Q3 2025 Churchill Downs Inc Earnings Call

Later, we will conduct a question and answer session and instructions will be given at that time, we ask all question and answer participants to please limit themselves to one question.

As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference Mr. Sam All Rich Vice President Investor Relations.

Thank you Andrew Good morning, and welcome to our third quarter 2025 earnings Conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2025 third quarter business results were released yesterday afternoon, a copy of this release announcing results and other financial and statistical information about the period to.

Presented in this conference call, including information required by regulation G is available at the section of the company's website titled News located at Churchill Downs incorporated Dot com as well as in the website's Investor section before we get started I would like to remind you that some of the statements that we make today may include forward looking statements. These statements involve a number of <unk>.

Risks and uncertainties that could cause actual results to differ materially all forward looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC specifically the most recent reports on Form 10-Q and Form 10-K any forward looking statements that we make are based on assumptions as of today.

And we undertake no obligation to update these statements as a result of new information or future events. During this call. We will present, both GAAP and non-GAAP financial measures a reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release, the press release and Form 10-Q are available on our website at Churchill Downs incorporated Dot com.

And now I'll turn the call over to our Chief Executive Officer, Mr. Bill Carsten car stay engine.

Thanks, Sam Good morning, everyone with me today are several members of our team, including Bill Mudd, Our President and Chief operating Officer, Marcia Dall, Our Chief Financial Officer, and Brad Blackwell, Our General counsel.

I will share an update on growth plans for our company, including with respect to the Kentucky Derby and our <unk> businesses.

Then Marshall will provide insight into our financial results as well as an update on our capital management strategy.

After she finishes we will take your questions.

First regarding our third quarter results.

We delivered overall record that revenue and record adjusted EBITDA in the third quarter we.

We also delivered record adjusted EBITDA for our live and historical racing segment as well as our wagering services and solutions segment.

We are also very pleased with the performance of our regional gaming properties in the third quarter. The results reflect consistent strength from our high end and rated guests along with nice growth from our unrated players across the majority of our markets.

Now, let's talk about our plans for the company, both near term and long term.

First regarding our plans for Derby week in Churchill Downs Racetrack.

During our last earnings call I discussed the five key growth catalysts for the Derby that will power the growth of Churchill Downs race track in 2026 and beyond.

The first is ticketing revenue driven by premium experiences during Derby week.

The demand for the Kentucky Derby and for Derby week tickets is continuing to grow as we deliver new and unique customer experiences.

We will also realize further incremental ticketing revenue from the investments we've made over the last number of years.

One example of this is the starting gate pavilion and courtyard.

We significantly improved this area this past year and the guest feedback has been overwhelmingly positive.

As a reminder, this project transform 10000 bleacher seats into a combination of approximately 8500 premium stadium and track side box seats.

We also significantly improved the amenities for these guests as well as for an additional 2800 people seated in existing surrounding sections, who are now able to access the hospitality options of the newly renovated area.

We believe that ticketing revenue from the starting gate pavilion and courtyard and from other recent investments as well as general price increases will provide meaningful adjusted EBITDA growth for Derby week going forward.

The second driver of long term growth for Derby week as our broadcast rights.

As I discussed on our last earnings call, our NBC deal will deliver $10 million increase in adjusted EBITDA for 2026.

We also announced that NBC will for the first time broadcast the Kentucky Oaks rates in 2026 during prime time on Friday Night May one.

We believe this will amplify awareness engagement and wagering for both the Kentucky Oaks race and for the Kentucky Derby. The next day on Saturday May 2nd.

The third driver of long term growth as wagering.

We continue to attract the best horses from around the world and are benefiting from the Derby is expanding cultural relevance both domestically and internationally.

We believe the increasing availability of online sports wagering across the United States is very much a positive development for wagering on the Kentucky Derby and races across Derby week.

A huge customer base delivered by the online platforms gives us the opportunity to reach more potential betters and fans than ever before.

Also of note our twin spires Dot Com platform has continued to post strong growth in unique users. During this period of rapid sports wagering expansion and these players are remaining active and engaged long after the Derby.

Internationally, we recently announced the expansion of the European and Middle Eastern Road to the Kentucky Derby by adding three new points races in Dubai in Saudi Arabia.

There are now 10 races across five countries that comprised the series, allowing for up to two horses to qualify for the Kentucky Derby.

This strengthens the quality and intrigue of the international pathway to the Derby and extends our brand further into two of the sport's most dynamic and high profile markets with Dubai in Saudi Arabia.

We are very excited to deepen our engagement with owners trainers sponsors and fans across these regions, which we believe will generate long term benefits for Churchill Downs racetrack and enhance the global reach of the Kentucky Derby.

The fourth driver of sponsorships and licensing.

Sponsors are increasingly recognizing the value of our expanding national and global footprint driven by growth in onsite attendance television and digital audiences, social media engagement and other strategic initiatives.

The heightened visibility is attracting interest from some of the most well respected brands and we remain focused on broadening and strengthening our sponsorship portfolio in the years ahead.

And finally, the fifth driver is selective renovations and expansions through capital investment.

As discussed on our last earnings call. We are on track to complete the renovations of two of our most prestigious and exclusive areas the finish lines suites and the mansion for the 2026, Kentucky Derby.

We announced last evening that we are planning to invest $280 million to $300 million to build a new structure called victory run just past the finish line between the Sky tariffs and the first turns section an area, we refer to internally as the gap in the smile.

Victory run will be a fantastic location and will offer tremendous views of the horses and the pageantry of the event.

This new venue will replace existing uncovered ground level box seats and data dining areas with new premium hospitality offerings, including private suites, and a combination of indoor and outdoor dining and covered box seats.

Construction will begin following the 2026, Kentucky Derby with victory run completed in time for the 2028 Derby.

During the 2027 Derby Derby $1 53, we plan to offer them offer an interim upgraded.

<unk> experience in this area featuring.

Featuring temporary covered stadium seating and enhanced amenities to ensure guests enjoy a premium experience even during the year are partially completed construction.

We remain committed to strategically investing in our flagship asset over the long term to enhance the guest experience during derby week and to broaden our appeal to new audiences. These investments have delivered and we will continue to deliver adjusted EBITDA growth with outstanding returns for our investors for years to come.

Churchill Downs race track and the Kentucky Derby remain the Crown jewel of our company.

These five growth catalysts provide a strong foundation for a vibrant and successful future for the Kentucky Derby and our company.

Next turning to our HR and progress first in Kentucky.

We are on track to open our eighth HRS entertainment venue in Calvert City during the first quarter of 2026 on time and on budget.

This will be an important addition to our portfolio of entertainment properties in the Commonwealth.

With a population of 300000 people within a 60 mile drive our Calvert City site is conveniently located near the intersection of two interstates, providing easier access for customers from several surrounding cities and southwestern Kentucky.

This venue will be branded Marshall yards racing and gaming inspired by the railroad industry that shape the surrounding communities.

Marshall yards will feature 250, <unk> and our music stage that we'll host a wide variety of live entertainment attracting customers to the special property.

Turning to Virginia.

As expected the Roes continued to show great progress during the third quarter.

Gross gaming revenues grew meaningfully and we are rapidly building our customer database.

We were also pleased to see continued growth in weekday gaming revenue driven by increased visitation frequency through our data driven marketing as.

As we approach the one year anniversary of the opening we are making excellent progress in laying the foundation for long term growth that the Roes.

And Central Virginia, We completed the expansion project at our Richmond HRS venue.

We renovated and unused space to expand our gaming floor in may of this year and completed the remaining phase of this project in August which added 450 incremental HRS to the property.

Yeah.

We also opened the Roche our gaming parlor in Henrico County on September 29th ahead of schedule and below budget.

Bill Carstanjen: Each of the two interstates, providing easy-to-access for customers from several surrounding cities in southwestern Kentucky. This venue will be branded Marshall Yards Racing and Gaming, inspired by the railroad industry that shaped the surrounding communities. Marshall Yards will feature 250 HRMs and a music stage that will host a wide variety of live entertainment, attracting customers to this special property. Turning to Virginia, as expected, The Rose continued to show great progress during the third quarter. Rose Gaming revenues grew meaningfully, and we are rapidly building our customer database. We were also pleased to see continued growth in weekday gaming revenue, driven by increased visitation frequency through our data-driven marketing. As we approach the one-year anniversary of the opening, we are making excellent progress in laying the foundation for long-term growth at The Rose. In central Virginia, we completed the expansion project at our Richmond HRM venue.

Upscale entertainment venue features 175 games and other gaming related amenities, it's off to a fantastic start.

We currently have 4875 HRS deployed in Virginia.

<unk> has proven to be a great investment and business environment for us.

As the exclusive operator of Thoroughbred racing and <unk>, we are building strong relationships with key constituents in both the Horseracing and agricultural industries.

We will continue to pursue opportunities to expand our footprint and grow the number of <unk> in this dynamic market.

Turning to New Hampshire.

We completed the acquisition of a 90% interest in the Casino Salem project located at the mall at Rockingham Park in Salem, New Hampshire, near the Massachusetts border at exit two on Interstate 93.

We were also pleased to see continued growth in weekday Gaming revenue driven by increased visitation frequency through our data driven marketing.

This is a highly attractive market with approximately 800000 adults within a 20 mile radius and over $4 9 million people in the broader Boston MSA more than 100000 vehicles pass the property daily on 193.

As we approach the 1-year anniversary of the opening. We are making excellent progress in laying the foundation for long-term growth at the Rose.

