1 00:00:00,480 --> 00:00:04,240 Speaker 1: This is Bloomberg Business of Sports. The cold heart truth 2 00:00:04,280 --> 00:00:08,000 Speaker 1: about the Olympic journey is not really been financially incentivized 3 00:00:08,039 --> 00:00:10,480 Speaker 1: in the same way that many of the profession sports are. 4 00:00:10,600 --> 00:00:13,399 Speaker 1: But this is a basketball involved the dB A, will 5 00:00:13,480 --> 00:00:16,640 Speaker 1: bolls are licensing arm think for fifty All of those 6 00:00:16,640 --> 00:00:19,600 Speaker 1: things will make up what that looks like money in sports. 7 00:00:19,680 --> 00:00:21,640 Speaker 1: It's one of the reasons why I enjoy being on 8 00:00:21,920 --> 00:00:23,840 Speaker 1: Money Night Countdown and talk about some of the more 9 00:00:23,880 --> 00:00:27,360 Speaker 1: interesting aspects of business of sports. When you're talking sports, 10 00:00:27,440 --> 00:00:30,920 Speaker 1: discipline is the bridge from being good to ultimately being 11 00:00:31,040 --> 00:00:33,280 Speaker 1: great at whatever it is that you're trying to be 12 00:00:33,320 --> 00:00:36,840 Speaker 1: your accomplished as your profession. Bloomberg Business of Sports from 13 00:00:36,880 --> 00:00:40,879 Speaker 1: Bloomberg Radio. This is the Bloomberg Business of Sports. Hi, 14 00:00:40,920 --> 00:00:43,120 Speaker 1: everyone on Mike Lynch and we are thrilled today to 15 00:00:43,200 --> 00:00:47,240 Speaker 1: have Churchill down CEO Phil car stangin What a week 16 00:00:47,280 --> 00:00:50,040 Speaker 1: it is every week there's nothing like any place else 17 00:00:50,040 --> 00:00:51,720 Speaker 1: on the planet. Phil, Welcome to the show. Great to 18 00:00:51,720 --> 00:00:53,760 Speaker 1: have you with us. Thanks fight, It's great to be here. 19 00:00:54,080 --> 00:00:56,480 Speaker 1: All right. So it's the CEO. Do you get goose 20 00:00:56,480 --> 00:00:58,880 Speaker 1: bumps like other people do? I mean, going into this week, 21 00:00:59,440 --> 00:01:03,400 Speaker 1: I still do. I it's a busy week, but it's 22 00:01:03,400 --> 00:01:05,920 Speaker 1: a labor of love, so I'm as excited as most 23 00:01:05,959 --> 00:01:09,760 Speaker 1: of the fans. So yeah, I get goose bumps. I 24 00:01:09,840 --> 00:01:12,040 Speaker 1: love doing what I do, and that's true for most 25 00:01:12,080 --> 00:01:14,679 Speaker 1: of our team. This is this is a lot of fun, 26 00:01:15,080 --> 00:01:16,520 Speaker 1: a lot of work, but a lot of fun, and 27 00:01:16,520 --> 00:01:18,840 Speaker 1: it always feels it always feels good when it comes 28 00:01:18,880 --> 00:01:22,760 Speaker 1: off successfully. I know the work for Derby probably started 29 00:01:22,840 --> 00:01:26,880 Speaker 1: within an hour after Derby. What's on your checklist going 30 00:01:26,880 --> 00:01:29,479 Speaker 1: into the final few days before post on? So many 31 00:01:29,480 --> 00:01:31,839 Speaker 1: things on the front side, it's just making sure people 32 00:01:31,880 --> 00:01:34,080 Speaker 1: can get in and out of the facility, make sure 33 00:01:34,240 --> 00:01:37,560 Speaker 1: we have all the people we need to to provide 34 00:01:37,600 --> 00:01:41,360 Speaker 1: the service that our that our guests expect, making sure 35 00:01:41,440 --> 00:01:44,920 Speaker 1: the horses are here, that they're being monitored, that they're safe, 36 00:01:45,040 --> 00:01:48,240 Speaker 1: that they're ready to go. Trying to control just about 37 00:01:48,280 --> 00:01:50,920 Speaker 1: everything we can think of to control, and trying not 38 00:01:51,000 --> 00:01:53,800 Speaker 1: to worry about the thing we can't control, which is 39 00:01:53,800 --> 00:01:56,680 Speaker 1: always the weather. We we we we run an outdoor event, 40 00:01:56,880 --> 00:01:59,520 Speaker 1: so a lot of our guests are