CHDN 10-K & 10-Q changes, risk factors and insider trading

Our operating results depend, in large part, on revenues derived from customers visiting our casinos and racetracks, which is subject to the occurrence and threat of extraordinary events that may discourage attendance or expose us to substantial liability. Terrorist activity, including acts of domestic terrorism, civil unrest, or other actions that discourage attendance at other locations, or even the threat of such activity, including public concerns regarding air travel, military actions, safety, and additional national or local catastrophic incidents, could result in reduced attendance at Churchill Downs Racetrack and at our other locations. A major epidemic or pandemic, outbreak of a contagious equine or human disease, or the threat of such an event,event (as well as measures implemented to address such events or risks), could also adversely affect attendance and could impact the supply chain for our major construction projects resulting in higher costs and delays of the projects. For example, the COVID-19 global pandemic resulted in the temporary suspension of operations of all of our wholly owned gaming properties, certain wholly owned racing operations, and the two gaming properties related to our equity investments. While we are constantly evaluating our security precautions in an effort to ensure the safety of the public, no security measures can guarantee safety and there can be no assurances of avoiding potential liabilities.

Due to the nature of our business, we are subject to taxation in a number ofseveral jurisdictions and changes in, or new interpretations of, tax laws, tax rulings or their application by tax authorities could result in additional tax liabilities and could materially affect our financial condition and results of operations

We believe that the prospect of raising significant additional revenue through taxes and fees is one of the primary reasons that certain jurisdictions permit legalized gaming. As a result, gaming companies are typically subject to significant taxes and fees in addition to the normal federal, state, provincial, and local income taxes and such taxes and fees may be increased at any time. From time to time, legislators and officials have proposed changes in tax laws or in the administration of laws affecting the horse racing, online wagering, and casino industries. Many states and municipalities, including ones in which we operate,municipalities are currently experiencing budgetary pressures that may make it more likely they would seek to impose additional taxes and fees on our operations. We are subject to tax in multiple U.S. tax jurisdictions and judgment is required in determining our provision for income taxes, deferred tax assets or liabilities, and in evaluating our tax positions. It is not possible to determine the likelihood, extent or impact of any future changes in tax laws or fees, or changes in the administration of such laws; however, if enacted, such changes could have a material adverse impact on our business.

Other factors that could influence our reputation include the quality of the services we offer and public perception of our actions with regard toregarding social issues such as diversity, human rights, and support for local communities. Broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of us or our properties. It may be difficult to control or effectively manage negative publicity, regardless of whether it is accurate. Negative events and publicity could quickly and materially damage perceptions of us, our properties, or our industries, which, in turn, could adversely impact our business, financial condition or results of operations through loss of customers, loss of business opportunities, lack of acceptance of our company to operate in host communities, employee retention, or recruiting difficulties or other difficulties.

We continue to experience a competitive labor market. Increased employeeEmployee turnover, changes in the availability of our workers, or labor shortages in our supply chain could result in increased costs and impact our ability to fully staff our operations, which could negatively affect our financial condition, results of operations, or cash flows.

We face an increasingly high degree of competition among a large number ofmany participants operating from physical locations and/orincluding throughland-based online or mobile platforms, includingcasinos, destination casinos, Native American gaming, riverboat casinos; docksideand casinos;other land-basedgaming casinos;locations including video lottery; iGaming; sports betting;lottery, gaming at taverns in certain states, such as Illinois; gaming attaverns, truck stops, gas stations,stations and other establishments in certain states, such as Louisiana, Pennsylvania, Virginia, and Kentucky;establishments, historical horse racing in Kentucky;venues, sweepstakes and poker machines not located in casinos; fantasy sports; Native American gaming;casinos, and othercharitable formsgaming. We also face an increasingly high degree of gaming in the U.S. Furthermore, competition from internetonline lotteries,or sweepstakes,mobile illegalplatforms, slotincluding machinesiGaming; sports betting; i-lotteries; prediction markets; and skill games, fantasy sportssports. andCompetition internet,from online or mobile-basedmobile gaming platforms, which allow their customers to wager on a wide variety of sporting events and/or play Las Vegas-style casino games from home or in non-casino settingsplatforms could divert customers from our properties and thus adversely affect our financial condition, results of operations, and cash flows. Currently, thereseveral states are considering legislative proposals that would legalize sports betting and, in some cases, internet poker, sports betting,poker and other varietiesforms of iGaming in a number of states.iGaming. Expansion of land-based andgaming or iGaming in otherthe jurisdictionsmarkets (both regulated and unregulated) could further compete with our operations,in which we operate brick-and-mortar casinos or racing venues could have an adverse impact on our financial condition, results of operations, and cash flows.