Bill Carstanjen: We renovated an unused space to expand our gaming floor in May of this year and completed the remaining phase of this project in August, which added 450 incremental HRMs to the property. We also opened the Roseshire Gaming Parlor in Henrico County on September 29th, ahead of schedule and below budget. This upscale entertainment venue features 175 games and other gaming-related amenities. It's off to a fantastic start. We currently have 4,875 HRMs deployed in Virginia. Virginia has proven to be a great investment and business environment for us. As the exclusive operator of thoroughbred racing and HRMs, we are building strong relationships with key constituents in both the horse racing and agricultural industries. We will continue to pursue opportunities to expand our footprint and grow the number of HRMs in this dynamic market.

In Central Virginia, we completed the Expansion Project at our Richmond HRM venue.

Currently we are operating a temporary facility with 100 <unk> in 13 table games design work for the permanent venue is nearly complete and we expect the facility to have approximately 900, HRS 30 table games, three food and beverage venues a signature center bar and a large live entertainment venue.

We renovated an unused space to expand our gaming floor in May of this year and completed the remaining phase of this project in August, which added 450 incremental HRMs to the property.

We will seek local permits and approvals for the final design after which construction of the permanent venue will begin.

We also opened the rose. Sure gaming parlor in henriko County on September 29th, ahead of schedule, and Below budget. The upscale entertainment venue features 175 games, and other gaming related, amenities, it's off to a fantastic start.

We currently have 4875 hrms deployed in Virginia.

We will provide more details on timing on our next earnings call, but expect to open the facility in 2027.

Virginia has proven to be a great investment and business environment for us.

We plan to invest approximately $180 to $200 million to develop the state of the art gaming and entertainment destination.

As the exclusive operator of thoroughbred racing and hrms, we are building strong relationships with key constituents and both the horse racing and agricultural Industries.

In the near term, we anticipate continuing to operate our chasers poker room in Salem, and we've retained the rights to the associated HR M license, we will evaluate and pursue viable alternative uses for the second <unk> license in New Hampshire in the future.

We will continue to pursue opportunities to expand our footprint and grow the number of hrms in this Dynamic Market.

Bill Carstanjen: Turning to New Hampshire, we completed the acquisition of a 90% interest in the Casino Salem project, located at the mall at Rockingham Park in Salem, New Hampshire, near the Massachusetts border at exit 2 on Interstate 93. This is a highly attractive market, with approximately 800,000 adults within a 20-mile radius and over 4.9 million people in the broader Boston MSA. More than 100,000 vehicles pass the property daily on I-93. Currently, we are operating a temporary facility with 100 HRMs and 13 table games. Design work for the permanent venue is nearly complete, and we expect the facility to have approximately 900 HRMs, 30 table games, three food and beverage venues, a signature center bar, and a large live entertainment venue. We will seek local permits and approvals for the final design, after which construction of the permanent venue will begin.

Turning to New Hampshire.

Turning to exacta.

Our <unk> business has grown through the expansion of our <unk> operations in Kentucky, and Virginia as well as through our third party relationships in Kentucky, New Hampshire in Wyoming.

We completed the acquisition of a 90% interest in the casino Salem project located at the mall at Rockingham Park in Salem, New Hampshire, near the Massachusetts border at Exit 2 on Interstate 93.

Exactly technology is supporting our temporary facility in Salem, New Hampshire, and will be utilized in the permanent Salem casino facility when it opens.

This is a highly attractive Market with approximately 800,000 adults within a 20 mi radius and over 4.9% in the broader. Boston. MSA.

More than 100,000 vehicles passed the property daily on I-93.

We anticipate that a new third party ASRM property in Wichita, Kansas will open in December of this year with a significant portion of the gaming floor utilizing our technology.

Currently, we are operating a temporary facility with 100 HR, Ms and 13 table games.

We are excited to support the expansion of <unk> into this new market.

We've also made excellent progress towards gaining approval to deploy each RM based electronic table games, we are working to gain the necessary approvals from appropriate state authorities and expect to have more to share in the in the near term.

Design work for the permanent venue, is nearly complete. And we expect the facility to have a proximately 900, hrms, 30 table Games 3 food and beverage venues a signature Center bar and a large live entertainment venue.

Bill Carstanjen: We will provide more details on timing on our next earnings call, but expect to open the facility in 2027. We plan to invest approximately $180 to $200 million to develop this state-of-the-art gaming and entertainment destination. In the near term, we anticipate continuing to operate our Chasers Poker Room in Salem, and we have retained the rights to the associated HRM license. We will evaluate and pursue viable alternative uses for this second HRM license in New Hampshire in the future. Turning to Exacta, our Exacta business has grown through the expansion of our HRM operations in Kentucky and Virginia, as well as through our third-party relationships in Kentucky, New Hampshire, and Wyoming. Exacta Systems is supporting our temporary facility in Salem, New Hampshire, and will be utilized in the permanent Casino Salem facility when it opens.

We will seek local permits and approvals for the final design after which construction of the permanent venue. Will begin.

<unk> and our related exactly technology represent a high growth high margin investments that deliver strong returns for our shareholders. We will continue to focus on developing these businesses.

We will provide more details on timing on our next earnings call, but expect to open the facility in 2027.

We plan to invest approximately $180 to $200 million to develop a state-of-the-art gaming and entertainment destination.

In summary, third quarter was a very was very strong for us with record financial results.

We have a portfolio of unique and high performing assets that collectively provide multiple catalysts for growth and free cash flow generation for years to come.

In the near term, we anticipate continuing to operate our Chasers and Poker Room in Salem, and we have retained the rights to the associated HRM license. We will evaluate and pursue viable alternative uses for the second HRM license in New Hampshire in the future.

We believe the Kentucky Derby will deliver outstanding growth in 2026 and beyond as will our recent investments in HR and properties and the related exact technology. We will also continue to identify and execute high quality growth initiatives.

Turning to Exacta.

our exact the business has grown through the expansion of our HRM operations in Kentucky and Virginia, as well as through our third-party relationships in Kentucky, New Hampshire and Wyoming

Our strategic strategic decisions disciplined capital allocation strong balance sheet.

And diversified portfolio positions us to drive sustainable long term growth in adjusted EBITDA and free cash flow, we remain focused on delivering superior returns for our shareholders.

Exactly. Technology is supporting our temporary facility in Salem, New Hampshire and will be utilizing the permanent Salem Casino facility when it opens.

Bill Carstanjen: We anticipate that a new third-party HRM property in Wichita, Kansas, will open in December of this year, with a significant portion of the gaming floor utilizing our technology. We are excited to support the expansion of HRMs into this new market. We have also made excellent progress towards gaining approval to deploy HRM-based electronic table games. We are working to gain the necessary approvals from appropriate state authorities and expect to have more to share in the near term. HRMs and the related Exacta Systems technology represent a high-growth, high-margin investment that delivers strong returns for our shareholders. We will continue to focus on developing these businesses. In summary, the third quarter was very strong for us, with record financial results. We have a portfolio of unique and high-performing assets that collectively provide multiple catalysts for growth and free cash flow generation for years to come.

With that I'll turn the call over to Marcia and then we will take your questions Marcia.

Thanks, Phil and good morning, everyone I'll start with a few insights into our financial results and then provide an update on capital management.

We anticipate that a new third-party HRM property in Witchita. Kansas will open in December this year with a significant portion of the gaming floor, utilizing our technology. We are excited to support the expansion of hrm's into this new market.

First regarding third quarter results.

As Bill shared we delivered record net revenue and record adjusted EBITDA for the third quarter are alive and historical racing segment had record net revenue and record adjusted EBITDA for the third quarter.

We have also made excellent progress towards gaining approval to deploy HRM-based electronic cable games. We are working to gain the necessary approvals from appropriate state authorities and expect to have more to share in the near term.

Hrm's in the related. Exact technology represent a high growth, high margin investment that delivers strong returns for our shareholders.

This segment grew revenue by 21% and grew adjusted EBITDA by 25% compared to the prior year quarter. This is the 20 <unk> consecutive quarter of record growth in revenue and adjusted EBITDA compared to the prior quarter to this segment.

We will continue to focus on developing these businesses.

In summary.

Third quarter was a very was very strong for us with record Financial results.

All of our Kentucky HN properties contributed to the strong performance in Louisville, and Northern Kentucky teams contributed double digit growth in adjusted EBITDA compared to the prior year quarter.

Bill Carstanjen: We believe the Kentucky Derby will deliver outstanding growth in 2026 and beyond, as will our recent investments in HRM properties and the related Exacta Systems technology. We will also continue to identify and execute high-quality growth initiatives. Our strategic decisions, disciplined capital allocation, strong balance sheet, and diversified portfolio positions us to drive sustainable long-term growth and adjusted EBITDA and free cash flow. We remain focused on delivering superior returns for our shareholders. With that, I'll turn the call over to Marcia, and then we will take your questions. Marcia?

We have a portfolio of unique and high-performing assets, that collectively provide multiple catalysts for growth and free cash flow generation for years to come.

The technology.

This double digit growth was the result of strong execution on the top line as well as from a cost perspective, we are building a strong customer base, our owensboro, Kentucky, AGM venue and Western Kentucky, and our team at southwestern Kentucky is continuing to successfully penetrate the Nashville market.

We will also continue to identify and execute high-quality growth initiatives.

This will be the fifth consecutive year of strong growth for outgrowth HR and venue.

Our strategic decisions, disciplined capital allocation, strong balance sheet, and diversified portfolio positions us to drive sustainable long-term growth and adjusted EBITDA on free cash flow. We remain focused on delivering superior returns for our shareholders.

