Kentucky Derby to Run Without Fans, Financial Impact Expected for Churchill Downs
Posted on: August 22, 2020, 09:45h.
Last updated on: August 24, 2020, 01:07h.
The Kentucky Derby is still a go. But on Friday, Churchill Downs officials announced the famous horse race will be run without fans for the first time in its 146-year history.
Back in March, when the coronavirus pandemic first hit the US, the Louisville track announced it would move the race from its traditional first Saturday in May date to Sept. 5. Less than two weeks ago, track officials received approval from Kentucky Gov. Andy Beshear (D) to hold the races that day with limited attendance, capping capacity at around 23,000. That’s about a seventh of the record crowd of 170,513 that watched the 2015 running of the premier race for 3-year old thoroughbreds.
However, since that announcement, COVID-19 cases continued to increase in Louisville. The positivity rate in Louisville, which was just 2 percent in June, had climbed to 10 percent this week, according to Norton Healthcare, a major provider in the Louisville area.
With Louisville being tabbed a ‘Red Zone’ city by the CDC earlier this week, we just felt that we could not responsibly bring in 23,000 fans to the facility for the Derby,” track President Kevin Flanery told reporters Friday afternoon.
While disappointed, state and local leaders hailed the track’s decision. It’s similar to the one made three weeks ago for Sunday’s Indianapolis 500, where an increase in cases there prompted Indianapolis Motor Speedway officials to keep fans away.
Churchill Downs still plans to run live racing on Derby Week, beginning Sept. 1. The Kentucky Oaks, the top race for 3-year-old fillies, will still run on Sept. 4.
Derby Week Big for Bottom Line
Derby Week is a showcase event not just for Churchill Downs the track, but for the parent company as well.
The week features a series of high-profile races, most notably the Derby and the Oaks, and it also features the largest crowds Churchill will host that year. Not only do large crowds mill about the infield and paddock areas, but thousands also buy reserved seats to the races.
According to investor presentations, there are about 60,000 premium reserve seats that are the biggest revenue generator for the track during the week. And last year, Derby Week produced earnings before interest, taxes, depreciation, and amortization (EBITDA) of $5.4 million, more than 1 percent of the company’s total EBITDA of $451.4 million, which was generated across the company’s casinos, tracks, and other holdings.
But Flanery told reporters that once they realized the best case scenario would involve reduced attendance, the 2020 Kentucky Derby wasn’t going to be the same, either financially or in other ways.
“We really have been not focused on that piece for quite a while, and just saying, ‘How can we do it in a way that pays tribute to the great city that we live in and to the horsemen?’” Flanery said. “It’s not just us. The pandemic has hit everybody across the globe, and we’re doing our best to keep things moving forward in the rules and in the moment.”
From a betting perspective, last year’s Derby card produced a record handle of $250.9 million, with $165.5 million of that bet on the Derby itself. However, just $21.3 million of that was bet at the track. That would indicate there should still be a healthy handle for this year’s Derby, even without fans, although the undercard races may take a hit.
Tiz the Law Still the Favorite
There are two weeks until the Kentucky Derby, but there’s a clear favorite for the race. The only question is how low will Tiz the Law’s odds go before he breaks from the gate.
Barring the unfortunate or tragic, the Barclay Tagg-trained colt will be the heavy favorite regardless of which gate he draws. He’s won all four races he’s entered this season, all graded stakes, and all of them have been convincing victories.
Already, Circa Sports in Las Vegas has Tiz the Law at even odds on its fixed-odds Derby futures board. On its two-way betting odds board, the odds that Tiz the Law won’t win are only -130, meaning a $130 bet would win $100.
No other horse on Circa’s two-way board has no, or lose, odds longer than Art Collector’s -1000, meaning a $1,000 bet would net $100.
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