Kentucky Derby’s $400,000 suites sell out in bigger luxury bet

Like many live sporting and entertainment events, the risk of pricing out loyal and less wealthy fans is a possibility for the more than century-old Kentucky Derby. (Bloomberg)

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This year’s Kentucky Derby will be the most luxurious ever – part of a nearly $1 billion investment plan to fortify horseracing’s marquee event as the sport faces declining interest.

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Churchill Downs Inc., the publicly traded owner of the Derby and other racetracks, is offering ever more lavish experiences for deep-pocketed fans, including $400,000 suites at the finish line.

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“The demand is extremely strong for our luxury and high-end segment,” said Sarah Contardo, senior vice president for sales and strategy at Churchill Downs.

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The company aims to keep boosting that supply after announcing a strategy in early 2025 to add more premium experiences over the next few years. That includes a revamped five-story terraced structure on the first turn and adding suites on the home stretch. Even the infield, the general admission section known for drunken and mud-soaked partying, is getting upgraded with pricier amenities such as rooftop views.

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The horseracing industry has been under pressure for years, facing increased competition for gambling spending with the legalizing of online sportsbooks. It’s also faced bad press after several high-profile horse injuries and fatalities. On top of that, the sport has an aging fanbase.

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Even the Derby, scheduled to start its 152nd running at about 7 p.m. New York time on Saturday, hasn’t been immune. Attendance fell about 6% to 147,000 last year. Churchill Downs stock hit an all-time high in 2023 and has declined by about a third since then.

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To combat slowing growth, the company is pushing more into historic racing machines, which are on-site gaming similar to slot machines, and turning traditional seats and viewing areas at its racetracks to higher-priced options. The move upscale is a trend seen across the sports world, from pro tennis to Formula One.

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Just one aspect of that at the Derby is the Mansion, a luxury viewing lounge with a private betting parlor and terraces for viewing the race from up high. The all-inclusive food and drinks package costs roughly $17,000 per ticket and includes made-to-order sushi, lobster tails and steak. Churchill Downs spent roughly $25 million upgrading the area’s southern-style design and nearby finish-line suites, which start at $405,000 and are sold out this year.

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“Even though we’ve been around for over 152 years, and we have this historical facility, there’s still a lot of opportunity — both in terms of some open space and redoing existing older space,” Chief Executive Officer Bill Carstanjen said recently in an interview on Bloomberg’s Business of Sports podcast.