Marcia Dall: Thanks, Bill, and good morning, everyone. I'll start with a few insights into our financial results and then provide an update on capital management. First, regarding third-quarter results. As Bill shared, we delivered record net revenue and record adjusted EBITDA for the third quarter. Our live and historical racing segment had record net revenue and record adjusted EBITDA for the third quarter. This segment grew revenue by 21% and grew adjusted EBITDA by 25% compared to the prior year quarter. This is the 21st consecutive quarter of record growth in revenue and adjusted EBITDA compared to the prior year quarter for this segment. All of our Kentucky HRM properties contributed to this strong performance. Our Louisville and Northern Kentucky teams contributed double-digit growth in adjusted EBITDA compared to the prior year quarter.

Our margins for our Kentucky AGM properties were very strong for the third quarter.

Secondly, increasing over three points compared to the prior year quarter, and then continued growth and optimization of these properties.

With that, I'll turn the call over to Marsha and then we will take your questions Marcia. Thanks Bill and good morning everyone. I'll start with a few insights into our financial results and then provide an update on Capital Management,

In Virginia, we've always had a strong quarter with GTR per unit per day, increasing every month of the third quarter when adjusted for calendar differences between the months, our AGM venue enrichment AGM venue in Central Virginia has completed the expansion of the property, adding 450 incremental HR.

First regarding third quarter results, as Bill shared, we delivered record, net revenue and record adjusted Eva for the third quarter, our live and historical racing segment had record net, revenue and record adjusted Eva for the third quarter.

<unk>, the new <unk> and gaming floor expansion has been well received by our guests.

This segment grew Revenue by 21% and grew adjusted even by 25%, compared to the prior year quarter. This is the 21st consecutive quarter of record growth in revenue and adjusted ebita compared to the prior year quarter for this segment.

We are also very pleased with the initial results from our new Henrico County venue.

Our southern and Western Virginia result reflect the comparison to a strong third quarter in 2024 as well as the impact of increased competition for our event in Hampton properties.

Marcia Dall: This double-digit growth was the result of strong execution on the top line, as well as from a cost perspective. We are building a strong customer base for our Owensboro, Kentucky HRM venue in Western Kentucky, and our team in southwestern Kentucky is continuing to successfully penetrate the Nashville market. This will be the fifth consecutive year of strong growth for our Oak Grove HRM venue. Our margins for our Kentucky HRM properties were very strong for the third quarter, collectively increasing over three points compared to the prior year quarter from the continued growth and optimization of these properties. In Virginia, The Rose had a strong quarter, with GGR per unit per day increasing every month of the third quarter when adjusted for calendar differences between the months. Our Richmond HRM venue in central Virginia has completed the expansion of the property, adding 450 incremental HRMs.

All of our Kentucky HRM properties contributed to this strong performance. Our Louisville and Northern Kentucky teams contributed double-digit growth and adjusted IBA compared to the prior year's quarter.

Overall, we generated a combined 51% margin during the quarter, our same store in Virginia interim properties.

This double-digit growth was the result of strong execution on the top line as well as from a cost perspective.

This margin is best in class and we believe these margins are sustainable given the continued scaling of our northern and Central Virginia properties.

We are building a strong customer base for our Owensboro. Kentucky HRM venue in Western Kentucky and our team. In Southwestern Kentucky is continuing to successfully penetrate the Nashville Market

Turning to our wagering services and solutions segment. This segment delivered record third quarter adjusted EBITDA driven by the continued growth of our exact business.

This will be the 5th consecutive year of strong growth for our Oak Grove HRM venue.

Exactly benefits and the growth of our Kentucky, and Virginia, ACM properties as well as our third party customers.

Our margins, for our Kentucky. Hm properties were very strong for the third quarter, collectively, over 3 points compared to the prior year quarter from the continued growth and optimization of these properties.

And last regarding our gaming segment, our wholly owned regional gaming properties performed relatively well in the third quarter, excluding the impact of removing <unk> from our Louisiana operations, our adjusted EBITDA for our wholly owned gaming properties increased over $3 million and margins were up one one points compared to the prior year.

In Virginia, The Rose had a strong quarter with GTR per unit per day, increasing every month of the third quarter when adjusted for calendar differences between the months.

Marcia Dall: The new HRMs and gaming floor expansion has been well received by our guests. We are also very pleased with the initial results from our new Henrico County venue. Our southern and western Virginia results reflect the comparison to a strong third quarter in 2024, as well as the impact of increased competition for our Vinton and Hampton properties. Overall, we generated a combined 51% margin during the quarter for our same-store of Virginia HRM properties. This margin is best in class, and we believe these margins are sustainable given the continued scaling of our northern and central Virginia properties. Turning to our wagering services and solutions segment, this segment delivered record third-quarter adjusted EBITDA, driven by the continued growth of our Exacta business. Exacta benefits from the growth of our Kentucky and Virginia HRM properties, as well as our third-party customers.

Our HRM venue our Richmond, HRM venue in Central. Virginia has completed the expansion of the property adding 450 incremental, hrms

Quarter.

These increases resulted both topline growth and effective cost management.

The new hrms and gaming floor expansion, has been well received by our guests.

Regional gaming consumer behavior was relatively consistent on a sequential basis we.

We are also very pleased with the initial results from our new onryo County venue.

We saw continued strength from our rated players with increased visitation and spend per trip from our highest end rated players in our database. We also saw unrated player trends improved compared to the prior year quarter and on a sequential basis.

Our Southern and Western Virginia results reflect the comparison to a strong third quarter in 2024, as well as the impact of increased competition for our Venton in Hampton properties.

Turning to capital management, we generated $166 million or $2 34 per share and free cash flow in the third quarter, primarily from the <unk> cash flow generated from our businesses.

Overall, we generated a combined 51% margin during the quarter for our same store of Virginia, HRM properties.

This margin is best in class and we believe these margins are sustainable given the continued scaling of our Northern and Central Virginia properties.

Free cash flow per share is up 13% from the prior year quarter as we continue to realize the benefit of recent capital investments and the impact of share repurchases.

Turning to our wagering services and solutions, segment. This segment delivered records, third quarter adjusted ibida driven by the continued growth of our exact business.

Our free cash flow yield based on our trailing 12 months results is approximately 10%.

Exactive benefits from the growth over Kentucky and Virginia. Hm properties as well as our third-party customers.

Marcia Dall: Regarding our gaming segment, our wholly owned regional gaming properties performed relatively well in the third quarter. Excluding the impact of removing HRMs from our Louisiana operations, our adjusted EBITDA for our wholly owned gaming properties increased over $3 million, and margins were up 1.1 points compared to the prior year quarter. These increases resulted in both top-line growth and effective cost management. Regional gaming consumer behavior was relatively consistent on a sequential basis. We saw continued strength from our rated players, with increased visitation and spend per trip from our highest-end rated players in our database. We also saw unrated player trends improve compared to the prior year quarter and on a sequential basis. Turning to capital management, we generated $166 million, or $2.34 per share of free cash flow in the third quarter, primarily from the strong cash flow generated from our businesses.

We spent $53 million of maintenance capital that the first nine months of the year.

We now expect to spend $75 million to $85 million in maintenance capital in 2025.

And last regarding our gaming segment, our wholly owned retail gaming properties performed relatively well, in the third quarter.

We spent $172 million and project capital through the first nine months of the year.

We now expect to spend $200 million to $240 million on project capital in 2025.

Excluding the impact of removing hrms from our Louisiana operations. Our adjusted ibida for a wholly owned gaming, properties increased over 3 million dollars and margins were up 1.1 points compared to the prior year quarter.

For 2026, we are now projecting our project capital to be between 160 and $200 million.

These increases result of both Topline growth and effective cost management.

Regional gaming consumer Behavior, was relatively consistent on a sequential basis.

This reflects the 2026 expected project capital for the mansion initially suites and victory run projects for Churchill Downs Racetrack and Casino Salem project in New Hampshire that Bill discussed.

We saw a continued strength from our rated players with increased visitation and spend per trip from our highest end rated players in our database.

Turning to share repurchases, we repurchased over $50 million of our stock in the third quarter under our share repurchase program.

We also saw unrated player Trends, improved compared to the prior year quarter and on a sequential basis.

Regarding our dividend our board of directors approved a 7% increase in our dividend, which will be paid out on January six 2026th to shareholders of record on December five 2025.

Marcia Dall: Free cash flow per share is up 13% from the prior year quarter, as we continue to realize the benefit of recent capital investments and the impact of share repurchases. Our free cash flow yield, based on our trailing 12 months' results, is approximately 10%. We spent $53 million in maintenance capital through the first nine months of the year. We now expect to spend $75 to $85 million in maintenance capital in 2025. We spent $172 million in project capital through the first nine months of the year. We now expect to spend $200 to $240 million on project capital in 2025. For 2026, we are now projecting our project capital to be between $160 and $200 million.

Turning to Capital Management. We generated 166 million or $2.34 per share of free cash flow in the third quarter primarily from the strong cash flow generated from our businesses.

This is the 15th consecutive year of increased dividends per share for our company.

Free cash flow per share is up, 13% from the prior year quarter, as we continue to realize the benefit of recent Capital Investments and the impact of share repurchases.

As a reminder, because of the federal tax Bill that was signed on July 4th we will see an improvement in our free cash flow from favorable cash taxes.

Our free cash flow yield based on our trailing 12 months results is approximately 10%.

The new tax provisions include making the 21% business tax rate and a 100% bonus depreciation rules permanent.

We spent 53 million on maintenance Capital through the first 9 months of the year.

In 2025.

Our federal tax Phil also Reinstates, a 30% of EBITDA based interest deduction limitation.

We sent 172 million in Project Capital through the first 9 months of the year.

The additional interest deductions combined with 100% bonus depreciation will reduce our cash taxes and increase our free cash flow this year and in future years.

We now expect to spend 200 to 240 million on Project capital in 2025.

We estimate that the impact of lower cash tax payments will be $50 million to $60 million in both 2025 and 2026.

