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Churchill Downs Sells Stake in Kentucky Downs

LOUISVILLE, Kentucky – (PRESS RELEASE) -- Churchill Downs Incorporated (Nasdaq: CHDN) today announced that it sold a 19-percent stake in Kentucky Downs, including debt owed to CDI, to Kelley Farms Racing. As part of the terms of the transaction, former CDI board member Brad M. Kelley exchanged shares of CDI stock valued at $3.2 million for the stake. The sale reduces CDI's ownership of Kentucky Downs to a total of 5 percent.

Thomas H. Meeker, CDI's president and chief executive officer, said the Company's divesture was in the best interests of both parties.

"CDI sold a portion of its Kentucky Downs ownership for fair value which includes a contingency payout should the facility be approved for alternative gaming legislation," said Meeker. "The sale also afforded us the opportunity to monetize a currently non-productive asset. For Brad Kelley, the transaction increased his stake in a racetrack that he has sought additional ownership in for some time. He is a gifted businessman from the Franklin, Ky. area who is well-suited to advance the strategic interests of Kentucky Downs," said Meeker.

In addition, as part of the transaction, the Company redeemed an additional amount of CDI stock from Kelley in exchange for a convertible promissory note. In total, CDI redeemed 539,489 shares of Company stock valued at $19.9 million, reducing Kelley's ownership of CDI stock to 4.9 percent. Churchill Downs Incorporated, headquartered in Louisville, Ky., owns and operates world-renowned horseracing venues throughout the United States. The Company's seven racetracks in California, Florida, Illinois, Indiana, Kentucky and Louisiana host 123 graded-stakes events and many of North America's most prestigious races, including the Kentucky Derby and Kentucky Oaks, Hollywood Gold Cup and Arlington Million. CDI racetracks have hosted nine Breeders' Cup World Thoroughbred Championships -- more than any other North American racing company. CDI also owns off-track betting facilities and has interests in various television production, telecommunications and racing services companies that support CDI's network of simulcasting and racing operations. CDI trades on the Nasdaq National Market under the symbol CHDN and can be found on the Internet at http://www.churchilldownsincorporated.com .

Kentucky Downs, formerly known as Dueling Grounds Race Course, offers a short annual race meet and year-round simulcast wagering. The track is located on the Kentucky and Tennessee border, about 40 miles from Nashville. A distinctive feature of the facility is that all of its racing is conducted on a European-style 1-5/16-mile turf course. CDI has held a minority interest in Kentucky Downs since 1997.

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