undercover. They're in 41 00:01:59,640 --> 00:02:03,360 Speaker 1: nice areas, high end areas, but ultimately this is an 42 00:02:03,360 --> 00:02:05,280 Speaker 1: outdoor event, and the and the horses run in the 43 00:02:05,360 --> 00:02:07,560 Speaker 1: rain or the shine, and a lot of our guests 44 00:02:07,960 --> 00:02:11,520 Speaker 1: by general admission passes, so they're out there. They take 45 00:02:11,560 --> 00:02:14,280 Speaker 1: the weather as it comes, and as much as over 46 00:02:14,320 --> 00:02:17,160 Speaker 1: the years, you try to learn to not be concerned 47 00:02:17,200 --> 00:02:20,080 Speaker 1: about things you can't control. Just prepare for whatever to happen. 48 00:02:20,440 --> 00:02:22,400 Speaker 1: That's always the thing. In the last twenty four hours 49 00:02:22,440 --> 00:02:24,480 Speaker 1: we talk about the most, but I guess that means 50 00:02:24,520 --> 00:02:26,320 Speaker 1: also we've we've gotten all the things we need to 51 00:02:26,360 --> 00:02:28,519 Speaker 1: get done. There's gonna be a different vibe this year 52 00:02:28,560 --> 00:02:31,160 Speaker 1: because of COVID. Last year, I think your capacity was 53 00:02:31,200 --> 00:02:36,600 Speaker 1: maxed out at what are you expecting for this derby? 54 00:02:36,960 --> 00:02:39,920 Speaker 1: We're going to be back to uh to pre COVID 55 00:02:40,200 --> 00:02:43,600 Speaker 1: protocols and expectations, So I I think a good number 56 00:02:43,639 --> 00:02:47,560 Speaker 1: to think of for our event is around one fifty. 57 00:02:47,720 --> 00:02:49,519 Speaker 1: If I had to take the under the over, I 58 00:02:49,840 --> 00:02:54,280 Speaker 1: take the over on that. So we're expecting a full 59 00:02:54,320 --> 00:02:57,960 Speaker 1: house with the with the enthusiasm and the excitement that 60 00:02:57,960 --> 00:03:01,040 Speaker 1: that we've seen every year up through two thousand nineteen. 61 00:03:01,080 --> 00:03:02,919 Speaker 1: We had a bit of a disruption, as the rest 62 00:03:02,960 --> 00:03:05,560 Speaker 1: of the country did because of COVID, but I you know, 63 00:03:05,639 --> 00:03:07,920 Speaker 1: being on the ground here living in this community like 64 00:03:08,000 --> 00:03:12,399 Speaker 1: I do. I've never seen it more excited and more 65 00:03:12,440 --> 00:03:17,040 Speaker 1: intense and more focused on the Derby than than now. So, um, 66 00:03:17,080 --> 00:03:18,800 Speaker 1: I think we're gonna be looking at big numbers. And 67 00:03:18,960 --> 00:03:21,640 Speaker 1: I said on our earnings called a week or so ago, 68 00:03:22,280 --> 00:03:26,000 Speaker 1: I think we're looking at setting all of the financial metrics. 69 00:03:26,960 --> 00:03:29,560 Speaker 1: Attendance at the end of the day is impacted a 70 00:03:29,560 --> 00:03:32,720 Speaker 1: little bit because we always have a fair amount of 71 00:03:32,760 --> 00:03:35,160 Speaker 1: walk ups, people that make a game day decision of 72 00:03:35,200 --> 00:03:37,320 Speaker 1: whether they want to come or not, and part of 73 00:03:37,320 --> 00:03:39,800 Speaker 1: that calculus they run is what does the weather look 74 00:03:39,840 --> 00:03:41,880 Speaker 1: like that day? So if it turns out to be 75 00:03:41,960 --> 00:03:45,880 Speaker 1: strong weather, then then it'll be a gigantic crowd if 76 00:03:45,880 --> 00:03:48,000 Speaker 1: it If it turns out where we might have some rain, 77 00:03:48,600 --> 00:03:50,920 Speaker 1: and the forecast in the Ohio River Valley is always 78 00:03:50,960 --> 00:03:53,560 Speaker 1: always iffy right up to the last minute, But if 79 00:03:53,600 --> 00:03:55,920 Speaker 1: it looks like we might have some rain, then then 80 00:03:56,000 --> 00:03:58,960 Speaker 1: you see some people don't show up. But I think 81 00:03:58,960 --> 00:04:02,200 Speaker 