Marcia Dall: This reflects the 2026 expected project capital for the mansion, finish line suites, and Victory Run projects for Churchill Downs Racetrack and the Casino Salem project in New Hampshire that Bill discussed. Turning to share repurchases, we repurchased over $50 million of our stock in the third quarter under our share repurchase program. Regarding our dividend, our board of directors approved a 7% increase in our dividend, which will be paid out on January 6, 2026, to shareholders of record on December 5, 2025. This is the 15th consecutive year of increased dividends per share for our company. As a reminder, because of the federal tax bill that was signed on July 4, we will see an improvement in our free cash flow from favorable cash taxes. The new tax provisions include making the 21% business tax rate and 100% bonus depreciation rule permanent.

For 2026. We are now projecting our project Capital to be between 160 and 200 million.

At the end of third quarter, our bank Covenant net leverage was four one times.

We expect our bank covenant leverage to remain at this level at the end of the year and then we will be below four times in 2026.

This reflects the 2026 expected project capital for the Mansion. The Finish Line Suites and Victory Run projects for the church announced, Racetrack and the casino Salem project in New Hampshire that Bill discussed.

We are proud of the record performance our team achieved in third quarter, we are well positioned for sustainable long term growth supported by our unique portfolio of high performing assets disciplined capital management and our strong balance sheet, we remain committed to creating long term shareholder value.

Turning to share repurchases, we repurchased over $50 million of our stock in the third quarter under our share repurchase program.

Regarding our dividend, our Board of Directors approved a 7% increase in our dividend, which will be paid out on January 6, 2026, to shareholders of record on December 5, 2025.

With that I'll turn the call back over to Bill So that he can open the call for questions Bill. Thank.

This is a 15th consecutive year of increased dividends per share for our company.

Thank you Marcia.

Andrew I think we're ready to take take questions.

As a reminder, because of the federal tax bill that was signed on July 4th, we will see an improvement in our free cash flow from favorable cash taxes.

Certainly to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.

Marcia Dall: The federal tax bill also reinstates a 30% of EBITDA-based interest deduction limitation. The additional interest deductions, combined with 100% bonus depreciation, will reduce our cash taxes and increase our free cash flow this year and in future years. We estimate that the impact of lower cash tax payments will be $50 to $60 million in both 2025 and 2026. At the end of the third quarter, our bank covenant net leverage was 4.1 times. We expect our bank covenant net leverage to remain at this level at the end of the year, and then we'll be below four times in 2026. We are proud of the record performance our team achieved in the third quarter. We are well positioned for sustainable long-term growth, supported by our unique portfolio of high-performing assets, disciplined capital management, and our strong balance sheet. We remain committed to creating long-term shareholder value.

The new tax Provisions include making the 21% business tax rate and 100% bonus depreciation rule permanent.

One moment, while we compile the Q&A roster.

The federal tax bill also reinstates a 30% EBITDA-based interest deduction limitation.

And our first question comes from the line of Barry Jonas with true Securities.

Hey, guys. Good morning, congrats on the quarter on the announcement of victory run.

The additional interest deductions combined with 100% bonus depreciation will reduce our cash taxes and increase our free cash flow this year. And in future years,

Can you talk more about your ROI targets for victory run.

We estimate that the impact of lower cash, tax payments will be 50 to 60 million in both 2025 and 2026.

And when you think youll hit them and maybe if there are any lessons learned you can apply from the starting gate to $1 billion introduction at Derby $1 51. Thank you.

At the end of third quarter, our bank Covenant, net leverage was 4.1 times.

Sure happy to do that.

We expect our bank, Covenant and leverage to remain at this level at the end of the year. And then we'll be below 4 times in 2026.

Barry and good morning, So we targeted 20% Unlevered IRR.

We are proud of the record performance or team achieved in third quarter.

That's what we shoot for we shoot for that.

Really focused on year three it takes it takes time in this business to introduce the new asset get trial, and then get word of mouth. So it's a three year.

We are well positioned for sustainable long-term growth supported by our unique. Portfolio of high-performing assets, discipline Capital Management and our strong balance sheet.

Marcia Dall: With that, I'll turn the call back over to Bill so that he can open the call for questions. Bill?

We remain committed to creating long-term shareholder value.

<unk>.

A three year window that we focus on.

Bill Carstanjen: Thank you, Marcia. Andrew, I think we're ready to take questions.

With that, I'll turn the call back over to bill so that he can open the call for questions bill.

Thank you.

And our next question comes from the line of David Katz with Jefferies.

Operator: Certainly. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. One moment while we compile the Q&A roster. Our first question comes from the line of Barry Jonas with Truist Securities.

Thank you, Marcia, Andrew. I think we're ready to take. Um, take questions.

Certainly.

Hi, Good morning, everybody. Thanks for taking my question I appreciate it.

To ask a question. Please press star 1, 1 on your telephone, and wait for your name to be announced.

I wanted to ask about <unk>.

So with your question, please press star 1 1 again.

From not putting words anybody's mouth from my own work my sense is that Kentucky might be closer and then some of the other markets that you have but generally speaking.

1 moment while we compile the Q&A roster.

Have you done any sort of penciling Marcia and team around what the.

Our first question comes from the line of Barry Jones with truist Security's.

[Analyst]: Hey, guys. Good morning. Congrats on the quarter and the announcement of Victory Run! Can you talk more about your ROI targets for Victory Run, how and when you think you'll hit them, and maybe if there are any lessons learned you can apply from the Starting Gate Pavilion introduction at Derby 151? Thank you.

Prospective opportunity could be whether it's in Kentucky.

In any of the other markets in terms of lift maybe based on learnings from other markets that have gone.

Into <unk> before and after thanks.

Hey guys, uh, good morning, uh, congrats on the quarter on the amounts of Victory Run. Uh, C, can you talk more about your Roi targets for Victory? Run how. And when you think you'll hit them and maybe if there are any Lessons Learned you can apply from The Starting Gate Pavilion introduction uh at Derby 151. Thank you.

Bill Carstanjen: Sure, happy to do that. Barry, and good morning. We target a 20% unlevered IRR. That's what we shoot for. We shoot for that, really focused on year three. It takes time in this business to introduce the new asset, get trial, and then get word of mouth. It's a three-year window that we focus on.

Thanks, David Good morning.

So.

<unk> electronic table games.

That's an important frontier for us with HRS or facilities.

Uh for happy to do that. Uh Barry and good morning. So we we target a 20% unlevered irr. That that's what we shoot for we shoot for that um really focused on year 3, it takes

Cros.

Virginia, Kentucky New.

New Hampshire they.

They don't have the benefit of offering table games, which is which is.

It takes, uh, time in this business to introduce the new asset, get trial and then get word of mouth. So it's a 3 year.

Something of course are a class of customers really want so.

Um, a 3 year window that we focus on.

Electronic table games.

Operator: Thank you. Our next question comes from the line of David Katz with Jefferies.

Thank you.

And states like Virginia, and Kentucky Rep.

Our next question comes from the line of David Katz with Jeffries.

Ah represents an important opportunity for us and it's a technology journey and it's also a regulatory journey.

[Analyst]: Hi, good morning, everybody. Thanks for taking my question. I appreciate it. I wanted to ask about ETGs. From my own work, my sense is that Kentucky might be closer in than some of the other markets that you have. Generally speaking, have you done any sort of penciling, Marcia and team, around what the prospective opportunity could be, whether it's in Kentucky or in any of the other markets in terms of lift, maybe based on learnings from other markets that have gone into ETGs before and after? Thanks.

It's one we have been focused on for a while so I don't have any news to announce today and I hinted at that in our comments, but it's it's a material focus it's something we think can be really important.

It.

Levels us up in terms of having a comparable suite of offerings for customers compared to traditional class III facilities. So I can't give you wouldn't can't responsibly give you predictions on what it will do and it also depends on.

The regulatory framework, that's finally approved but I can assure you that we take it extremely seriously and think it's an important opportunity for us and we're going to focus on it until we can get it done.

Hi, good morning everybody. Thanks for taking my question, I appreciate it. Um, I I wanted to ask about EtG, um, you know, from not not putting words in any of his mouth from my own work, my senses that you know, Kentucky might be closer in than some of the other markets that you have. But generally speaking, um, you know, have you done any sort of penciling, you know, Marcia and team around, you know what, the prospective opportunity you know could be whether it's in Kentucky you know or in any of the other markets in terms of lift, you know maybe based on learning from other markets that have gone, you know, uh into EtG before and after thanks.

Bill Carstanjen: Thanks, David. Good morning. ETGs, electronic table games, that's an important frontier for us with HRMs. Our facilities across Virginia, Kentucky, New Hampshire, they don't have the benefit of offering table games, which is something, of course, a class of customers really want. Electronic table games in states like Virginia and Kentucky represent an important opportunity for us, and it's a technology journey, and it's also a regulatory journey, and it's one we have been focused on for a while. I don't have any news to announce today, and I hinted at that in our comments, but it's a material focus. It's something we think can be really important, and it levels us up in terms of having a comparable suite of offerings for customers compared to traditional class three facilities.

Thanks David. Good morning.

so,

Thank you.

Next question comes from the line of Chad Beynon with Macquarie.

Hi, Good morning, Thanks for taking my question and congrats on the announcement on.

Hrms our facilities across.

Victory, Ron I wanted to ask about just capital allocation, so year to date and including the dividend. It looks like about $400 million will be spent on share repo and the dividend so with the updated capex for the next couple of years.

Virginia Kentucky.

New Hampshire. Uh, they don't have the benefit of offering table games, which is which is um, something of course, a class of customers really want. So, uh, electronic table games and

Marcia and Tim how are you thinking about leverage and the balance between share repurchase and.

and States like Virginia and

The money that will be spent on the projects. Thank you.