Legalized gaming is currently permitted in various forms throughout the U.S. andincluding on various lands taken into trust for the benefit of certain Native AmericansAmerican inlands. theCertain U.S. and Canada. Other jurisdictions,states, including states adjacent to states in which we currently have properties, have recently legalized, implemented, and expanded gaming. Established gaming jurisdictions could award additional gaming licenses or permit the expansion or relocation of existing gaming operations. Voters and state legislatures may seek to supplement traditional tax revenue sources of state governments by authorizing or expanding gaming in the states that we operate in or the states that are adjacent to or near our existing properties. New, relocated, or expanded gaming operations maintained by other personsindustry participants could increase competition for our operations and could have a material adverse impact on us.

Our Churchill Downs Racetrack is dependent upon the number of people attending and wagering on live horse races. If interest in horse racing is lower in the future, it may have a negative impact on revenue and profitability in our Live and Historical Racing segment. In addition, accidentsAccidents and adverse events that may occur at our racetrack and any reputational damage as a result may negatively impact attendance at and wagering on our live horse races. If attendance at and wagering on live horse racing declines, it could have a material adverse impact on our business.

The number and level of sponsorships are important to the success of the Kentucky Derby. OurIf abilitywe are unable to retain sponsors, acquire new sponsors, and compete for sponsorships and advertising dollarsdollars, it could have a material adverse impact on our business.business, including by significantly reducing revenue and harming the long-term scale and prestige of the event.

A significant amount of our revenue is attributable to slot, HRM, VLTs, and video poker machines operated by us at our properties, and there are a limited number of slot machine and HRM manufacturers servicing the industry. It is important for competitive reasons that we offer the most popular and up-to-date machine games with the latest technology to our guests. A substantial majority of the slot and HRM machines sold in the U.S. are manufactured by a few select companies. TheWe pricesrely on a limited number of newvendors to provide video poker, slot and HRM machines may escalate and manufacturersany loss of equipment suppliers could refuseimpact toour sell us machines featuring the most popular games, instead requiring participating lease arrangements to acquire the machines. Such agreements may be substantially more expensive over the long term than the cost of purchasing a new machine.operations.

We rely on vendors that may use components produced in foreign countries. Restrictions on international trade, such as tariffs and other controls on imports or exports, could impact the pricing and availability of slot and HRM machines. Availability of the most popular games may also be limited by the manufacturer. If we are unable to maintain availability of the most popular games, it could impact our ability to attract and retain customers.

We rely on a variety of hardware and software products to maximize revenue and efficiency in our operations. Technology in the gaming industry is developing rapidly, and we may need to invest substantial amounts to acquire the most current gaming and hotel technology and equipment in order to remain competitive in the markets in which we operate. We rely on a limited number of vendors to provide video poker, slot, and HRM machines and any loss of equipment suppliers could impact our operations. Ensuring the successful implementation and maintenance of any new technology acquired is an additional risk.

Our business is subject to online securitycybersecurity risk, including the risk of data privacy and cybersecurity breaches.breaches or attacks on our or our third-party service providers' IT systems. Loss or misuse of our storedconfidential information as a resultbecause of such a breach, including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation, potential liability, or otherwise harm our business

We receive, process, store, and use personal information and other customerconfidential andinformation employeein dataour daily business operations, including by maintaining and transmitting customers’ personal and financial information, credit card settlements, credit card funds transmissions, mailing lists, and reservations information. Our collectionprocessing of such datapersonal information is subject to extensive requirements and regulation by private groups, such as the payment card industry,industry or through contracts, as well as by governmental authorities, including privacy, consumer protection, financial and gaming authorities.