1: we're looking at one the minimum and maybe maybe more 82 00:04:02,240 --> 00:04:04,640 Speaker 1: depending on good weather. Hey build, My co host Michael 83 00:04:04,680 --> 00:04:06,600 Speaker 1: Barrow had a little trouble getting out of the gate 84 00:04:06,680 --> 00:04:10,440 Speaker 1: when the when when the bell sounded like he's currently 85 00:04:10,480 --> 00:04:12,120 Speaker 1: in last place, but he's in the race and he's 86 00:04:12,200 --> 00:04:15,560 Speaker 1: joining us now. Michael, welcome the board. Say hi to Bill. Hi, 87 00:04:15,640 --> 00:04:18,200 Speaker 1: how are you? I threw a shoe and then everything 88 00:04:18,360 --> 00:04:20,840 Speaker 1: just win all the pieces here my day, all this 89 00:04:21,000 --> 00:04:23,480 Speaker 1: new fangled stuff. We just turned the butter. We were 90 00:04:23,520 --> 00:04:26,800 Speaker 1: happy to have it. Well, it's nice to meet you 91 00:04:26,960 --> 00:04:29,880 Speaker 1: via via telephone here, Mike, and I've been having fun 92 00:04:29,960 --> 00:04:32,839 Speaker 1: so far. Oh I've been hearing it. Thank thank you 93 00:04:32,920 --> 00:04:34,799 Speaker 1: for your patience. And I know you're on a clock. 94 00:04:34,880 --> 00:04:37,920 Speaker 1: But I do have uh something on my mind about 95 00:04:38,240 --> 00:04:41,159 Speaker 1: Churchill Down and it's the history of the track itself 96 00:04:41,760 --> 00:04:45,120 Speaker 1: that always excited me. I mean, I think of so 97 00:04:45,160 --> 00:04:49,400 Speaker 1: many of the Triple Crown winners when from secretariat winning 98 00:04:49,440 --> 00:04:52,640 Speaker 1: the first leg there, I'm affirmed I can go on 99 00:04:53,760 --> 00:04:57,640 Speaker 1: the history itself of the track. Can you tell us 100 00:04:58,040 --> 00:05:02,400 Speaker 1: what that means? And and how do you approach that 101 00:05:02,560 --> 00:05:04,520 Speaker 1: for people coming to the track to say, hey, you 102 00:05:04,520 --> 00:05:10,359 Speaker 1: see what we're all about. Sure, So this is Derby 103 00:05:10,839 --> 00:05:13,640 Speaker 1: and so the tracks started in eighteen seventy five and 104 00:05:13,760 --> 00:05:16,240 Speaker 1: ran the first Derby in eighteen seventy five and it's 105 00:05:16,279 --> 00:05:20,320 Speaker 1: been run continuously every single year since that time. So 106 00:05:20,360 --> 00:05:24,039 Speaker 1: we're the longest continually run sporting events, uh in the 107 00:05:24,120 --> 00:05:28,680 Speaker 1: United States, and our facility has changed and morphed over 108 00:05:28,760 --> 00:05:31,040 Speaker 1: the time. Over time. A lot of times when people 109 00:05:31,040 --> 00:05:33,800 Speaker 1: think of Churchill Downs, you know, it's it's a painted white, 110 00:05:34,600 --> 00:05:40,159 Speaker 1: it's got this grand um grand appearance. Uh. But but actually, 111 00:05:40,200 --> 00:05:42,359 Speaker 1: if you see a picture from eighteen seventy five, you 112 00:05:42,400 --> 00:05:44,640 Speaker 1: realize how far the facility has come and how it's 113 00:05:44,720 --> 00:05:48,960 Speaker 1: changed over time. Our most significant architectural feature is called 114 00:05:49,000 --> 00:05:52,480 Speaker 1: the Twin Spires, and that actually was built in eight 115 00:05:53,640 --> 00:05:58,440 Speaker 1: So while there are just an incredible amount of traditions 116 00:05:58,800 --> 00:06:02,839 Speaker 1: and incredible folks on everything we do that might modify 117 00:06:02,880 --> 00:06:06,880 Speaker 1: our facility or modify the tradition, one of the things 118 00:06:06,960 --> 00:06:09,240 Speaker 1: that have kept us fresh, I think over time has 119 00:06:09,240 --> 00:06:12,960 Speaker 1: been our willingness to work within these traditions, to find 120 00:06:13,000 --> 00:06:15,480 Speaker 1: new ways, to morph with the customers, to morph with 121 00:06:15,520 --> 00:06:18,400 Speaker 1: the time. I think that's actually part of the legacy 122 00:06:18,440 --> 00:06:21,039 Speaker 1: of how we've gone a hundred and forty years and 123 00:06:21,080 --> 00:06:23,160 Speaker 1: are at a place now where we're healthier than we've 124 00:06:23,200 --> 00:06:27,359 Speaker 1: ever been, super strong company, super strong results. Part of 125 00:06:27,360 --> 00:06:29,920 Speaker 1: it is our our willingness to change with our guests. 