Thanks, Chad.

<unk>.

As you know, we're very disciplined in our capital management, we have made a commitment to have our leverage below four times next.

Next year, and we will execute that through that that being said, we are very thoughtful about on <unk>.

And strategic about buying shares back when it's appropriate and we will continue to balance we have a very good forecasting model that allows us to balance our capital investments.

Bill Carstanjen: I can't give you, and can't responsibly give you predictions on what it'll do, and it also depends on the regulatory framework that's finally approved. I can assure you that we take it extremely seriously and think it's an important opportunity for us, and we're going to focus on it until we can get it done.

With the dividend that we grow at 7% per year, along with other share repurchases throughout the year.

And Kentucky, uh, represents an important opportunity for us. And it's it's a technology uh, journey. And it's also a regulatory journey and it's it's 1. We are have been focused on for a while. So I don't have any news to announce today and I I hinted at that in our comments but it's it's it's a material Focus. It's something we think can be really important and it it, uh, levels us up in terms of having a comparable Suite of of of offerings for customers compared to traditional class 3 facilities. So I can't give you and wouldn't can't responsibly give you predictions on what it'll do. And it also depends on um the regulatory framework. That's finally approved. But I can assure you that we take it extremely seriously and think it's an important opportunity for us and we're going to focus on it until we can get it done.

Thank you.

Operator: Thank you. Our next question comes from the line of Chad Bynon with Macquarie.

And our next question comes from the line of Daniel Guglielmo with capital one Securities.

Thank you.

[Analyst]: Hi, good morning. Thanks for taking my question, and congrats on the announcement on Victory Run. I wanted to ask about just capital allocation. Year to date, and including the dividend, it looks like about $400 million will be spent on share repo and the dividend. With the updated CapEx for the next couple of years, Marcia and team, how are you thinking about leverage and the balance between share repurchase and the money that'll be spent on the projects? Thank you.

Our next question comes from the line of Chad Beynon with McQueary.

<unk>.

Hi, everyone. Thank you for taking my question, the brick and mortar property portfolio as wholly owned across both alive and historical and gaming segments outside of not having to pay rent what are some of the incremental mid to long term benefits of owning owning the property outright and then do you think the market is giving you.

Credit for the full ownership piece right now.

Thanks for the question Dan So.

Our philosophy.

Hi, good morning. Thanks for taking my question, and congrats on the announcement on. Um, Victory Run wanted to ask about, uh, just Capital allocation. So year to date and including the dividend, it looks like about 400 million dollars. Uh, will be spent on chair repo and the dividend. Um, so with the updated, uh, capex, for the next couple years, uh, Marsha and team, how are you thinking about leverage and the balance between, uh, share repurchase and, uh, the money that that will be spent on the projects? Thank you.

Marcia Dall: Thanks, Chad. Good morning. As you know, we're very disciplined in our capital management. We have made a commitment to have our leverage come below 4 times next year, and we will execute that through that. That being said, we are very thoughtful about, and strategic about buying shares back when it's appropriate, and we will continue to balance. We have a very good forecasting model that allows us to balance our capital investments with the dividend that we grow at 7% per year, along with other share repurchases throughout the year.

For our gaming assets has been to own the real estate other companies have chosen other other philosophies and and they can explain their philosophies for us we've been focused on.

Growing these businesses.

Stabilizing these businesses and.

And running them as best as we can so owning your own real estate gives you a.

Our sense of stability and.

And a sense of predictability, that's made sense for our company but.

Thanks Chad. Um, good morning, as you know, we're very disciplined in our Capital Management, we have made a commitment to have our Leverage come below 4 times, uh, next year, and we will execute that through that. That being said we are very thoughtful about, um, and strategic about buying shares back when it's appropriate and we will continue to balance. We have a very good forecasting model, that allows us to balance our Capital Investments um with um the dividend uh that we grow at 7% per year along with other share repurchases throughout the year.

Operator: Thank you. Our next question comes from the line of Daniel Guglielmo with Capital One Securities.

But the philosophies around why different companies do it the way they do it is up for their other companies to explain for US I don't think we get credit for it fully in our in our stock it's been occasionally.

Thank you.

In our next question, comes from the line of Daniel googly Elmo with capital 1.

[Analyst]: Hi, everyone. Thank you for taking my question. The brick-and-mortar property portfolio is wholly owned across both the live and historical and gaming segments. Outside of not having to pay rent, what are some of the incremental mid-to-long-term benefits of owning the properties outright? Do you think the market is giving you enough credit for the full ownership piece right now?

Source of discussion on these calls and in the source of discussion with other investors, but fundamentally we structured a very stable consistently performing.

Well executed strategy around regional gaming in particular, and hopefully the market recognizes that because our track record is clear and our future is also fairly predictable and clear as well.

Hi everyone. Thank you for taking my question, the, the brick and mortar property portfolio is wholly owned across. Both the live and historical and gaming segments outside of not having to pay rent. What are some of the incremental mid to long-term benefits of owning owning the properties outright? And then do you think the market is giving you enough credit for the full ownership piece right now?

Bill Carstanjen: Thanks for the question, Dan. Our philosophy for our gaming assets has been to own the real estate. Other companies have chosen other philosophies, and they can explain their philosophies. For us, we've been focused on growing these businesses, stabilizing these businesses, and running them as best as we can. Owning your own real estate gives you a sense of stability and a sense of predictability that's made sense for our company. The philosophies around why different companies do it the way they do it is up for their other companies to explain. For us, I don't think we get credit for it fully in our stock. It's been occasionally a source of discussion on these calls and a source of discussion with other investors. Fundamentally, we've structured a very stable, consistently performing, well-executed strategy around regional gaming in particular.

Thank you.

Thanks for the question, Dan. So um,

And our next question comes from the line of Dan <unk> with JP Morgan.

Our philosophy.

Hey, good morning, everyone. Thanks for taking my question.

Bill Marshall I was wondering kind of broad strokes.

Could you just touch on the M&A environment here.

We've seen some transactions lately you guys, obviously participated with casino Salem.

For our our, our gaming assets has been to to own the real real estate. Other companies have chosen another other philosophies and, uh, and they can explain their Phil philosophies for us. We've been focused on, um,

Uh, growing these businesses.

I mean, as you kind of look broadly and think about kind of inbound and outbound as well how would you describe the kind of level of <unk>.

Activity or interest.

It just seems like theres been a little bit of a pickup externally. Thanks.

Uh, stabilizing these businesses. And, um, and, and running them as as as best as, as we can. So owning your own real estate gives you a, a, a a sense of stability. And, um,

Yes, certainly.

We've seen that pick up there've been a couple of announcements in the brick and mortar space recently over the last month, or so and even though over the last week and that's always encouraging now those were.

Those are Opco propco is as I think about the ones that come to mind and we are of course whole coast. So.

So I think it's nice to see.

Some clarity in the market so the investor community in the markets in general and get a sense of the value of properties and.

Bill Carstanjen: Hopefully, the market recognizes that because our track record is clear and our future is also fairly predictable and clear as well.

We watch those market closely and.

<unk>.

As a company in the space <unk> seen over the long term, we're both an opportunistic acquirer and we're also a seller win win opportunities afford themselves. So we're always a flexible participant in the market and we like to pay attention to the trends and the activities. We see so everything is relevant and interesting to us.

Um, and a sense of predictability that's made sense for our company, uh, but the philosophies around why different companies do it. The way they do it is is up for their other companies to explain for us. I don't think we get credit for it. Fully in our, in our stock, it's been occasionally uh uh, a source of discussion on these calls and the source of discussion with other investors. But fundamentally, we've we've structured a very stable consistently performing, uh, well-executed strategy around Regional gaming and in particular. And um, hopefully the market recognizes that because our track record is clear and uh, our future is is also fairly predictable and clear as well.

Operator: Thank you. Our next question comes from the line of Dan Politzer with JP Morgan.

Thank you.

In our next question, we come from the line of Dan Pollitzer with JP Morgan.

[Analyst]: Hey, good morning, everyone. Thanks for taking my question. Bill, Marcia, I was wondering, kind of broad strokes, if you could just touch on the M&A environment here. I mean, obviously, we've seen some transactions lately. You guys obviously participated with Casino Salem. As you look broadly and think about inbounds and outbounds, how would you describe the level of activity or interest? It just seems like there's been a little bit of a pickup externally. Thanks.

But I would say in general you are seeing a pickup in activity over over the very recent <unk>.

<unk> term.

Thank you.

And our next question comes from the line of been shaken with Mizuho.

Hey, good morning, Thanks for taking my question, maybe just a follow up there.

Obviously in New Hampshire, you acquired 9% interest in Salem.

Bill Carstanjen: Yeah, certainly, we've seen that pickup. There have been a couple of announcements in the brick-and-mortar space recently over the last month or so and even over the last week. That's always encouraging. Now, those were Opco/PropCos, as I think about the ones that come to mind, and we're, of course, whole cos. I think it's nice to see some clarity in the market so the investor community and the markets in general get a sense of the value of properties. We watch those markets closely. You know, as a company in the space, you've seen over the long term, we're both an opportunistic acquirer and we're also a seller when opportunities afford themselves. We're always a flexible participant in the market, and we like to pay attention to the trends and the activities we see. Everything is relevant and interesting to us.

And and think about kind of inbounds and outbounds, what, how would you describe the kind of level of of of of activity or interest? Um, it just seems like there's been a little bit of a pickup. Uh, externally. Thanks.

Talk to us about the M&A environment, specifically in this region is this scenario, we could see more activity or was this more of a one off for some reason.

Well talking specifically about New Hampshire, we entered new Hampshire, originally through our chasers license in Salem.