There are numerous federal, state, and local laws regarding privacy and the storing, sharing, use, processing, disclosure and protection of personal information and other data, and such privacy laws and regulations continue to evolve. ManyAll U.S. states have passed laws requiring notification to customersindividuals when there is a security breach forthat compromises certain personal data, suchand asother thefederal 2002and amendmentstate tolaws California’sand Informationregulations Practicesrequire Actreasonable or requiring the adoption ofcertain minimum information security standards that are often vaguely defined and may be difficult to implement. CaliforniaMoreover, hasan adoptedincreasing number of states have passed broad consumer privacy laws, such as the California Consumer Privacy Act of 2018 (the "CCPA"), which went into effect on January 1, 2020,2020 providingand provided California consumers greater control of the information collected, stored, and sold,sold. Further amendments and otherregulations statesto arethe consideringCCPA similarenhanced legislation.consumer privacy rights and increased administrative obligations on business’ privacy programs. The CCPA provides a private right of action (in addition to statutory damages) for California residents whose sensitive personal information was breached as a resultbecause of a business’s violation of its duty to reasonably secure such information. Since 2018, several states have passed or are considering similar legislation. The costs of compliance with thesethe lawsU.S. privacy regime may increase as a resultbecause of changes in interpretation or changes in law.law, including as additional states passed similar or potentially conflicting laws. Any failure on our part to comply with these laws or our privacy policies may subject us to significant liabilities, including governmental enforcement actions or litigation.

We regularly identify, defend against, and recover from cybersecurity incidents, and have experiencedsuffered cyber attackscyber-attacks in the past. While these attacks have not had a significantmaterial impact on the Company to date, we and/or our third-party service providers may continue to experience cyber attacks,cyber-attacks, and such attacks could have an adverse impact on our business in the future. Our systems and processes that are designed to protect customerpersonal information and prevent data lossloss, andoperational disruption or other securitycybersecurity breaches,incidents, including systems and processes designed to reduce the impact of a security breach at a third-party vendor or joint venture partner, may not be successful. Interruptions in our services or a breach of a customer’s secure data could cause current or potential users to believe that our systems are insecure or unreliable, which could permanently harm our reputation and brand. These interruptions could also increase the burden on our engineering staff, which, in turn, could delay our introduction of new features and services on our websites and in our casinos. Such incidents could give rise to remediation costs, monetary fines, and other penalties, or other business losses which could be significant. We attempt to protect against this risk with our property and business interruption insurance, which covers damage or interruption of our systems, although there is no assurance that such insurance will be adequate to cover all potential losses.

Third parties we work with, such as vendors, may violate applicable lawslaws, their contractual commitments or our privacy and information security policies, and such violations may also put our customers’ information at risk and could in turn have an adverse impact on our business. We are also subject to payment card association rules and obligations under each association’s contracts with payment card processors. Under these rules and obligations, if information is compromised, we could be liable to payment card issuers for the associated expense and penalties. If we fail to follow payment card industry security standards, even if no customer information is compromised, we could incur significant fines or experience a significant increase in payment card transaction costs.

Security breaches, computer malware, and computer hacking attacks and software or IT system vulnerabilities have become more prevalent in our industry, and hackers and data thieves are increasingly sophisticated and operate large-scale and complex attacks. Many companies, including ours, have been the targets of such attacks. Moreover, the rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks. Any security breachbreach, either caused by intentional hacking or human error, which involvesresults efforts to gainin unauthorized access to information or systems, or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment, andor the inadvertent transmission of computer viruses could harm our business. Because the techniques used to obtain unauthorized access, disable, or degrade service, or sabotage systems, change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Though it is difficult to determine what harm may directly result from any specific interruptioncybersecurity or breach,incident, any failure to maintain performance, reliability, security, and availability of our network infrastructure to the satisfaction of our players may harm our reputation and our ability to retain existing players and attract new players.

