Churchill Downs (CHDN)

Risks

• The current novel coronavirus (COVID-19) global pandemic has adversely affected, and could continue to adversely affect our business, financial condition and financial results. Other major public health issues could adversely affect our business, financial condition and financial results in the future
• Our business could be adversely affected by the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change
• Our business is sensitive to economic conditions which may affect consumer confidence, consumers’ discretionary spending, or our access to credit in a manner that adversely impacts our operations
• We are vulnerable to additional or increased taxes and fees
• A lack of confidence in the integrity of our core businesses or any deterioration in our reputation could affect our ability to retain our customers and engage with new customers
• An inability to attract and retain key and highly-qualified and skilled personnel, as well as disruptions in the general labor market, could impact our ability to successfully develop, operate, and grow our business
• Our Company faces significant competition, and we expect competition levels to increase
• Our Churchill Downs Racetrack and the Kentucky Derby may be adversely affected by changes in consumer preferences, attendance, wagering, and sponsorships
• We are subject to significant risks associated with our equity investments, strategic alliances and other third-party agreements
• We may not be able to respond to rapid technological changes in a timely manner, which may cause customer dissatisfaction
• The concentration and evolution of the slot machine and HRM manufacturing industry or other technological conditions could impose additional costs on us
• Our operations in certain jurisdictions depend on agreements with industry constituents including horsemen and other racetracks, and the failure to enter into or maintain these agreements on terms acceptable to us could have a material adverse effect on our business, results of operations and financial condition
• We intend to focus on market access and our retail operations for our TwinSpires Sports and Casino business and there can be no assurance that we will be able to compete effectively or that we will generate sufficient returns on our investment
• Our business is subject to online security risk, including cyber-security breaches. Loss or misuse of our stored information as a result of such a breach, including customers’ personal information, could lead to government enforcement actions or other litigation, potential liability, or otherwise harm our business
• Our operations rely heavily on technology services, and catastrophic events and system failures with respect to these technology services could cause a significant and continued disruption to our operations
• 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
• We may experience difficulty in integrating recent or future acquisitions into our operations
• The development of new venues and the expansion of existing facilities is costly and susceptible to delays, cost overruns and other uncertainties
• Ownership and development of our real estate requires significant expenditures and ownership of such properties is subject to risk, including risks related to environmental liabilities
• Horse racing is an inherently dangerous sport and our racetracks are subject to personal injury litigation
• Any violation of the Foreign Corrupt Practices Act, other similar laws and regulations, or applicable anti-money laundering regulations could have a negative impact on us
• We are subject to payment-related risks, such as risk associated with the fraudulent use of credit or debit cards which could have adverse effects on our business due to chargebacks from customers
• Work stoppages and other labor problems could negatively impact our future plans and limit our operational flexibility
• We face risks related to pending or future legal proceedings and other actions
• Our operations are highly regulated and changes in the regulatory environment could adversely affect our business
• Our debt facilities contain restrictions that limit our flexibility in operating our business
• Any failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness could have a material adverse impact on our business
• Disruptions in the credit markets or changes to our credit ratings may adversely affect our business.
• Our insurance costs may increase, we may not be able to obtain similar insurance coverage in the future, and the extent to which we can recover under our insurance policies for damages sustained at our operating properties in the event of inclement weather and casualty events, all could adversely affect our business