In SEC Filings, Churchill Downs Describes How It’s Winning Big in Oregon

Anybody who glanced at the Oregon secretary of state’s audit of the Oregon Racing Commission released Aug. 9 would find the same conclusion that WW reached in a cover story earlier this year (“Track Addicts,” May 17, 2023). The commission provides “limited oversight and transparency” and generates in state revenue only a fraction of 1% of the billions of dollars in bets it handles.

Not included in the audit: two facts gleaned from the U.S. Securities and Exchange Commission filings of Churchill Downs Inc., the largest internet betting company active in Oregon (it handled about $2.5 billion in bets in 2022), that show what suckers Oregonians are. Churchill Downs, based in Louisville, Ky., runs the Kentucky Derby—but has found a sure thing in the online betting facilitated by Oregon state officials who ask for nearly nothing in return.

The business, which the company conducts in Oregon via its TwinSpires subsidiary, provides a far higher return on the company’s assets than its other businesses: horse racing and casinos. Internet betting provided about a 40% return on assets, four times the return on horse racing and nearly twice the return on casinos.

Of its three business segments, TwinSpires pays a far lower percentage of its revenues in “taxes and purses”—about 6%—than do Churchill Downs’ horse racing and casino businesses, which pay out an average of 30%.

“TwinSpires is one of the largest and most profitable legal online horse racing wagering platforms in the U.S.,” the company boasted in its 2022 annual report.

State Rep. David Gomberg (D-Otis), a leading critic of the Racing Commission, says the current setup is doubly troubling: “We’re incentivizing gambling, and Oregonians get next to nothing for it.”