The costs to eliminatemitigate orand addressmanage the foregoing security threats and vulnerabilities before or after a cyber incident could be significant. Our containment or remediation efforts may not be successful and could result in interruptions, delays, or cessation of service, and loss of existing or potential suppliers or customers. As threats related to cyber attackscyber-attacks develop and grow, we may also find it necessary to make further investments to protect our data and infrastructure, which may impact our results ofor operations. We have insurance coverage for protection against cyber attacks,cyber-attacks, which is designed to cover expenses around notification, credit monitoring, investigation, crisis management, public relations, and legal advice. This insurance coverage may not be sufficient to cover all possible claims, and we could suffer losses that could have a material adverse effect on our business.

Our operations rely heavily on technology services, and catastrophic events andevents, system failuresfailures, errors, defects, or disruptions with respect to these technology services could cause a significant and continued disruption to our operations

We rely on information technology and other systems to manage our business. A disruption or failure in our technology systems or operations in the event of a cyber attack, major earthquake, weather event, terrorist attack, or other catastrophic event could interrupt our operations, damage our properties, and reduce the number of customers who visit our facilities in the affected areas. Security breachesincidents could expose the Company to a risk of loss or misuse of our or our customers’confidential information, litigation, regulatory enforcement, and potential liability. In addition, cyberCyber incidents that impact the availability, reliability, speed, accuracy, or other proper functioning of our technology systems could impact our operations. A significant cyber incident, including system failure, security breach, disruption by malware or other damage could interrupt or delay our operations, result in a violation of applicable privacy and other laws,laws or contractual obligations, damage our reputation, subject us to litigation, cause a loss of customers or give rise to remediation costs, monetary fines, and other penalties, which could be significant.

Our online wagering, HRM and brick-and-mortar casino businesses depend upon our communications hardware and our computer hardware. Our systems also remain vulnerable to damage or interruption from floods, fires, power loss, telecommunication failures, terrorist cyber attacks, hardware or software error, computer viruses, computer denial-of-service attacks and similar events. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems could result in lengthy interruptions in our services. Any unscheduled interruption in the availability of our websites and our services could result in an immediate, and possibly substantial, loss of revenue.

We may not be able to identify and / or complete acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget or as planned and we may experience difficulty in integrating acquisitions or transitioning divested assets to a third-party

We face challenges in identifying and completing acquisitions or divestiture opportunities or other development or expansion projects that fit with our strategic objectives. These projects require significant capital commitments and the incurrence of additional debt. These projects also have risks associated with managing and integrating the acquisition or expansion project.acquisition.

We have completed acquisition transactions in the past, and we may pursue acquisitions from time to time in the future. The successful integration of newly acquired businesses into our operations has required and will continue to require the expenditure of substantial managerial, operating, financial, and other resources and may also lead to a diversion of our attention from our ongoing business concerns. We may not be able to successfully integrate new businesses, manage the combined operations or realize projected revenue gains, cost savings, and synergies in connection with those acquisitions on the timetable contemplated, if at all. Management of the new business operations, especially those in new lines of business or different geographic areas, may require that we increase our managerial resources. The process of integrating new operations may also interrupt the activities of those businesses, which could have a material adverse impact on our business. The costs of integrating businesses we acquire could significantly impact our short-term operating results. These costs could include the following:

IfThe weimpact are unsuccessful in overcomingof these risks,risks itmay cause us to not realize the intended benefits of these capital investments or divestitures which could have a material adverse impact on our business.

In November 2024, the Company opened The Rose Gaming Resort approximately 30 miles south of Washington D.C. The Company invested approximately $460 million to construct The Rose Gaming Resort opened with 1,650 HRMs, a 102-room hotel, eight food and beverage options,offerings, and 1,650a historicalsimulcast racingwagering machines ("HRMs"). The Rose Gaming Resort has the potential to be expanded to up to 1,800 HRMs.area.

In April 2024, the Company opened the Terre Haute Casino Resort in Terre Haute, Indiana. The Company invested approximately $290 million to develop the Terre Haute Casino Resort opened with a luxury hotel, 1,040 slot machines, 36 tables games, a state-of-the-art sportsbook, and regionally inspiredhotel, food and beverage amenities.offerings, and a retail sportsbook.

