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Segment Information
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segment Information
17. SEGMENT INFORMATION
We manage our operations through three reportable segments: Live and Historical Racing, TwinSpires, and Gaming. Our operating segments reflect the internal management reporting used by our chief operating decision maker to evaluate results of operations and to assess performance and allocate resources.
On September 7, 2023, the Company began operating retail sports betting at its racetracks and HRM facilities in Kentucky. In addition to retail sports betting, third-party service providers began operating online sports wagering in partnership with the Company’s racetracks on September 28, 2023. Our retail and online sports betting business is included in the TwinSpires segment.
We have aggregated Arlington as well as certain corporate operations in All Other to reconcile to consolidated results.
Eliminations include the elimination of intersegment transactions. We utilize non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. Adjusted EBITDA includes the following adjustments:
Adjusted EBITDA includes our portion of EBITDA from our equity investments.
Adjusted EBITDA excludes:
•Transaction expense, net which includes:
–Acquisition, disposition, and property sale related charges;
–Direct online Sports and Casino business exit costs; and
–Other transaction expense, including legal, accounting, and other deal-related expense;
•Stock-based compensation expense;
•Rivers Des Plaines' impact on our investments in unconsolidated affiliates from:
–The impact of changes in fair value of interest rate swaps; and
–Legal reserves and transaction costs;
•Asset impairments;
•Gain on property and asset sales;
•Legal reserves;
•Pre-opening expense; and
•Other charges, recoveries, and expenses
On June 26, 2023, the Company's management agreement for Lady Luck expired and was not renewed. The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.
As of December 31, 2021, Arlington ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears. Arlington's results and exit costs in 2022 and 2023 are treated as an adjustment to EBITDA.
We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the accompanying Consolidated Statements of Comprehensive Income.
The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA:
Net revenue by segment is comprised of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2023202220232022
Live and Historical Racing$219.5 $92.3 $818.9 $439.2 
TwinSpires108.5 106.2 340.7 343.3 
Gaming244.3 183.4 740.2 545.0 
All Other0.2 1.2 0.7 2.2 
Net Revenue$572.5 $383.1 $1,900.5 $1,329.7 





Adjusted EBITDA by segment is comprised of the following:
Three Months Ended September 30, 2023
(in millions)Live and Historical RacingTwinSpiresGaming
Revenues$225.5 $112.4 $244.9 
Taxes and purses(62.0)(5.8)(81.4)
Marketing and advertising(7.6)(1.3)(8.9)
Salaries and benefits(27.9)(7.0)(35.2)
Content expense(1.6)(49.4)(2.4)
Selling, general and administrative expense(7.4)(3.0)(9.9)
Other operating expense(39.0)(12.0)(32.1)
Other income 0.9 — 47.3 
Adjusted EBITDA$80.9 $33.9 $122.3 
Three Months Ended September 30, 2022
(in millions)Live and Historical RacingTwinSpiresGaming
Revenues$102.4 $107.4 $185.9 
Taxes and purses(31.6)(6.6)(70.6)
Marketing and advertising(3.6)(1.3)(4.1)
Salaries and benefits(13.3)(6.3)(24.6)
Content expense(0.6)(49.3)(2.7)
Selling, general and administrative expense(3.4)(2.7)(7.1)
Other operating expense(15.6)(10.1)(21.7)
Other income 0.2 — 56.5 
Adjusted EBITDA$34.5 $31.1 $111.6 
Nine Months Ended September 30, 2023
(in millions)Live and Historical RacingTwinSpiresGaming
Revenues$849.3 $347.8 $744.4 
Taxes and purses(203.9)(17.8)(246.7)
Marketing and advertising(27.9)(8.0)(26.5)
Salaries and benefits(80.0)(20.7)(109.2)
Content expense(5.1)(161.1)(6.9)
Selling, general and administrative expense(23.4)(8.1)(32.4)
Other operating expense(123.6)(36.0)(92.1)
Other income 1.1 1.1 144.6 
Adjusted EBITDA$386.5 $97.2 $375.2 

Nine Months Ended September 30, 2022
(in millions)Live and Historical RacingTwinSpiresGaming
Revenues$465.5 $347.3 $549.6 
Taxes and purses(118.0)(21.3)(206.1)
Marketing and advertising(12.9)(11.4)(11.3)
Salaries and benefits(43.1)(19.9)(72.0)
Content expense(2.2)(160.5)(6.4)
Selling, general and administrative expense(9.7)(7.9)(20.4)
Other operating expense(53.6)(37.2)(63.9)
Other income 0.3 — 140.0 
Adjusted EBITDA$226.3 $89.1 $309.5 
Adjusted EBITDA by segment is comprised of the following:
Three Months Ended September 30,Nine Months Ended September 30,
(in millions)2023202220232022
Reconciliation of Comprehensive Income to Adjusted EBITDA:
Net income and comprehensive income $61.0 $57.0 $359.7 $438.4 
Additions:
Depreciation and amortization42.1 27.5 121.8 78.7 
Interest expense, net67.9 36.2 197.8 92.6 
Income tax provision 20.8 16.4 130.2 173.5 
EBITDA$191.8 $137.1 $809.5 $783.2 
Adjustments to EBITDA:
Stock-based compensation expense $8.1 $9.1 $24.8 $23.5 
Legal reserve— — — 3.2 
Pre-opening expense5.0 4.2 11.4 8.9 
Arlington exit costs0.1 1.4 9.4 5.7 
Other expenses, net0.7 — 7.6 — 
Transaction expense, net1.5 1.2 1.8 7.4 
Asset impairments— — 24.5 4.9 
Other income, expense:
Interest, depreciation and amortization expense related to equity investments10.1 10.1 29.8 31.7 
Changes in fair value of Rivers Des Plaines' interest rate swaps— — — (12.6)
Rivers Des Plaines' legal reserves and transaction costs— 0.1 — 0.6 
Other charges and recoveries, net0.9 — — 1.0 
Gain on sale of assets— — (114.0)(274.6)
Total adjustments to EBITDA26.4 26.1 (4.7)(200.3)
Adjusted EBITDA$218.2 $163.2 $804.8 $582.9 
Adjusted EBITDA by segment:
Live and Historical Racing$80.9 $34.5 $386.5 $226.3 
TwinSpires33.9 31.1 97.2 89.1 
Gaming122.3 111.6 375.2 309.5 
Total segment Adjusted EBITDA237.1 177.2 858.9 624.9 
All Other(18.9)(14.0)(54.1)(42.0)
Total Adjusted EBITDA$218.2 $163.2 $804.8 $582.9 
The table below presents total asset information for each of our segments:
(in millions) September 30, 2023December 31, 2022
Total assets:
Live and Historical Racing$3,742.1 $3,345.4 
TwinSpires461.4 287.9 
Gaming1,844.2 1,824.2 
Total segment assets6,047.7 5,457.5 
All Other702.8 749.3 
Total assets$6,750.5 $6,206.8 
The table below presents total capital expenditures for each of our segments:
Nine Months Ended September 30,
(in millions)20232022
Capital expenditures:
Live and Historical Racing$358.3 $177.4 
TwinSpires12.0 9.3 
Gaming120.5 63.0 
Total segment capital expenditures490.8 249.7 
All Other7.3 14.0 
Total capital expenditures$498.1 $263.7