126 00:06:29,960 --> 00:06:33,320 Speaker 1: But ultimately we change anything about our facility, and we've 127 00:06:33,400 --> 00:06:36,560 Speaker 1: changed a lot. We get a lot of feedback. For example, 128 00:06:37,240 --> 00:06:39,040 Speaker 1: one time in the last ten years or so, we 129 00:06:39,040 --> 00:06:43,800 Speaker 1: were repainting the track and the version of white paint 130 00:06:43,880 --> 00:06:46,839 Speaker 1: that we've historically used was no longer available because the 131 00:06:46,839 --> 00:06:49,880 Speaker 1: manufacturer was no longer making it. So we found something 132 00:06:49,920 --> 00:06:53,039 Speaker 1: close that I couldn't tell the difference of, but it 133 00:06:53,120 --> 00:06:56,080 Speaker 1: was slightly different because we couldn't find the exact same thing, 134 00:06:56,160 --> 00:06:58,760 Speaker 1: And people notice that and wrote us letters about that. 135 00:06:59,040 --> 00:07:03,400 Speaker 1: So if we change anything, it sparks conversation and it 136 00:07:03,480 --> 00:07:08,039 Speaker 1: sparks debate. But being willing to change, being willing to 137 00:07:08,080 --> 00:07:12,760 Speaker 1: modify traditions and make new traditions, change old traditions, that's 138 00:07:12,760 --> 00:07:15,880 Speaker 1: something we have to think about because obviously we can't 139 00:07:15,960 --> 00:07:18,440 Speaker 1: run the business the way we do now like we 140 00:07:18,480 --> 00:07:20,960 Speaker 1: did in eight seventy five. It's got to change with 141 00:07:21,000 --> 00:07:25,600 Speaker 1: our guests. But we take that very very seriously. And 142 00:07:25,640 --> 00:07:28,560 Speaker 1: when you work at Churchill Downs sometimes you feel like 143 00:07:28,600 --> 00:07:31,000 Speaker 1: you work for a public institution. You feel like you 144 00:07:31,280 --> 00:07:35,160 Speaker 1: work for something that's owned by by the citizens, and 145 00:07:35,280 --> 00:07:37,320 Speaker 1: it's not a private company in our case where a 146 00:07:37,320 --> 00:07:41,600 Speaker 1: publicly traded company, but you feel like it's a national treasure, 147 00:07:42,120 --> 00:07:45,080 Speaker 1: and you have this higher obligation to to make sure 148 00:07:45,120 --> 00:07:48,640 Speaker 1: you listen and reflect the views of the community. And 149 00:07:48,640 --> 00:07:50,840 Speaker 1: at first that sometimes can be a bit you know, 150 00:07:50,880 --> 00:07:53,040 Speaker 1: it can be a bit overwhelming because you hear so 151 00:07:53,040 --> 00:07:55,520 Speaker 1: many voices, But learning to listen to those voices and 152 00:07:55,560 --> 00:07:59,480 Speaker 1: categorize the different views are part of what ultimately one 153 00:07:59,480 --> 00:08:00,960 Speaker 1: of the ways, one of the reasons the job is 154 00:08:01,000 --> 00:08:03,760 Speaker 1: so much fun. Working here for everybody is so much fun. 155 00:08:04,040 --> 00:08:09,960 Speaker 1: Bill record the first quarter for the company up million dollars, 156 00:08:10,040 --> 00:08:12,880 Speaker 1: up about twenty million dollars coming out of COVID. How 157 00:08:12,920 --> 00:08:15,360 Speaker 1: were you able to wreck up numbers like that? Well, 158 00:08:15,480 --> 00:08:20,280 Speaker 1: we um like everybody COVID where we're a customer facing