ImpairmentImpairments

During the quarter ended June 30, 2023,Because the Company evaluateddoes economicnot conditionscurrently subsequentintend to expand Chasers, the Company settled an outstanding liability owed to the dateformer owners of our annual impairment assessment on April 1, 2023, including competition in the market and inflationary pressures, which increased during the second quarter of 2023, and impacted the performance and outlook of Presque Isle Downs and Casino ("Presque Isle"). As a result, the Company concluded that a trigger event for impairment testing occurredChasers, related to the Presque IsleChasers' gaming rights, trademark,in the amount of $10.0 million. The settlement of the noncurrent liability resulted in a gain of $40.0 million in the third quarter of 2025. Given the completion of the Salem Transaction and the reporting unit's goodwill at the endsettlement of the secondliability quarter.related Based onto the triggerChasers' event,gaming rights, the Company evaluated and subsequently updated the projected cash flows and discount rate related to reflect the economicChasers' environmentgaming at that time.rights. As a result,result of this assessment, the Company recognized a non-cash impairment charge of $24.5$85.1 million in the secondthird quarter of 20232025 for the Presqueentire Islevalue of the Chasers' gaming rights, which are included in the Live and Historical Racing segment. The $40.0 million gain on settlement of the noncurrent liability and the $85.1 million impairment charge of the gaming rights andintangible trademark.are included in Asset impairments, net in the Consolidated Statements of Comprehensive Income. For additional information, refer to Note 7, Asset Impairments to the notes to consolidated financial statements included in Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.

Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to a noncontrolling interest.interests.

– Acquisition, disposition, and property sale related charges; and – Other transaction expense, including legal, accounting and other deal-related expense;

• Rivers Des Plaines' impact on our investments in unconsolidated affiliates from: legal reserves and transaction costs;

• Asset impairmentsimpairments, net;

AsThe ofproperty Decemberassociated 31, 2021,with Arlington International Racecourse ("Arlington") ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears. Arlington's results and exit costs in 2023 are treated as an adjustment.

In 2024,2025, we delivered strong performance whileand continuingmade investments in the executionKentucky ofDerby severaland organicnew investmentsentertainment venues that we believe will provide long-term sustainable value creation.creation Wefor deliveredour strong growth in net revenue, operating income, net income, and Adjusted EBITDA compared to fiscal year 2023:shareholders.

•NetRecord net revenue was $2.7$2.9 billion, up $272.6$191.6 million or 11.1%7.0%;

•Net income was $426.8$383.0 million, updown $9.5$43.8 million or 2.3%10.3%;

•Record Adjusted EBITDA was $1.2 billion, up $135.3$46.1 million, or 13.2%4.0%;

◦Churchill Downs Racetrack ran the 150th151st Kentucky Derby on the first Saturday of May, generating all-time handle record all-sourcesfor handlethe Kentucky Derby Race, Kentucky Derby Day Program, and all-time recordKentucky Derby Week Adjusted EBITDAraces with nearly 157,000147,00 fans gathered in person to watch the most exciting two minutes in sports.

•Kentucky HRMs:

•Virginia HRMs:

◦Richmond▪Completed Expansion:the Announcedexpansion plans to further expandof the Richmond, Virginia HRM venuein byAugust 450 HRMs.2025.

This report contains various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), which provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this report are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and / or management’s good faith belief with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date that the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," '"intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduledscheduled,", and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

•changes in, or new interpretations of, applicable tax lawslaw or rulings that could result in additional tax liabilities;

•cybersecurity risk, including cyber-securitycybersecurity breaches, or loss or misuse of our confidential information as a result of a breach including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation;

•increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and

•Transaction expense, netnet, which includes:

For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Condensed Consolidated Statements of Comprehensive Income. See the Reconciliation of ComprehensiveNet Income to Adjusted EBITDA included in this section for additional information.

In Louisiana, the 2021 Historical Horse Racing Act (the "2021 HHR Act") allows off-track betting facilities ("OTBs") to have up to 50 HRMs in each OTB. The Company installed approximately 500 HRMs across our 13 OTBs after the 2021 HHR Act was approved. On October 25, 2022, a number of individual plaintiffs associated with video poker and truck stops, filed a lawsuit in the 19th Judicial District Court in East Baton Rouge, LouisianaLouisiana, against certain racetracks in Louisiana, including our Fair Grounds Race Course and Slots business, alleging that the 2021 HHR Act was unconstitutional to the extent it purports to permit historical racing in a parish without a referendum.

