TIVP055: CHURCHILL DOWNS, INC. (CHDN): INVESTING IN THE GREATEST TWO MINUTES IN SPORTS

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

TIVP055: CHURCHILL DOWNS, INC. (CHDN): INVESTING IN THE GREATEST TWO MINUTES IN SPORTS W/ SHAWN O’MALLEY & DANIEL MAHNCKE

18 January 2026

Shawn O’Malley and Daniel Mahncke break down Churchill Downs, Inc. (ticker: CHDN), a gaming company that is uniquely tied to the world of horse racing. Every year, for more than 150 years, they’ve proudly hosted the Kentucky Derby, an event that draws in the equivalent of 5 Super Bowls’ worth of attendees over the course of a week. 

In this episode, you’ll learn about how to value gambling businesses, how Churchill Downs has grown a broader gaming business around the Kentucky Derby, what makes the Kentucky Derby such a special trophy asset, how management is betting on the popularity of historical racing machines (slot machines for horse races), and whether Churchill Downs’ stock is attractively priced at current levels, plus so much more!

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IN THIS EPISODE, YOU’LL LEARN:

  • Why Churchill Downs is so much more than just a gambling company
  • What makes the Kentucky Derby such a cherished event and a masterclass on luxury hospitality
  • What to make of the surge in historical racing machines that are powering the company’s growth
  • How the company has used its relationships and lobbying powers to protect its business and even lower its taxes
  • Why Churchill Downs is such an asset-heavy business
  • The risks and moats of entrenched gambling businesses
  • What the future of horse racing looks like
  • Why Churchill Downs gave up on mobile-app-based casino gaming
  • How to think about modeling CHDN’s intrinsic value
  • Whether Shawn and Daniel add CHDN to their Intrinsic Value Portfolio
  • And much, much more!

Disclosure: This episode and the resources on this page are for informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. For full disclosures, see link.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Shawn O’Malley: We’ve come across a handful of really cool trophy assets on the show, but most of the time the associated business is barely even profitable.

[00:00:09] Daniel Mahncke: We saw that with Manchester United and Madison Square Garden Sports, and yet you’re telling me that there is an event that occurs once a year that is an exception to this rule.

[00:00:19] Shawn O’Malley: That’s exactly what I’m saying, behind the famous Kentucky Derby race in all its pageantry, which attracts something five times, the number of attendees as a Super Bowl over the course of a week is a gambling empire owned by Churchill Downs Incorporated, and the company is well, a trophy asset holder and profitable compounder.

[00:00:43] Intro: You are listening to The Intrinsic Value Podcast by The Investor’s Podcast Network since 2014, with over 180 million downloads. We’ve learned directly from the world’s best investors. Now we are applying those lessons to analyze businesses and investment opportunities every week, helping you uncover intrinsic value. And now here are your hosts, Shawn O’Malley and Daniel Mahncke.

[00:01:14] Daniel Mahncke: Today we are off to the races and no, it’s not because we are covering Ferrari once again. It’s because Shawn is pitching Churchill Downs, ticker, CHDN. And this is at its score, a gambling company you might say, which may immediately rub some listeners the wrong way, but at the same time, you could argue it is equally as much hospitality and even an events business.

[00:01:37] Daniel Mahncke: The company’s crown jewel is the beloved Kentucky Derby horse race Bonanza that as a German, I had somehow never heard of before until Shawn made me aware of just how widely popular the two minute race and associated festivities are in the US. And as far as I understand it, not unlike Formula One races or the Super Bowl, the Kentucky Derby is more of a cultural event and a party for the wealthy than it is simply a sporting event.

[00:02:04] Daniel Mahncke: But before I let you take it from me, Shawn, I should mention that nothing on this show as always is meant to be taken as financial advice. It’s only meant for educational and entertainment purposes. And I should also mention that we are welcoming our fourth Copart of members into the Intrinsic Value Community, which is a special group of investors we have cultivated over the last year.

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