business, 159 00:08:20,280 --> 00:08:23,520 Speaker 1: so so like most customer facing businesses, we were really 160 00:08:23,560 --> 00:08:29,520 Speaker 1: impacted by COVID. For example, the Derby we ran without fans. 161 00:08:30,280 --> 00:08:32,640 Speaker 1: One we ran at fifty thousand, when this year we 162 00:08:32,640 --> 00:08:35,360 Speaker 1: expect a hundred and fifty thousand. The Kentucky Derby and 163 00:08:35,400 --> 00:08:37,840 Speaker 1: Churchill Downs Racetrack is just one leg of a of 164 00:08:37,880 --> 00:08:41,400 Speaker 1: a three legged stool that represents the foundation of our company. 165 00:08:41,440 --> 00:08:45,800 Speaker 1: Were also one of the largest and most successful regional 166 00:08:45,880 --> 00:08:48,160 Speaker 1: casino companies in the United States, and we also have 167 00:08:48,200 --> 00:08:52,720 Speaker 1: a very large online gaming business. So coming out of COVID, 168 00:08:52,800 --> 00:08:55,240 Speaker 1: we we tried to make sure we believe COVID would 169 00:08:55,320 --> 00:08:58,000 Speaker 1: would subside. We tried to make sure we invested through COVID. 170 00:08:58,320 --> 00:09:00,240 Speaker 1: We have a very very good balance sheet, so we 171 00:09:00,320 --> 00:09:04,880 Speaker 1: kept our projects rolling and then as the restrictions started 172 00:09:04,880 --> 00:09:08,040 Speaker 1: to fade, we we just went right back at it 173 00:09:08,320 --> 00:09:10,480 Speaker 1: and some of the growth that was in the pipeline 174 00:09:10,480 --> 00:09:13,360 Speaker 1: that was being developed when COVID happened, we kept working 175 00:09:13,360 --> 00:09:15,280 Speaker 1: on it and it started to deliver as as we 176 00:09:15,360 --> 00:09:18,439 Speaker 1: came out of COVID. But ultimately, our relationship with our 177 00:09:18,480 --> 00:09:22,199 Speaker 1: guests and our and our brand with our guests is 178 00:09:22,240 --> 00:09:24,520 Speaker 1: a powerful one that's been around for a long time. 179 00:09:25,040 --> 00:09:28,920 Speaker 1: Bill tell us about this Peninsula Pacific Entertainment and and 180 00:09:29,040 --> 00:09:32,560 Speaker 1: what it's meant to the company. Yeah. So, Peninsula Pacific 181 00:09:33,120 --> 00:09:39,000 Speaker 1: a really impressive regional gaming company, a tremendous asset in 182 00:09:39,080 --> 00:09:42,480 Speaker 1: New York called Del Lago, a hard rock casino in Iowa, 183 00:09:43,080 --> 00:09:45,640 Speaker 1: and then a great footprint in the state of Virginia. 184 00:09:46,160 --> 00:09:49,280 Speaker 1: It's a two and a half billion dollar transaction. We're 185 00:09:49,280 --> 00:09:52,480 Speaker 1: acquiring a hundred percent of it. That's a big deal. 186 00:09:52,520 --> 00:09:54,120 Speaker 1: In these times and that's a big deal in the 187 00:09:54,120 --> 00:09:58,000 Speaker 1: casino in the casino space. So our deal is signed. 188 00:09:58,080 --> 00:10:00,959 Speaker 1: Were now in the process of getting gaming approvals and 189 00:10:01,000 --> 00:10:04,640 Speaker 1: those three jurisdictions. We expect to close it by the 190 00:10:04,760 --> 00:10:06,080 Speaker 1: end of the year. We may be able to close 191 00:10:06,160 --> 00:10:07,839 Speaker 1: it earlier than that, but it's really in the hands 192 00:10:07,840 --> 00:10:10,800 Speaker 1: of the of the state gaming authorities in each of 193 00:10:10,840 --> 00:10:14,800 Speaker 1: those jurisdictions, and for us, it gives us three great 194 00:10:14,840 --> 00:10:18,880 Speaker 1: new states. But also are you know our our m O. 195 00:10:19,040 --> 00:10:22,400 Speaker 1: What we've been very very good at is not just acquisitions, 196 00:10:22,440 --> 00:10:25,920 Speaker 1: but green fields and the opportunity in Virginia to build 197 00:10:25,920 --> 00:10:29,440 Speaker 1: out the Dumfrieze