Shares of racing, gaming, and entertainment company Churchill Downs (NASDAQ:CHDN) fell 4.6% in the afternoon session after the stock continued to pull back as a regulatory body ordered it to pay millions of dollars in delinquent dues or face a ban on out-of-state wagering.

The Horseracing Integrity and Safety Authority (HISA) issued an order requiring Churchill Downs Inc. (CDI) to pay $5.27 million in dues plus interest by a March 26 deadline. The company requested a stay of the order. If the debt was not resolved, the company faced being barred from offering simulcasting on its races from several tracks, a move that could affect major events like the Kentucky Derby. This development followed a weaker-than-expected earnings report where the company, despite revenue growth, significantly missed analysts' estimates for earnings per share and adjusted operating income.

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Churchill Downs’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 11 months ago when the stock dropped 14.9% on the news that the company reported mixed first quarter 2025 results which included an EPS beat but revenue and EBITDA were inline.

Revenue was up 9%, with both gaming and racing up around 10%. But TwinSpires, where customers place horse bets online, saw less action, which softened the overall results. Management maintained a steady tone, reaffirming confidence in its core businesses but pausing certain capital projects due to the economic backdrop. Zooming out, we think this was a decent quarter featuring some areas of strength but also some blemishes. The areas below expectations seem to be driving the move.

Churchill Downs is down 25.4% since the beginning of the year, and at $83.57 per share, it is trading 28.9% below its 52-week high of $117.59 from December 2025. Investors who bought $1,000 worth of Churchill Downs’s shares 5 years ago would now be looking at only $717.39.

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