Yeah certainly uh we we've seen that pick up there have been a couple of announcements in the brick and mortar space uh recently over the last month or so and even over the last week and and that's always encouraging. Now, those were um,

So we believe very strongly in that market in a second license was created so the parties came together and that was.

Those were opco proposes is, is, is I think about the, the ones that come to mind and we're, of course, whole Coast. So so I I think it's nice to see. Um,

An opportunity to just made a lot of sense for us based on the work and our understanding of that market generally in the state of New Hampshire, I liked the model and New Hampshire with <unk>.

Uh, some clarity in the market, so the investor community and the markets in general get a sense of the value of properties. And, uh, we watch those markets closely and, you know, as a...

<unk> and I certainly like.

I like the demographics there.

But.

Theres not a philosophy per se for that particular region. We look at every region. We look at demographics. We look at we look at pricing we look at the technology. That's at play and we make a determination based on that but new Hampshire is a story of us investing in the sale of market and then seeing an opportunity to to double.

Bill Carstanjen: I would say in general, you are seeing a pickup in activity over the very recent term.

As a company in the space, you've seen over the long term. We're we're both an opportunistic acquirer, and we're also a seller when when opportunities afford themselves. So we're always a flexible participant in the market, and we like, to pay attention to the trends and the activities. We see. So everything is relevant and interesting to us. Um, and but I would say in general, you are seeing a, a pickup in activity, over over the very recent, uh, recent term.

Operator: Thank you. Our next question comes from the line of Ben Shakin with Mizuho.

Now on a market that we really believe is going to be a long term.

Thank you.

Positive positive development for us.

And our next question comes from the line of been shaken with meizuo.

[Analyst]: Hey, good morning. Thanks for taking my question. Maybe just a follow-up there. Obviously, in New Hampshire, you acquired 90% interest in Casino Salem. Talk to us about the M&A environment specifically in this region. Is this an area we could see more activity, or is this more of a one-off for some reason?

Thank you.

Hey, good morning. Thanks for taking my question. Um, maybe just to follow up there.

And our next question comes from the line of Jeff substantial with Stifel.

Hey, good morning, everyone. Thanks for taking our question I wanted to ask a bit more of a high level strategic question on the <unk>.

Obviously, in New Hampshire, you acquired 90% interest in Salem. Uh talk to us about the m&a, environment, specifically in this region is this an area? We can see more activity, or is this more of a 1-off for some reason?

Bill Carstanjen: Talking specifically about New Hampshire, we entered New Hampshire originally through our Chasers license in Salem. We believe very strongly in that market, and a second license was created. The parties came together, and that was an opportunity that just made a lot of sense for us based on the work and our understanding of that market. Generally, in the state of New Hampshire, I like the model in New Hampshire with HRMs, and I certainly like the demographics there. There's not a philosophy per se for that particular region. We look at every region. We look at demographics. We look at pricing. We look at the technology that's at play, and we make a determination based on that.

Maybe bill just as you look at the track assets built up currently I'm curious just to get your updated thoughts on what inning. You think you are in with respect to some of these call. It more substantial projects such as the first turn or the victory Ron.

A corollary to that do you think the current product is diversified enough where it covers the full consumer lifecycle or is there still some opportunity left to bridge jumps in ticket price. So just going from infield premium ceded things like that thanks.

Well talking specifically about New Hampshire, we entered New Hampshire originally through. Our, our Chasers license in Salem. Uh, so we believe very strongly in that market. And the second license was created. So the parties came together and and that was uh uh uh, an opportunity to just made a lot of sense for us, based on the work and our understanding of of that market generally in the state of New Hampshire. I I like the model in New Hampshire with with hrms and I certainly like, uh,

Well thanks for that question, Jeff I like the baseball analogy, it's World series time, So that's a very timely analogy.

So.

In that theme what inning are we in.

Bill Carstanjen: New Hampshire is a story of us investing in the Salem market and then seeing an opportunity to double down on a market that we really believe is going to be a long-term positive development for us.

When it comes the Derby is a very old event, it's been around for 151 years, but I think we're in the I think we are in the third inning I think there is a.

So much opportunity.

With that it's a very dynamic evolving events as as is.

You know, I I like the demographics there, um, but I there's not a philosophy per se for that particular region. We look at every region. We look at demographics, we look at we look at pricing, we look at the technology that's at play and we make a determination based on that. But New Hampshire is a story of us investing in the Salem market and then seeing an opportunity to to double down on a market that we really believe is going to be a long-term uh, positive positive development for us.

Operator: Thank you. Our next question comes from the line of Jeff Stanchel with Stifel.

We develop it and as the country changes and as we see themes moving towards experiential.

Thank you.

[Analyst]: Hey, good morning, everyone. Thanks for taking our question. I wanted to ask a bit more of a high-level strategic question on the Derby. Bill, just as you look at the track as it's built up currently, I'm curious just to get your updated thoughts on what inning you think you're in with respect to some of these, you know, call it more substantial projects such as the first turn or the Victory Run. As a corollary to that, do you think the current product is diversified enough where it covers the full consumer lifecycle, or is there still some opportunity left to bridge jumps in ticket price, such as going from infield to premium seated, things like that? Thanks.

Customer spend.

Our next question comes from the line of Jeff. Stansel with stifel

<unk>.

So I think the future is very bright for the Derby and Theres a lot more to come.

It's important to have a a breath of offering for the Derby and a lot of a lot of that is still yet to come I think when we look at victory run that as a very very very attractive part of the track. It's just past the finish line has a great view of the stretch as the horses sort of Thunder towards the finish line and it was a.

Hey, good morning everyone. Thanks for taking our question. I wanted to ask a bit more of a high level strategic question on the Derby bill. Just as, as you look at the track as it's built up, currently, I'm curious just to get your updated thoughts on what inning you think you're in.

It has seats there but.

They are tired.

It's a tired old section that Hasnt seen capital investment in a long time. So it was it was a perfect opportunity to to.

With respect to some of these, you call it more substantial projects such as the first term or the Victory Run. And that's like that's a corollary to that. Do you think the current product is Diversified enough, where it covers the full consumer life cycle? Or is there still some opportunity left to to bridge jumps and ticket price such as going from infield to the premium seated things like that? Thanks.

Bill Carstanjen: Thank you for that question, Jeff. I like the baseball analogy. It's World Series time, so that's a very timely analogy. In that theme, what inning are we in? When it comes, the Derby is a very old event. It's been around for 151 years, but I think we're in the third inning. I think there's so much opportunity with that. It's a very dynamic, evolving event as we develop it and as the country changes and as we see themes moving towards experiential customer spend. I think the future is very bright for the Derby, and there's a lot more to come. I think it's important to have a breadth of offering for the Derby, and a lot of that is still yet to come. When we look at Victory Run, that's a very, very, very attractive part of the track. It's just past the finish line.

Really upgrade that to meet meet the modern expectations of our consumers and we get that feedback from them every single year on what Theyre looking for so they want more suites they want more covered.

Well, thanks for that question. Jeff. I I like the baseball analogy. It's World Series time, so that that's a very timely analogy. Um,

so, uh,

In that theme. What inning are we in?

Boxes.

They want higher amenities, that's what they're looking for and this is an area, where we can do that and there are other areas around the track where that also is.

As in the cards for the future. So I think youll see us be active.

On a small to medium scale constantly but the next big project is the one we talked about today, which is victory run and we need to get that done and get that digested before we talk about some of the other big projects that come next I would say about victory run it increases the capacity of the track.

Uh when it comes to the derbies are very old event. It's been around for 151 years but I I think we're in the, I think we're in the third inning, I think there's a uh, so much opportunity uh, with that. It's, it's a very Dynamic evolving event as as, uh, as we develop it and as the country changes and as we see themes, moving towards experiential, uh, uh

Uh, customer spend. So, um,

Uh, so I I think the future is very bright uh, for the Derby and and there's a lot more to come.

I think, um,

Seating capacity by about 2%, it's a 20% increase in that section and that's a really important section.

But we're always very careful about layering in.

Bill Carstanjen: It has a great view of the stretch as the horses sort of thunder towards the finish line. It has seats there, but they're tired. It's a tired old section that hasn't seen capital investment in a long time. It was a perfect opportunity to really upgrade that and meet the modern expectations of our consumers. We get that feedback from them every single year on what they're looking for. They want more suites. They want more covered boxes. They want higher amenities. That's what they're looking for, and this is an area where we can do that. There are other areas around the track where that also is in the cards for the future.

Capacity, because it's not really about the number of seats, it's about the quality of experience and the segmentation of the experiences that we offer and so this fits in with.

Our plan and our philosophy that you've seen us execute over time and it's the right next step.

Thank you.

And our next question comes from the line of Brent <unk> with Barclays.

Good morning, everybody. Thanks for taking my question. So I wanted to ask about the Roes, obviously, a nice ramp youre seeing there I think you are now within your long term.

Win per unit per day targets and so I guess the question would be how to think about the margin ramp from here and into next year.

Bill Carstanjen: I think you'll see us be active on a small to medium scale constantly, but the next big project is the one we talked about today, which is Victory Run, and we need to get that done and get that digested before we talk about some of the other big projects that come next. I would say about Victory Run, it increases the capacity of the track, seating capacity by about 2%. It's a 20% increase in that section, and that's a really important section. We're always very careful about layering in capacity because it's not really about the number of seats. It's about the quality of experience and the segmentation of the experiences that we offer. This fits in with a plan and a philosophy that you've seen us execute over time, and it's the right next step.

And.

I apologize for the near term question, but any sort of concerns around the sort of government shutdown that's going on in the D C and the like that would be helpful too as well. Thank you.

