Thriving in Change: How Churchill Downs Incorporated is Revolutionizing Entertainment and Betting for the Modern Era

Authors: Mahesh Gupta, William G. Ferko, Thomas E. Lambert

Corresponding Author: Thomas E. Lambert, PhD
Room W112, North Wing, College of Business, University of Louisville, Louisville, KY 40292
Email: [email protected]
Phone: 502-852-7838

About the Authors:

Mahesh Gupta is a professor specializing in Information Systems and Operations at the University of Louisville. His work focuses on enhancing organizational performance through management approaches like Lean and Six Sigma. He has published research in various respected journals.

William G. Ferko teaches Equine Finance and has received accolades for his teaching efforts at the university. He has extensive experience in finance and has led numerous merger and acquisition deals, emphasizing creating value for stakeholders.

Thomas E. Lambert holds a position as an associate professor in the Equine Administration and Economics departments. His research interests cover gambling industries, policy implications, and economic trends in the field.

Abstract

This paper analyzes Churchill Downs Incorporated (CDI), an essential player in the Thoroughbred racing industry, particularly known for hosting the Kentucky Derby. CDI operates in a changing landscape of gambling and entertainment, facing both challenges and opportunities. The analysis, using the Service Triangle framework, emphasizes how CDI has adapted to competition by modernizing facilities, improving customer service, and diversifying gambling options, including sports betting and historical horse racing machines. The conclusion offers actionable recommendations to strengthen CDI’s market leadership and customer satisfaction amidst a shrinking horseracing market.

Introduction

Churchill Downs Incorporated (CDI) has significantly influenced the Thoroughbred racing industry since 1875. The Kentucky Derby, its hallmark event, has grown from a local race to a globally celebrated spectacle. CDI’s history demonstrates resilience through various social and economic changes while facing modern challenges like declining attendance and inflation-adjusted revenues.

Recent trends, such as the increasing competition from other forms of gambling, have prompted CDI to adapt actively. The expansion into historical horse racing and its online platform, TwinSpires, indicates a response to these industry shifts. This study explores CDI’s strategies to remain competitive and relevant in this evolving landscape, emphasizing the importance of integrating traditional values with modern innovations.

Background and Historical Context

CDI stands as a symbol of the gambling and entertainment evolution in the U.S., thriving during times of adversity while cultivating an iconic status in horse racing. Founded in a period when horse racing was the only legal gambling option, CDI has continuously adapted to maintain its influence in the industry. Despite the appeal of its major events, CDI faces the challenge of declining attendance and needs new strategies to connect with broader demographics.

Strategically, CDI uses a customer-centric approach, focusing on enhancing experiences through improved facilities and diversified offerings. The company has embraced modern entertainment trends by integrating HHR machines and expanding its services beyond traditional racing to engage a wider audience.

Service Triangle Framework Analysis

This paper employs the Service Triangle framework to examine CDI’s operational dynamics. The framework highlights the interplay between strategy, systems, people, and customer engagement in delivering outstanding service. CDI’s success hinges on aligning its operational strategies with customer expectations, ensuring that employees are well-equipped to provide exceptional experiences.

The four essential components of the Service Triangle are:

• Strategy: Developing a service strategy that prioritizes customer satisfaction through consistent quality and engagement.
• Systems: Establishing strong operational systems that facilitate effective service delivery.
• People: Recognizing that employees are crucial to delivering a positive customer experience.
• Customers: Continuously engaging customers to understand and meet their needs.

Conclusion and Recommendations

In summary, CDI’s responsiveness to market shifts highlights its importance in the entertainment industry. By embracing digital tools, diversifying entertainment options, and investing in employee development, CDI can enhance customer experiences and maintain its competitive edge.

Future research may focus on assessing how well CDI’s strategic initiatives align with consumer trends and how emerging technologies can be integrated within their existing frameworks. Exploring immersive technologies, such as virtual reality, could present new avenues for engaging customers and enhancing their experience at CDI.

As CDI navigates future opportunities and challenges, its commitment to innovation and customer engagement will be pivotal in securing its legacy in the Thoroughbred racing and broader gambling industries.

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