facility, which is which is about an 198 00:10:29,480 --> 00:10:33,320 Speaker 1: hour south of d C and some of the regional 199 00:10:33,440 --> 00:10:36,120 Speaker 1: smaller facilities they are allowed to build within the state 200 00:10:36,200 --> 00:10:39,880 Speaker 1: up to ten That that's uh, that's our bread and 201 00:10:39,920 --> 00:10:42,960 Speaker 1: butter and we think it'll it'll add to our growth 202 00:10:43,280 --> 00:10:46,079 Speaker 1: trajectory over the next three to five years at at 203 00:10:46,120 --> 00:10:50,800 Speaker 1: a pretty impressive pace. So um, that's that's a business. 204 00:10:50,840 --> 00:10:54,800 Speaker 1: We were watching develop long standing relationship with their CEO 205 00:10:54,920 --> 00:10:58,200 Speaker 1: and senior management and we just got a great opportunity. 206 00:10:58,240 --> 00:11:02,200 Speaker 1: They're always out there and reason gaming in particular. They're 207 00:11:02,280 --> 00:11:06,120 Speaker 1: they're always there. They're always great projects that that would 208 00:11:06,160 --> 00:11:08,640 Speaker 1: fit with our company. And while a lot of people 209 00:11:08,679 --> 00:11:11,439 Speaker 1: think Churchill Downs, they think of horse racing, they think 210 00:11:11,440 --> 00:11:13,880 Speaker 1: of the Kentucky Derby, and that is our crown jewel. 211 00:11:14,520 --> 00:11:17,360 Speaker 1: That is the thing that makes us most special. We 212 00:11:17,480 --> 00:11:22,520 Speaker 1: also are a leading gaming company, a leading casino count company, 213 00:11:22,559 --> 00:11:24,319 Speaker 1: and we've just found a lot of growth over the 214 00:11:24,400 --> 00:11:28,040 Speaker 1: last decade in in that segment of our of our 215 00:11:28,240 --> 00:11:33,160 Speaker 1: of our our business lines. As a guy who has 216 00:11:33,200 --> 00:11:35,600 Speaker 1: been known to put a penny or two in some 217 00:11:35,679 --> 00:11:40,880 Speaker 1: gambling joints, how would this work in terms of the 218 00:11:40,960 --> 00:11:46,360 Speaker 1: online set up for betting on the Kentucky Derby, Because 219 00:11:46,760 --> 00:11:51,280 Speaker 1: ordinarily the the online betting houses would set the odds, 220 00:11:51,880 --> 00:11:55,000 Speaker 1: but you are the guys setting the odds for the horses. 221 00:11:55,240 --> 00:11:58,760 Speaker 1: As the betting comes in and it evolves, how does 222 00:11:58,800 --> 00:12:02,800 Speaker 1: all of that work. That's a really great question. Of 223 00:12:02,840 --> 00:12:07,400 Speaker 1: horse racing is completely different as a gambling game than 224 00:12:07,520 --> 00:12:10,640 Speaker 1: all of the other sports wagering activity in the United States, 225 00:12:11,160 --> 00:12:13,280 Speaker 1: and it's and it's different in a couple of respects. 226 00:12:13,800 --> 00:12:17,040 Speaker 1: To start with, from a from a legal perspective, Congress 227 00:12:17,040 --> 00:12:20,280 Speaker 1: passed the bill in eight, which they updated in two 228 00:12:20,280 --> 00:12:26,360 Speaker 1: thousand one that allowed cross state line gambling on horse racing. 229 00:12:26,600 --> 00:12:29,000 Speaker 1: So and then that's just the historical thing. Horse racing 230 00:12:29,040 --> 00:12:31,080 Speaker 1: has been around forever and betting has always been a 231 00:12:31,120 --> 00:12:35,000 Speaker 1: part of it. So we've actually been on the internet 232 00:12:35,400 --> 00:12:37,640 Speaker 1: taking wagers on horse racing for a long time and 233 00:12:38,000 --> 00:12:40,880 Speaker 1: it's a it's an important part of our of our 234 00:12:40,920 --> 00:12:43,360 Speaker 1: business lines. It's something we've had a lot of success doing. 