Investment in a long time. So it was a, it was a perfect opportunity to to Really upgrade that and meet meet the modern expectations of of our consumers. And we get that feedback from them every single year on what they're looking for. So they want more Suites. They want more covered, uh, boxes. Uh, they want higher amenities, that's what they're looking for. And this is an area where where we can do that and there are other areas around the track where that uh also uh is in the cards for the future. So I think you'll see us be active. Um,

Brian Thanks for the question.

Yes, we're thrilled with.

The progression of the Roes, we still think we have a long way to go.

And we think as as we progress and as our win per unit goes up.

You should see improving margins right now we're still heavily investing in marketing as we try to drive awareness in a very big large complex MSA.

Okay.

You mentioned also.

What's going on in that market.

On on a, a small to medium scale constantly. But the next big project is the 1. We talked about today, which is Victory Run, and we need to get that done and get that digested. Before we talk about some of the other big projects that that come next, I would say about Victory. Run it increases the capacity of the track seating capacity by about 2%. It's a 20% increase in that section. That's a really important section. Uh, but we're always very careful about layering in uh, capacity because it's not really about the number of seats. It's about the quality of experience and the segmentation of the experiences that we offer. And so this fits in with uh, uh, a plan and a philosophy that you've seen us execute over time. And it's the right Next Step.

We don't really.

Operator: Thank you. Our next question comes from the line of Brant Montour with Barclays.

So your field in a way that we can tell the impact of some of the government shutdown discussions or whatnot, it's such a huge area of $6 5 million people and.

Thank you.

And our next question comes from the line of Brant Montour with Barclays.

[Analyst]: Good morning, everybody. Thanks for taking my question. I wanted to ask about The Rose, obviously a nice ramp you're seeing there. I think you're now within your long-term win per unit per day targets. I guess the question would be, you know, how to think about the margin ramp from here and into next year. I apologize for the near-term question, but any sort of concerns around the sort of government shutdown that's going on in D.C. and the like, that would be helpful too as well. Thank you.

We have not even been open in a year. So we're just growing through it so I think it's such a.

A huge market with great demographics, both from a population level from the income level that we're just in a process of growing into our into our size. So some of the noise going on its just not something that we can discern.

As we currently grow so yes, we're really happy with how Thats progressing we're really happy with the quarter to quarter growth.

Our team settles into their into their pace.

Good morning, everybody. Uh, thanks for taking my question. So I wanted to ask about, um, The Rose, obviously a nice ramp. Um, you're seeing there. I think you're now within your long-term, um, win per unit per day targets. And so, I guess the question would be, you know, how to think about the margin ramp, uh, from here and into next year. Um, and, you know, I, I apologize for the near-term question, but, but any sort of concerns around this sort of, um, government shutdown, uh, that's going on in, in uh, in in in the DC and the like um, that would be helpful too as well. Thank you.

Bill Carstanjen: Brant, thanks for the question. Yeah, we're thrilled with the progression of The Rose. We still think we have a long way to go, and we think as we progress and as our win per unit goes up, you should see improving margins. Right now, we're still heavily investing in marketing as we try to drive awareness in a very big, large, complex MSA. You mentioned also what's going on in that market. We don't really see or feel in a way that we can tell the impact of some of the government shutdown discussions or whatnot. It's such a huge area. It's 6.5 million people, and we've not even been open in a year. We're just growing through it.

We think theres more things good.

Brent, thanks for the question. Um,

Good things to come there and it would be our expectation that youll continue to see improving performance on margins and things like that as we drive better awareness and better performance per machine.

Yeah, we're we're thrilled with the, the progression of the rows. We still think we have a long way to go.

Um,

Thank you.

Yes.

Our next question comes from the line of Shaun Kelley with Bank of America.

Okay.

And we think as as we progress and as our, our wind per unit goes up, uh, you should see improving margins right now. We're still heavily investing in in marketing, as we try to drive awareness in a very big large complex, MSA,

Hey, good morning, everyone. Thanks for taking my question.

Wondering if.

Um, and you, you mentioned also, um,

You guys have thought at all about or could give us some of your kind of emerging thoughts on the whole.

What's going on in that market?

We don't really.

Emerging landscape of prediction markets. This is a fairly disruptive force that's happening out there.

<unk>.

And I'm thinking about the potential implications specifically for the Derby, you've obviously through the pair mutual approach and then.

Bill Carstanjen: I think it's such a huge market with great demographics, both from the population level and from the income level, that we're just in a process of growing into our size. Some of the noise going on is just not something that we can discern as we currently grow. Yeah, we're really happy with how that's progressing. We're really happy with the quarter-to-quarter growth, and as our team settles into the pace, we think there's more good things to come there. It would be our expectation that you'll continue to see improving performance on margins and things like that as we drive better awareness and better performance per machine.

See, or feel in a, in a way that we can tell that the impact of some, of the, the government shutdown discussions or whatnot, it's such a huge area. It's 6 and a half million people and we, we've not even been open in a year. So we're just growing through it. So, uh, I think it's such a

Through the content control have generally had very strong sort of ability to control whats going out there in the bedding sphere for the Derby, but this kind of new world seems too.

Do particularly well when we're talking about like really large tent pole events and the Derby NRI. So I'm just wondering was that because it is definitely one of those so just kind of wanted to get your thoughts I know, it's not really subject, but if you had any have any of those operators potentially approached you about sponsorship or anything else.

Sure. Thanks, Sean.

No.

Let me start by saying that.

Wagering on horse racing in the United States is actually governed under an umbrella federal law called the Interstate Horse Racing Act, that's very different than sports wagering that you see.

Uh, huge Market with great demographics, uh, both from the population level, and from the income level that we're just in a process of growing into our into our size. So uh, some of the noise going on is just not something that we can discern, um, as as we currently grow. So, uh, yeah. We're really happy with how that's progressing. We're really happy with the quarter to quarter growth and, uh, as our team settles into their into their, the pace. Uh, we think there's more things to, to good things to come there. And, you know, it would be our expectation that you'll continue to see improving performance on margins and things like that. As, as we drive better, awareness and better performance, uh, per machine

Operator: Thank you. Our next question comes from the line of Sean Kelly with Bank of America.

Thank you.

Cross all of the states, which is a state by state sort of Balkanized state law construct so our construct is fundamentally different than.

Our next question comes from the line of Sean Kelly with Bank of America.

[Analyst]: Hi, good morning, everyone. Thanks for taking my question. Just wondering if you guys have thought at all about or could give us some of your kind of emerging thoughts on the whole emerging landscape of prediction markets. This is a fairly disruptive force that's happening out there in the online sphere. I'm thinking about the potential implications specifically for the Derby. You've obviously, through the pari-mutuel approach and then through the content control, have generally had very strong sort of ability to control what's going out there in the betting sphere for the Derby. This kind of new world seems to do particularly well when we're talking about really large tentpole events. The Derby, in our eyes from a sporting perspective, is definitely one of those. Just kind of wanted to get your thoughts.

All the other sports wagering activity you see in the United States. We are governed by a specific dedicated federal law about how wagering works on horse racing, so that makes us quite different and the.

The requirements under that law are very clear about what it takes in order to take a wager.

On a horse race you have to have a contract with the content provider Thats US you have to have a contract with our horsemen et cetera. So.

Our philosophy on the prediction markets are we will approach them, we will explain to them.

The legal construct under which activity on our sport happens wagering activity on our sport happens will explain the both.

[Analyst]: I know it's an early subject, but if you had any and have any of those operators potentially approached you about sponsorship or anything else. Thanks.

The civil and criminal elements of the Interstate Horse Racing Act and.

Hi, good morning everyone. Thanks for taking my question. Um, just wondering if uh, you know you guys have thought at all about or could could give us some of your kind of emerging thoughts on the whole, uh, emerging landscape of prediction markets. Um, you know, this is a fairly disruptive Force that's happening out there in the the online sphere, um, and I'm thinking about the potential implications specifically for the Derby. You you've obviously through the param mutual approach and then uh um, through the content control, have generally had very strong sort of ability to control, what's going out there in the, in the betting Sphere for, for the Derby. But this kind of new world, you know, seems to, you know, do particularly well when we're talking about like really large tent, pole events and the Derby in our eyes from a sporting perspective is definitely 1 of those. So just kind of wanted to get your thoughts. I know it's an early subject but, uh, if you, if you had any, uh, and have any of those operators potentially approached you about sponsorship or anything else. Thanks.

Bill Carstanjen: Sure. Thanks, Sean. Let me start by saying that wagering on horse racing in the U.S. is actually governed under an umbrella federal law called the Interstate Horse Racing Act. That's very different than sports wagering that you see across all of the states, which is a state-by-state sort of balkanized state law construct. Our construct is fundamentally different than all the other sports wagering activity you see in the U.S. We are governed by a specific dedicated federal law about how wagering works on horse racing. That makes us quite different. The requirements under that law are very clear about what it takes in order to take a wager on a horse race. You have to have a contract with the content provider, that's us. You have to have a contract with our horsemen, etc. Our philosophy on the prediction markets is we will approach them.

Why compliance with it is so clear.

so,

And we'll take it from there we do not have a deal with any predictions markets predictive market companies to take wagers on our product.

let me start by saying that, um,

We are not in discussions to do that at this time, but we do plan on approaching them and explaining to them the legal construct under which wagering happens on our product. This is not a question like some of these other sports between state law and federal regulations, we have federal law that governs how we operate.

Wagering on horse racing in the United States is actually governed under an umbrella federal law called the Interstate Horse Racing Act. That's very different than sports wagering that you see across all the states, which is a state-by-state sort of balkanized state law construct. So our construct is fundamentally different than, um,

And certainly to the extent people Act.

