Churchill Downs Inc. recently announced it will open Derby City Gaming Downtown in in the heart of Louisville’s entertainment and dining district. The 43,000-square-foot venue will feature 500 historical horseracing machines and is expected to open in early 2023. Construction will begin later this year.
Churchill Downs Chief Executive Officer Bill Carstanjen said, “CDI is committed to investing in the city of Louisville and today we are particularly excited to announce this new downtown entertainment venue. Our expansion will be a win for the entire community in the Louisville area and will create $10 million to $12 million per year in additional purse money for Churchill Downs Racetrack. It is important that Louisville is a city that is thriving and a great place to live, work and visit, and we are committed to helping create economic vibrancy for every area of our community.”
Officials said the expansion will create 350 construction jobs and 100 new permanent jobs at the venue. Plans include a “fresh-air gaming area,” a Kentucky Derby merchandise store and more than 200 parking spaces. Three bars will include a sports bar with a stage for live entertainment, a premium bourbon library and a wine and charcuterie lounge.
Besides the historical flagship racetrack, Churchill Downs already operates Derby City Gaming in south Louisville, which opened in 2018. The company recently announced a $76 million expansion to add 400 more historical horseracing machines and a hotel. Churchill Downs also operates Oak Grove Racing and Gaming near Fort Campbell and Newport Racing and Gaming and Turfway Park in Northern Kentucky. Outside Kentucky, Churchill Downs operates casinos, racetracks, retail sportsbooks and the TwinSpires online betting platform.
The company recently sold its Arlington International Racecourse in Arlington Heights, Illinois to the Chicago Bears for almost $200 million, and announced a multimillion-dollar renovation to Churchill Downs racetrack in Louisville. It also plans to build a new casino resort in Terre Haute, Indiana.
Meanwhile, Kentucky lawmakers are considering increasing the tax rate on historical horseracing to bring in more money for the state’s struggling budget. The issue has been a focus of a special legislative committee, the Pari-Mutuel Wagering Taxation Task Force.
According to a private analysis, Kentucky taxes historical racing machines at 18 percent, compared to 27 percent in Indiana and 34 percent in Ohio. The games generated about $15 million in tax revenue in 2020, an amount critics say is too low for a $3 billion industry.
State Senator Damon Thayer, co-chair of the panel, said he does not want to raise taxes on the historical horseracing industry. He said, “The general fund is going to be getting more revenue regardless of whether we do something or do nothing in the next session or future sessions. It’s called growth. It’s called jobs, economic opportunity. Every one of these places opens up, creates new jobs, those people are paying taxes.”
However, during a recent legislative hearing, Thomas Lambert, a professor at the University of Louisville College of Business, said a tax increase would lead to a drop in patrons. He said, “Because the establishments have to decrease the payout to patrons, they end up going somewhere else, such as across the river to Cincinnati or Indiana.”
