Legal reserves(1.2)3.8 — 
Pre-opening expense18.6 13.2 5.8 
Arlington exit costs9.4 5.7 5.3 
Other expense, net7.0 1.7 0.2 
Transaction expense, net4.8 42.1 2.6 
Asset impairments24.6 38.3 15.3 
Other income, expense:
Interest, depreciation and amortization expense related to equity investments40.2 42.8 41.5 
Changes in fair value of Rivers Des Plaines' interest rate swaps— (12.6)(12.9)
Rivers Des Plaines' legal reserves and transactions costs— 0.6 9.9 
Other charges and recoveries, net2.4 1.0 — 
     Gain on sale of assets(114.0)(274.6)— 
Total adjustments to EBITDA24.7 (106.2)95.5 
Adjusted EBITDA$1,023.9 $763.6 $627.0 
Adjusted EBITDA by segment:
Live and Historical Racing$475.4 $287.5 $175.0 
TwinSpires132.1 114.1 82.7 
Gaming488.6 421.9 411.9 
Total segment Adjusted EBITDA1,096.1 823.5 669.6 
All Other(72.2)(59.9)(42.6)
Total Adjusted EBITDA$1,023.9 $763.6 $627.0 
The table below presents total asset information for each of our segments:
 December 31,
(in millions)20232022
Total assets:
Live and Historical Racing$3,872.9 $3,345.4 
TwinSpires473.9 287.9 
Gaming1,920.9 1,824.2 
Total segment assets6,267.7 5,457.5 
All Other687.8 749.3 
$6,955.5 $6,206.8 

The table below presents total capital expenditures for each of our segments:
 Years Ended December 31,
(in millions)202320222021
Capital expenditures:
Live and Historical Racing$461.1 $307.0 $60.1 
TwinSpires14.6 87.6 18.6 
Gaming188.1 11.8 10.3 
Total segment capital expenditures663.8 406.4 89.0 
All Other12.7 17.1 2.8 
Total capital expenditures$676.5 $423.5 $91.8