235 00:12:43,800 --> 00:12:46,680 Speaker 1: So that's one way that horse racing has a gambling 236 00:12:46,720 --> 00:12:49,680 Speaker 1: game has been different than other sports. The other way 237 00:12:49,679 --> 00:12:51,960 Speaker 1: that it's been different, and again this goes back to 238 00:12:52,120 --> 00:12:56,480 Speaker 1: his history. We are we are a former waging called paramutual, 239 00:12:56,559 --> 00:12:59,880 Speaker 1: which means that that's a French concept that means you 240 00:13:00,040 --> 00:13:03,120 Speaker 1: bet amongst yourself. So when you're betting on a horse race, 241 00:13:03,160 --> 00:13:08,720 Speaker 1: you're betting into a worldwide, global virtual pool against all 242 00:13:08,760 --> 00:13:11,640 Speaker 1: the other players who are also betting that race. So 243 00:13:11,760 --> 00:13:15,680 Speaker 1: ultimately the odds are actually set by you all the players. 244 00:13:16,280 --> 00:13:18,720 Speaker 1: We are the house, and we take a raak, We 245 00:13:18,840 --> 00:13:21,880 Speaker 1: take a cut. So people say to me all the time, 246 00:13:21,960 --> 00:13:24,440 Speaker 1: while you really took my money or I really took 247 00:13:24,480 --> 00:13:28,479 Speaker 1: your money yesterday at the track. Well, actually we're completely 248 00:13:28,520 --> 00:13:31,920 Speaker 1: indifferent to who wins. You're never betting against the house. 249 00:13:32,000 --> 00:13:34,760 Speaker 1: You're betting against the other players, and the odds are 250 00:13:35,360 --> 00:13:39,280 Speaker 1: pure reflection of how much money people put on each 251 00:13:39,280 --> 00:13:42,480 Speaker 1: horse relative to the money put on the other horses. 252 00:13:42,880 --> 00:13:45,280 Speaker 1: So that's different than sports wagering. If you take one 253 00:13:45,280 --> 00:13:48,280 Speaker 1: of your your Boston teams, if if you lay down 254 00:13:48,280 --> 00:13:51,840 Speaker 1: a bet on the red Sox, ultimately, technically what's happening 255 00:13:51,920 --> 00:13:55,760 Speaker 1: is you're betting against the house. So the gambling site 256 00:13:55,800 --> 00:13:59,400 Speaker 1: takes the other end of that transaction, and they may 257 00:13:59,440 --> 00:14:02,840 Speaker 1: they may lay off that bet by other players who 258 00:14:02,840 --> 00:14:05,400 Speaker 1: take the other side of the transaction, or by just 259 00:14:05,520 --> 00:14:09,679 Speaker 1: balancing their books in general across across the country, But ultimately, 260 00:14:09,760 --> 00:14:12,840 Speaker 1: for each individual bet, you're betting against the house, and 261 00:14:12,880 --> 00:14:16,679 Speaker 1: that's different for paramut for paramutual um. You tell me 262 00:14:16,720 --> 00:14:18,560 Speaker 1: the amount that's going to be wagered on derby Day, 263 00:14:18,600 --> 00:14:20,440 Speaker 1: and I can tell you how exactly how much money 264 00:14:20,520 --> 00:14:24,320 Speaker 1: we're going to make, because our margins on that transaction 265 00:14:24,360 --> 00:14:27,280 Speaker 1: are the same no matter uh, no matter who wins 266 00:14:27,280 --> 00:14:30,720 Speaker 1: the bet, whether the long shot, the fifty to one wins, 267 00:14:30,800 --> 00:14:33,600 Speaker 1: or whether the prohibitive favorite wins, I can tell you 268 00:14:33,640 --> 00:14:35,680 Speaker 1: exactly how much money we're going to make on that 269 00:14:36,000 --> 00:14:38,280 Speaker 1: because we're just taking a piece off the top. The 270 00:14:38,320 --> 00:14:41,200 Speaker 1: players are betting against each other. Hey, Bill, I know 271 00:14:41,240 --> 00:14:43,800 Speaker 1: we've got about thirty seconds left here, and you have 272 00:14:43,880 --> 00:14:47,040 Speaker 1: to be excited about your final capital improvement project, which 273 00:14:47,240 --> 00:14:51,600 Speaker 1: involves the paddock. You want to quickly tell us about that. Yeah, 274 00:14:51,680 --> 00:14:55,000 Speaker 1: back