The Derby is good for business in Louisville and Kentucky.
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, an economics professor in the has compiled a new report on the economic impact of Churchill Downs and Kentucky Derby week activities in the Louisville metro area. The report includes estimates of returns on tax incentives.听
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Using data from the Kentucky Horse Racing Commission, Churchill Downs, the U.S. Bureau of Economic Analysis and IMPLAN, a software program for assessing economic impact, Lambert reports that in a typical year, the Derby and Churchill Downs generate $396 million in direct, indirect and induced spending and approximately $47 million in local, state and federal tax revenue.听
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- Estimated Derby week economic impact of Churchill Downs:听 $302 million
- Estimated Derby week direct, indirect and induced spending on hotels, restaurants,听 听 听 听 etc.:听 $94 million
- Total Derby week economic activity: $ 396 million
Lambert estimates that local and state governments provide $3-4 million in tax incentives and services to Churchill Downs and the Kentucky equine industry each year. However, these tax losses are offset by $17 million in tax revenue for local and state government generated by Churchill Downs and local businesses during Derby week.听
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In the report, Lambert also shows some of the impact of COVID-19 on Derby-related revenue in 2020 and 2021, which significantly reduced revenues for Churchill Downs, the community and taxing authorities.
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Lambert notes that thanks to Derby week and diversification into historical horse racing and racing casinos like Turfway Park in Florence, Kentucky, Churchill Downs has offset a trend of declining revenues and attendance at most racetracks, including its own, in the United States.
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