DAVID GREENE, HOST:
All right. Tomorrow marks the 143rd running of the Kentucky Derby. Interest in horse racing, though, has been falling off. Of course, as Kentucky Public Radio's Ryland Barton reports, the track is not where Churchill Downs gets most of its money.
RYLAND BARTON, BYLINE: Jim Miselis has been coming to the Kentucky Derby since the mid-1980s. He's from Connecticut. And with his race card and a chewed-up cigar, he's happy to be at the track today.
JIM MISELIS: Yeah. It's been about my 15th trip down here to The Derby. And I just like the festivities. People are very friendly. Hang out at the backside some mornings.
BARTON: The backside is where the horse stables are and where trainers and jockeys hang out. Miselis is an old-school horse race fan. He's watched attendance at races decline over the years. He'd like tracks to find ways to bring younger spectators to the sport.
MISELIS: Just as much social as it is the sport. And the sport's interesting when you get a high number of quality horses running. That is what makes the race a lot more interesting.
BARTON: But racing just isn't where the money is. Fewer people are going to races across the country. And that's led to fewer races being run. There were 15,000 more races in 2006 than there were last year. To bring in more revenue, some race tracks have turned away from horses. Now, Churchill Downs makes its money this way.
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BARTON: In 2014, Churchill Downs bought Big Fish Games, which runs web-based platforms like "Jackpot City Slots," "Sunken Secrets" and "Bush Whacker 2." Though the company says its anchor is still the Kentucky Derby, it attributes a jump in revenue last year to its acquisition of Big Fish. Cameron McKnight, a Wells Fargo analyst who tracks the gaming industry, says Churchill Downs has become a leisure company.
CAMERON MCKNIGHT: Horse racing and The Derby absolutely sits at its core. Around that are several valuable and related businesses that, you know, collectively are all about entertainment.
BARTON: According to its annual SEC filings, Churchill Downs Inc. now only gets about 25 percent of its profits from the four racetracks it owns. And the company's stock is trading near an all-time high. In addition to the addictive phone and computer games, Churchill Downs reaps much of its revenue from five casinos across the country and an online horse betting service called TwinSpires. Alex Waldrop, president of the National Thoroughbred Racing Association, says Churchill Downs's diversification is still bringing money back into the racing industry.
ALEX WALDROP: The good news is even as people will gravitate toward the casino products, we're able to bring money back into the business. And we're able to grow purses.
BARTON: Purses, the prize money that horse owners are trying to win, are near an all-time high, grossing more than $1 billion last year. And attendance at the Kentucky Derby itself is breaking records - in 2015, topping 170,000. In the run-up to The Derby, there have been races all week.
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BARTON: And despite Churchill Downs's focus on non-racing ventures, The Derby itself is still going strong. For NPR News, I'm Ryland Barton in Louisville, Ky.
(SOUNDBITE OF MY DAD VS. YOURS' "BELLICOSE") Transcript provided by NPR, Copyright NPR.