•Net revenue increased $20$46 million driven by a $24$33 million increase from the Live and Historical Racing segment primarily due to continueda growthrecord-breaking Derby Week at ourChurchill HRMDowns venues andRacetrack, a $2$9 million increase from the Wagering Services and Solutions,Solutions partiallysegment, offset byand a $6$4 million decreaseincrease from the Gaming segment primarily driven by the cessation of HRM operations in Louisiana in May 2025.segment.

•AdjustedOperating EBITDAincome increased $12$30 million driven by a $11$21 million increase from the Live and Historical Racing segment andprimarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $4 million increase from the Wagering Services and Solutions segment.segment, a $3 million increase from the Gaming segment, a $2 million increase attributable to the non-cash impairment charge of Virginia HRMs that did not recur in the current period, and $1 million decrease in transaction costs. These increases were partially offset by a $1 million decrease from the Gaming segment and a $2 million decrease in All Other.

•Live and Historical Racing revenue increased $24$34 million due to a $17$21 million increase from Churchill Downs Racetrack, a $12 million increase from our Kentucky HRM venues, and a $5$1 million increase from our Virginia HRM venues,venues. and a $3 million increase from our New Hampshire venues, partially offset by a $1 million decrease fromThe Churchill Downs Racetrack.Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue. The Kentucky HRM increase was due to a $6$5 million increase from our WesternSouthwestern Kentucky venues, a $4$3 million increase from our Northern Kentucky venues, a $4$3 million increase from our SouthwesternWestern Kentucky venues, and a $3$1 million increase from our Louisville venues. The Virginia HRM increase was primarily due to a $5 million net increase primarily from our Northern Virginia venues and a $1 million increase from our Western Virginia venue,venues, partially offset by a $1$4 million net decrease from our Central Virginia venues primarily from increased competition and unfavorable weather.competition.

•Wagering Services and Solutions revenue increased $2$10 million primarilydue to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering and a $1 million increase from our retail sports bettingExacta business.

•Gaming revenue decreased $5$1 million primarily due to a $9$14 million net decrease from our Louisiana, Florida, and Mississippi properties primarily from the cessation of HRM operations in Louisiana in May 2025 and a $2 million decrease primarily from our Florida and Mississippi properties. These decreases were2025, partially offset by a $6$13 million increase primarily fromin our New York, Indiana, Maryland, and MarylandIowa properties.

Operating expenses increased $12$16 million and $28 million for the three and six months ended MarchJune 31,30, 2026 compared to MarchJune 31,30, 2025 primarily due to thehigher openinggaming taxes as a result of Marshallincreased Yardsrevenues. The remaining increase is primarily driven by normal inflationary activity resulting in Kentuckyincreased inoperational February 2026.costs.

•Live and Historical Racing Adjusted EBITDA increased $11$21 million due to a $9$16 million increase from Churchill Downs Racetrack, a $6 million increase from our Kentucky HRM venues, and a $3$1 million net increase from our Virginia HRM venues, and a $1 million net increase from our New Hampshire venues, partially offset by a $2 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue. The Churchill Downs Racetrack.Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue, partially offset by higher operating expenses. The Kentucky HRM increase was due to a $3 million increase from our Western Kentucky venues, a $3$2 million increase from our Northern Kentucky venues, and a $3$2 million increase from our LouisvilleSouthwestern Kentucky venues, and a $2 million increase from our Western Kentucky venues. The Virginia HRM increase was primarily due to a $7$4 million net increase from our Northern Virginia venues, a $1 million increase from our Western Virginia venue, and a $1 million increase from our Southern Virginia venues, partially offset by a $4$5 million net decrease from our Central Virginia venues primarily from increased competition and unfavorable weather.competition.

•Wagering Services and Solutions Adjusted EBITDA increased $4 million primarilydue to a $3 million increase from lower legal expenses in our Horse Racing business and growtha in$1 million increase from our retail sports bettingExacta business.

•All Other Adjusted EBITDA decreased $2$5 million primarily due to a reduction of corporate legal-related fees in the prior year quarter and claim development within our captive insurance company.

