One of the biggest upset stories in sports happened over the weekend, and it wasn’t from one of the four major North American sports. Here’s a publicly traded company that could stand to benefit.
What Happened: Longshot Rich Strike won the 148th Kentucky Derby Saturday with odds of 80-1 to win the race. The horse became the second-biggest longshot to ever win the race, trailing only Donerail (1913), who won with odds of 91-1.
The race took place at Churchill Downs Racetrack, which is owned by publicly traded Churchill Downs Incorporated (NASDAQ:CHDN).
Churchill Downs Inc reported that 147,294 fans attended the race.
Wagering on the 2022 Kentucky Derby Day program hit an all-time record high of $273.8 million, a total that was up 9% from a previous record of $250.9 million set in 2019. Wagering on the Kentucky Derby race hit $179.0 million (also an all-time record), up 8% from a prior record of $166.5 million in 2019 and was up 15% from last year’s race.
Churchill Downs owned TwinSpires unit had $67.4 million in wagering on the Kentucky Derby Day program Saturday, setting a new record. TwinSpires' betting handle of $44 million on the Kentucky Derby race was an increase of 8% over a record set on last year’s race.
“We are deeply grateful to all our fans of the Kentucky Derby around the world who once again made this an amazing and memorable experience,” Churchill Downs Inc CEO Bill Carstanjen said.
Related Link: Is Churchill Downs A Buy Ahead Of The 2021 Kentucky Derby?
Why It’s Important: Strong attendance and betting handle at the annual race are important to Churchill Downs Inc. Last year’s race saw capacity limited to around 50% of reserved seats and a limited amount of infield seats due to continued COVID-19 pandemic concerns.
The horse racing sector went through a scandal filled season in 2021 with Kentucky Derby winner Medina Spirit disqualified. Legendary horse trainer Bob Baffert was also handed a suspension from horse racing that included missing the 2022 Kentucky Derby.
The 2020 Kentucky Derby featured no fans due to the pandemic, and also saw the race pushed from its normal spring slot to the month of September. In 2019, the race also saw a disqualification due to interference by winner Maximum Security. The decision took 22 minutes to reach, and runner-up Country House was named the winner.
Strong betting handle on the Kentucky Derby along with a perfect longshot storyline could increase viewership and betting handle on 2022 races.
People love hearing stories of longshots and Saturday’s is one of the best feel-good stories in recent memory for the sport of horse racing. Rich Strike wasn’t in the original field of 20 horses for the Kentucky Derby, and only got in when two other horses scratched.
Action Network reporter Darren Rovell shared that a bettor from Minnesota hit a $1 superfecta, predicting the top four finishing horses in order for the Kentucky Derby. The $1 bet paid out $321,500. Another tweet from Rovell showed that a family won $30,000 by picking horses based on their kids. These are the betting stories the public loves hearing and often get attached to.
Rich Strike was claimed by owner Rick Dawson less than one year ago for $30,000. This was the second-lowest price paid for a horse that went on to win the Kentucky Derby.
The 2022 Kentucky Derby aired on NBC, a unit of Comcast Corporation (NASDAQ:CMCSA). The channel will be the home of the two remaining legs of the 2022 Triple Crown. NBC will air the Preakness Stakes on May 21 and the Belmont Stakes on June 4. Both races could have strong viewership and betting handle, with more people falling in love with longshot winner Rich Strike.
Financials: Churchill Downs Inc reported first quarter revenue of $364.1 million, a total that beat analysts’ estimates, according to data from Benzinga Pro.
The company has beat revenue estimates from analysts in seven of the last eight quarters, and beaten earnings per share estimates from analyst in seven of the last eight quarters. Record betting handle in the company’s biggest quarter could go a long way to helping beat estimates and keep forward momentum going for Churchill Downs Inc.
Last year’s second quarter saw revenue of $515.1 million for the company.
Price Action: Churchill Downs Inc shares are down 5.7% to $189.50 on Monday, versus a 52-week range of $175.01 to $262.60.
Photo: Courtesy of Roderick Eime on Flickr