to back to the idea of Hey, we're gonna 275 00:14:55,040 --> 00:14:58,440 Speaker 1: be a hundred and fifty years old, uh this time 276 00:14:58,480 --> 00:15:01,360 Speaker 1: in two years, and they're a lot that goes into 277 00:15:01,520 --> 00:15:05,360 Speaker 1: maintaining those traditions, but we also have to continuously reinvent 278 00:15:05,400 --> 00:15:09,080 Speaker 1: ourselves to be relevant for our guests. So the paddock 279 00:15:09,080 --> 00:15:12,920 Speaker 1: of Churchill Downs really have a footprint that was designed 280 00:15:12,920 --> 00:15:16,360 Speaker 1: in and not redesigned since it may have been added 281 00:15:16,360 --> 00:15:19,840 Speaker 1: to and subtracted to, but we're going to completely redo it. 282 00:15:20,280 --> 00:15:24,040 Speaker 1: We want people to walk into our facility, see the paddock, 283 00:15:24,200 --> 00:15:27,640 Speaker 1: see the horses, see the twins spires, and we're really 284 00:15:27,680 --> 00:15:33,040 Speaker 1: gonna build a series of terraces and seating options and 285 00:15:33,200 --> 00:15:35,440 Speaker 1: cool things you won't find anywhere else in the United 286 00:15:35,480 --> 00:15:39,720 Speaker 1: States to enhance our customers experience, all centered around the 287 00:15:39,760 --> 00:15:42,920 Speaker 1: most important part of Churchill Downs, which is the paddock. 288 00:15:43,160 --> 00:15:46,120 Speaker 1: Other than the race track, which is the paddock where 289 00:15:46,160 --> 00:15:49,120 Speaker 1: you watch the horses saddle up and you watch the 290 00:15:49,720 --> 00:15:52,480 Speaker 1: horses parade and where you get to pick you know 291 00:15:52,480 --> 00:15:54,560 Speaker 1: who you think is gonna win the race. So that's 292 00:15:54,600 --> 00:15:58,000 Speaker 1: the heartbeat of Churchill Downs Racetrack and it hasn't been 293 00:15:58,000 --> 00:16:01,320 Speaker 1: reinvented in well over a hud years. And so we 294 00:16:01,360 --> 00:16:03,360 Speaker 1: have a two hundred million dollar project that will be 295 00:16:03,400 --> 00:16:07,480 Speaker 1: ready just in time for Kentucky Derby one fifty, which 296 00:16:07,520 --> 00:16:11,960 Speaker 1: is the first Saturday in May um and it will 297 00:16:12,000 --> 00:16:15,040 Speaker 1: reinvent our facility for we hope, the next one hundred 298 00:16:15,040 --> 00:16:17,480 Speaker 1: plus years. So we need to do something big and 299 00:16:17,520 --> 00:16:21,440 Speaker 1: bold for Derby one fifty. And I'm pretty I'm pretty 300 00:16:21,480 --> 00:16:24,880 Speaker 1: satisfied and convinced that we're gonna we're gonna meet that 301 00:16:25,040 --> 00:16:30,640 Speaker 1: very high standard. Bill Kristangian, Chief Executive Officer, Churchhill Downs. 302 00:16:31,080 --> 00:16:33,880 Speaker 1: If we were horses Lynch, she would be secretariat. I 303 00:16:33,880 --> 00:16:38,080 Speaker 1: would be Mr Ed. Thank you so much for joining us, 304 00:16:38,400 --> 00:16:41,760 Speaker 1: and thank you for your patience. I appreciate it. Thanks 305 00:16:41,840 --> 00:16:45,400 Speaker 1: very much, Happy Derby, Thanks, thank you. This has been 306 00:16:45,440 --> 00:16:49,400 Speaker 1: the Bloomberg business of sports podcasting. We're here every Monday, 307 00:16:49,480 --> 00:16:52,920 Speaker 1: Wednesday and Thursday talking to some of the biggest players 308 00:16:52,920 --> 00:16:55,240 Speaker 1: in the world of sports and some of the biggest issues. 309 00:16:55,320 --> 00:16:58,120 Speaker 1: I'm Michael Laaren and I'm Mike Lynch. You can find 310 00:16:58,160 --> 00:17:01,880 Speaker 1: me on Twitter at Big Bar Sports and you can 311 00:17:01,880 --> 00:17:04,760 Speaker 1: find me at Lynchy w CVB and Don't Forget. You 312 00:17:04,760 --> 00:17:07,840 Speaker 1: can download this show wherever you get your podcasts.