Churchill Downs to Invest $50M in New KY HRM Facility

Churchill Downs

Churchill Downs (NASDAQ: CHDN) has announced plans to invest up to $50 million in developing a new historical racing machine (HRM) facility in Calvert City, Kentucky. The company projects expenditures between $40 million and $50 million for the establishment, which will act as “an extension” of its Oak Grove Racing, Gaming, and Hotel venue.

Expected to open in early 2026, the 23,000-square-foot facility will feature 250 HRMs, a sports bar, a sportsbook, and a simulcast center, according to a statement from the Kentucky-based gaming operator. This location will mark Churchill Downs’ eighth HHR venue within Kentucky and was announced alongside the company’s third-quarter earnings report.

Churchill Downs Eyes Expansion with New HRM Venue

Operating HRM facilities in Kentucky and Virginia, Churchill Downs remains optimistic about the growth potential of its latest venue in Calvert City. “Calvert City is an ideal location for our eighth HRM facility in Kentucky,” said CEO Bill Carstanjen, noting its strategic position near two interstates and proximity to a population of 300,000 within a 60-minute drive.

This new HHR property also highlights Churchill’s strategy following its $250 million acquisition of Exacta Systems in December 2022. Exacta, a Florida-based provider of HHR systems, will play a central role in Churchill’s focus on HRMs over the next five to ten years. Carstanjen stated, “These high-growth, high-margin investments provide an excellent return on our shareholders’ capital.”

HRMs as a Core Driver of Churchill Downs’ Growth

Although Churchill Downs is best known for its iconic racetrack and the Kentucky Derby, the company has diversified into regional casinos and HRM properties, both of which are key growth areas. According to Stifel analyst Jeffrey Stantial, Churchill’s seven Virginia-based HHR venues outperformed expectations in the third quarter. Stantial also pointed out that the upcoming Calvert City location and ongoing Virginia expansions could further drive growth for the company.

Stantial currently rates Churchill Downs stock a “buy” with a price target of $164, indicating potential upside of nearly 18%. Year to date, the stock has risen 3.15%, with recent gains accelerating to a 5.65% increase over the past month.

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