Reconciliation of ComprehensiveNet Income to Adjusted EBITDA

ThreeSix Months Ended MarchJune 31,30, 2026, Compared to the ThreeSix Months Ended MarchJune 31,30, 2025

•Cash flows provided by operating activities increased $48$25 million driven primarily by a decrease in cash used for working capital and an increase in net income and deferred taxes, partially offset by a decrease in income taxes. We anticipate that cash flows from operations and availability of borrowings under our credit facility over the next twelve months will be adequate to fund our business operations and capital expenditures.

We have announced several project capital investments, including the following: FinishRockingham LineGrand Suites,Casino Thein Mansion,New Hampshire and Victory Run at Churchill Downs Racetrack, and plans to redevelop Casino Salem into Rockingham Grand Casino in New Hampshire.Racetrack. We currently expect our project capital to be approximately $180 to $220 million in 2026, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.

On July 22, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500 million (the "July 2025 Stock Repurchase Program"). The July 2025 Stock Repurchase Program includes and is not in addition to the $169 million previously remaining under the prior March 2025 Stock Repurchase Program. Share repurchases may be made at management’s discretion from time to time in the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time. We had approximately $430 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at MarchJune 31,30, 2026, based on trade date.

On March 12, 2025, the Board of Directors of the Company approved a new common stock repurchase program of up to $500 million (the "March 2025 Stock Repurchase Program"). The March 2025 Stock Repurchase Program included and was not in addition to any unspent amount remaining under the prior authorization. As described above, the March 2025 Stock Repurchase Program has since been replaced by the July 2025 Stock Repurchase Program.

At MarchJune 31,30, 2026, the Company’s senior secured credit facility (as amended from time to time, the "Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $285$284 million senior secured term loan B-1 (the "Term Loan B-1"), $1.1 billion senior secured term loan A (the "Term Loan A"), and $100 million swing line commitment. On July 3, 2024, the Company closed an amendment of the Credit Agreement to (i) extend the maturity date of the Revolver and Term Loan A from 2027 to 2029 and (ii) amend certain other provisions to the Credit Agreement.

The Term Loan B-1 requires quarterly payments of 0.25% of the original $300 million balance. The Term Loan B-1 may be subject to additional mandatory prepayment from excess cash flow on an annual basis per the provisions of the Credit Agreement.

The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio. As of MarchJune 31,30, 2026, that applicable margin was 150 basis points,points which was based on the pricing grid in the Credit Agreement. The Company had $722$861 million available borrowing capacity under the Revolver,capacity, after consideration of $8$10 million in outstanding letters of credit, under the Revolver as of MarchJune 31,30, 2026.

The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company. For the period ended MarchJune 31,30, 2026, the Company's commitment fee rate was 0.25%.

The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $161$152 million assuming no change in the weighted average borrowing rate of 5.30%,5.27%, which was in place as of MarchJune 31,30, 2026. During the threesix months ended MarchJune 31,30, 2026, we had repayments of principal and interest on the Credit Agreement of $475$1.1 million.billion.

As of MarchJune 31,30, 2026, we had $600 million in aggregate principal amount of 5.500% senior unsecured notes that mature on April 1, 2027 (the "2027 Senior Notes"). The 2027 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2019. The Company may redeem some or all of the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture.

As of MarchJune 31,30, 2026, we had a total of $700 million in aggregate principal amount of 4.750% senior unsecured notes (the "2028 Senior Notes") maturing on January 15, 2028. The 2028 Senior Notes consist of $500 million notes issued at par and $200 million notes issued at 103.25%. The 2028 Senior Notes were issued in a private offering to qualified institutional buyers, with interest payable in arrears on January 15th and July 15th of each year, commencing on July 15th, 2018. The 3.25% premium is being amortized through interest expense, net over the term of the notes. The Company may redeem some or all of the 2028 Senior Notes at redemption prices set forth in the 2028 Indenture.

As of MarchJune 31,30, 2026, we had $1.2 billion in aggregate principal amount of 5.750% senior unsecured notes that mature on April 1, 2030 (the "2030 Senior Notes"). The 2030 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2022. The Company may redeem some or all of the 2030 Senior Notes at redemption prices set forth in the 2030 Indenture.