Counter to having a deal with US and act counter to the Interstate Horse Racing Act, we will pursue all our rights and remedies under the Interstate Horse Racing Act so.

So for US I think we're different than the other sports I think we're different than the other.

Players in the online wagering game and that's a serious subject thats one we take very seriously and it's one that we've talked a lot and for US it's always a matter of communication and making sure that the players out there on the field understand how this sport works.

Bill Carstanjen: We will explain to them the legal construct under which activity on our sport happens. Wagering activity on our sport happens. We'll explain both the civil and criminal elements of the Interstate Horse Racing Act and why compliance with it is so clear. We'll take it from there. We do not have a deal with any prediction markets, predictive market companies to take wagers on our product. We are not in discussions to do that at this time, but we do plan on approaching them and explaining to them the legal construct under which wagering happens on our product. This is not a question like some of these other sports between state law and federal regulations. We have federal law that governs how we operate.

So they can contrast, it and understand it compared to the others.

Thank you.

And our next question comes from the line of Joe Stauff with Susquehanna.

Good morning, Bill Marcia.

Question on Virginia, if I could.

All the other sports wagering activity. You, you see in the United States, we are governed by a specific dedicated. Federal law about how wagering works on horse racing so that makes us quite different. And uh, the requirements under that law are very clear about what it takes in order to take away your, uh, on a horse race that you have to have a contract with the content provider. That's us, you have to have a contract with our Horsemen, Etc. So, um, uh, our philosophy on the prediction markets are, uh, we will approach them. We will explain to them, uh, the legal construct under, which activity on our sport happens, wagering activity. On our sport happens. We'll explain the both, uh, the civil and criminal elements of the interstate horse racing act. And uh, uh, why compliance with it is, is so clear. Um,

Yes, sorry repeat the question, maybe I would have in the past.

Will take it from there. We, we do not have a deal with any prediction markets predictive Market companies to take wages on our product.

I wanted to.

Ask again really on the process of shutting down illegal machines.

Kind of where that is bill you've described it as a bit of a whack a mole process has that changed.

And.

Bill Carstanjen: Certainly, to the extent people act counter to having a deal with us and act counter to the Interstate Horse Racing Act, we'll pursue all our rights and remedies under the Interstate Horse Racing Act. For us, I think we're different than the other sports. I think we're different than the other players in the online wagering game. That's a serious subject. It's one we take very seriously, and it's one that we've talked a lot. For us, it's always a matter of communication and making sure that the players out there on the field understand how this sport works so they can contrast it and understand it compared to the others.

Um, we are not in discussions to do that at this time, but we do plan on approaching them and explaining to them the legal construct under, which wagering happens on our product. This is not a question like some of these other sports between state law and federal regulations. We have federal law that governs. How we operate,

Do you think it's.

<unk> some of your assets within Virginia at least.

Modestly negative manner.

Today.

Just trying to understand this and essentially the opportunity and the tailwind.

Of closing down those machines over time, and how strong it is et cetera.

Sure Joe Happy to take that question and we haven't talked about that yet today. So.

Yeah.

I almost use the term great games, but these arent great games. These games are illegal the legislature has spoken in the court has spoken but there are constant issues of enforcement and also constant variations of games that manufacturers try to introduce to try to distinguish themselves from a from the very clear law of how this works.

Um and uh certainly to the extent people act uh, counter to having a deal with us and act counter to the interstate horse. Racing act will pursue all our rights and remedies under the interstate horse racing act. So um, so for us I think we're different than the other sports. I think we're different than the other uh players in the in the online wagering game. And that's a serious subject. It's 1. We take very seriously and it's 1 that we've talked a lot and for us it's always a matter of communication and making sure that the players out there on the field. Understand how this sport Works. Uh, so they can contract it and understand it compared to the others.

Operator: Thank you. Our next question comes from the line of Joe Staff with Susquehanna.

Thank you.

In our next question, comes from the line of Joe staff with soos Guana.

[Analyst]: Good morning, Bill, Marcia. Question on Virginia, if I could. Sorry to repeat the question as maybe I have in the past, but I wanted to ask again, really on the process of shutting down illegal machines, kind of where that is. Bill, you've described it as a bit of a whack-a-mole process. Has that changed? Do you think it's affecting some of your assets within Virginia, at least in a modestly negative manner today? Just trying to understand essentially the opportunity and the tailwind of closing down those machines over time and how strong it is, etc.

Good morning, Bill Marcia. Um,

So it is a bit of a whack a mole theres been a lot of progress in the state.

question on Virginia, if I could, um,

This isn't binary it isn't black or white in the sense that there is always going to be an element of enforcement necessary because of the shenanigans. Some of these manufacturers try to try to engage and to introduce machine. So.

You know sorry to repeat the question as maybe I've had in the past, but I I wanted to, you know, ask again really on the process of shutting down illegal machines.

Generally there has been pretty strong enforcement, it's very clear from the attorney General is very clear from the legislature, but theres always.

You know, kind of where that is, Bill. You've described it as a bit of a whack-a-mole process. Has that changed?

and,

Theres always enforcement issues.

That will happen, especially when manufacturers may try to muddy the water with with games that are different in some way. So I think it's I think that's a.

A process that goes on it has slowed or is sort of a slow burn and definitely theres still great games out there. We don't think they're really material at this point the enforcement has been pretty good but they are out there and it's it requires constant vigilance and constant communication with law enforcement.

Do you think it's affecting some of your assets within Virginia? At least, you know, in the modestly negative manner? Uh, today, um, just, you know, trying to understand and essentially the opportunity and the Tailwind

Uh, of closing down those machines over time and how strong it is, etc.

Bill Carstanjen: Sure, Joe. Happy to take that question. We hadn't talked about that yet today. I almost use the term gray games, but these aren't gray games. These games are illegal. The legislature has spoken and the court has spoken, but there are constant issues of enforcement and also constant variations of games that manufacturers try to introduce to try to distinguish themselves from the very clear law of how this works. It is a bit of a whack-a-mole. There's been a lot of progress in the state. This isn't binary. It isn't black or white in the sense that there is always going to be an element of enforcement necessary because of the shenanigans some of these manufacturers try to engage in to introduce machines. Generally, there has been pretty strong enforcement. It's very clear from the Attorney General. It's very clear from the legislature.

Sure Joe. Happy to take that question. Um and we hadn't talked about that yet today. So um

In constant a willingness to engage with the courts.

It's just part of the environment and that stayed in and in others. So we're going to grow through that we are growing through that we are building our business through that and that's just.

Part of that process that we keep our eye on that and keep keep pushing on that but I would I would say over the most current quarter. It hasnt been a big driver or a big concern we feel like we have it mostly and a good and a good place.

Um, I almost used the term gray games but these aren't gray games. These games are illegal, the legislature is spoken in the court has spoken, but there are constant issues of enforcement and also constant, variations of of games that uh, manufacturers try to introduce to try to distinguish themselves from a from the very clear law of how this works. So, it is a bit of a, a whack-a-mole, there's been a lot of progress in the state.

Thank you.

Now I'll turn the call back over to CEO Bill <unk> for any closing remarks.

Thanks for your time this morning, everybody.

Bill Carstanjen: There's always enforcement issues that will happen, especially when manufacturers may try to muddy the water with games that are different in some way. I think that's a process that goes on. It's sort of a slow burn indefinitely. Yeah, there's still gray games out there. We don't think they're really material at this point. The enforcement has been pretty good, but they are out there, and it requires constant vigilance and constant communication with law enforcement and constant willingness to engage with the courts. It's just part of the environment in that state and in others. We're going to grow through that. We are growing through that. We are building our business through that. That's just part of that process that we keep our eye on that and keep pushing on that.

For our investors. Thank you for your trust in US we won't let you down we're proud of the team. We think we had a strong quarter and we think we have more to board good things to come So we'll keep doing what we're doing and again, thanks for your confidence and trust in us.

We look forward to talking to you next year next actually will be next year, but next quarter as well. Thank you.

Ladies and gentlemen, thank you for participating this does conclude today's program and you may now disconnect.

At this point, the enforcement has been pretty good, but they are out there and it's a, it requires constant vigilance and constant communication with law enforcement, um, and constant and willingness to engage with the courts. Um, it's just part of the environment in that state and and, and in others. So we're going to grow through that. We are growing through that. We are building our business through that and that's just uh,

Bill Carstanjen: I would say over the most current quarter, it hasn't been a big driver or a big concern. We feel like we have it mostly in a good place.

Uh part of that process that we keep our eye on that and keep keep pushing on that. But I would I would say over the the most current quarter it hasn't been a big driver or a big concern. We feel like we have it mostly in a good in a good place.

Operator: Thank you. I'll now turn the call back over to CEO Bill Carstanjen for any closing remarks.

Thank you.

I'll now turn the call back over to CEO. Bill carsten engine for any closing remarks.

Bill Carstanjen: Thanks for your time this morning, everybody. For our investors, thank you for your trust in us. We won't let you down. We're proud of the team. We think we had a strong quarter, and we think we have more good things to come. We'll keep doing what we're doing. Again, thanks for your confidence and trust in us. We look forward to talking to you next year, actually, it will be next year, but next quarter as well. Thank you.

Operator: Ladies and gentlemen, thank you for participating. This does conclude today's program, and you may now disconnect.

Uh, thanks for your time this morning, everybody. Uh for our investors, thank you for your trust in in us. Uh we won't let you down. We're proud of the team. We think we had a strong quarter and we think we have more to more good things to come. So we'll keep doing what we're doing. And again, thanks for your confidence and Trust in us. Uh, we look forward to talking to you next year. Next actually will be next year, but next quarter as well. Thank you.

Ladies and gentlemen, thank you for participating. This does conclude today's program and you may now disconnect