Churchill Downs Incorporated Reaches Agreement to Sell Ellis Park to Kentucky Businessman Ron Geary

Churchill Downs Incorporated (“CDI” or “Company”) (NASDAQ: CHDN) today announced that it has reached a definitive agreement to sell Ellis Park, its racetrack in Henderson, Ky., to a company owned by Kentucky businessman and racehorse owner Ron Geary. The transaction is not material to CDI’s results of operations; consequently, financial terms will not be disclosed. The transaction is subject to customary closing conditions and is expected to be completed in the third quarter of 2006.

Since the transaction will not close before the start of Ellis Park’s 2006 race meet on July 19, CDI has signed a management agreement with Geary, which was endorsed today by the Kentucky Horse Racing Authority (“KHRA”). Geary will manage operations at the track until the sale is complete. Ellis Park will remain part of the Churchill Downs Simulcast Network (“CDSN”) for a period of time and will have the option to continue its affiliation with CDSN.

The parties have also reached an agreement regarding their applications for race dates in early July for a period of five years after the agreement is completed. Ellis Park had traditionally run early July dates, including the Fourth of July holiday. In recent years, those dates were run at Churchill Downs. Going forward, CDI and its Louisville racetrack, Churchill Downs, will not apply for race dates beyond the first week of July, and the parties will jointly seek approval from the KHRA to run concurrent race dates for the week surrounding the July 4 holiday.

“Churchill Downs Incorporated is pleased to have found for Ellis Park a new owner who is passionate about horse racing and ready to focus his full attention on the track and its prospects for the future,” said Michael E. Miller, CDI’s executive vice president and chief financial officer. “Ellis Park is an important link in our state’s year-round racing circuit and provides a summer ‘home’ for Kentucky-based horsemen. CDI acquired Ellis Park eight years ago to preserve that year-round circuit. Today, we believe Ellis Park will benefit from an independent operator such as Ron Geary, who as a successful businessman and racehorse owner approaches this new opportunity with enthusiasm and a vision for this historic property. While we believe selling Ellis Park is both the right decision for the track and for our Company, we will miss having the Ellis Park team members as part of our family of employees. Their love for and dedication to Ellis Park and its racing tradition is truly admirable.”

“I am excited to take the reins at Ellis Park at a pivotal time in the track’s 85-year history,” said Ron Geary. “The track has faced its share of challenges to be sure, including a tornado that almost leveled the facility. But today, a rebuilt and rejuvenated Ellis Park is focused on the future and ready to welcome horsemen and race fans back for another season of live racing. I am focused on building a solid future for Ellis Park and look forward to working with the Ellis Park team and our Kentucky horsemen to keep Ellis Park a popular spot for summer racing for years to come.”

Geary recently retired as president and chief executive officer of ResCare, a Louisville-based, publicly-held provider of training services and services to persons with developmental and other disabilities. Previously, Geary served three years as president of the Cincinnati Bible College and four years as secretary of revenue of the Cabinet of former Kentucky Gov. John Y. Brown.

A news conference to discuss the pending sale will be held Tuesday, July 18, at 10 a.m. CDT at Ellis Park in the Gardenia Room. Ron Geary and Steve Sexton, senior vice president of CDI’s Kentucky operations and president of Churchill Downs and Ellis Park, will be available to brief media representatives and respond to questions.

Churchill Downs Incorporated, headquartered in Louisville, Ky., owns and operates world-renowned horse racing venues throughout the United States. CDI’s six racetracks in Florida, Illinois, Indiana, Kentucky and Louisiana host many of North America’s most prestigious races, including the Kentucky Derby and Kentucky Oaks, Arlington Million, Princess Rooney Handicap, Louisiana Derby and Indiana Derby. CDI racetracks have hosted six Breeders’ Cup World Thoroughbred Championships. CDI also owns off-track betting facilities and has interests in various television production, telecommunications and racing services companies that support CDI’s network of simulcasting and racing operations. CDI trades on the NASDAQ Global Select Market under the symbol CHDN and can be found on the Internet at www.churchilldownsincorporated.com.

Information set forth in this news release contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include: the effect of global economic conditions; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties; the economic environment; the impact of increasing insurance costs; the impact of interest rate fluctuations; the effect of any change in our accounting policies or practices; the financial performance of our racing operations; the impact of gaming competition (including lotteries and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in those markets in which we operate; the impact of live racing day competition with other Florida and Louisiana racetracks within those respective markets; costs associated with our efforts in support of alternative gaming initiatives; costs associated with Customer Relationship Management initiatives; a substantial change in law or regulations affecting pari-mutuel and gaming activities; a substantial change in allocation of live racing days; litigation surrounding the Rosemont, Illinois, riverboat casino; changes in Illinois law that impact revenues of racing operations in Illinois; a decrease in riverboat admissions subsidy revenue from our Indiana operations; the impact of an additional Indiana racetrack and its wagering facilities near our operations; our continued ability to effectively compete for the country’s top horses and trainers necessary to field high-quality horse racing; our continued ability to grow our share of the interstate simulcast market; our ability to execute our acquisition strategy and to complete or successfully operate planned expansion projects; our ability to successfully complete any divestiture transaction; our ability to adequately integrate acquired businesses; market reaction to our expansion projects; the loss of our totalisator companies or their inability to provide us assurance of the reliability of their internal control processes through Statement on Auditing Standards No. 70 audits or to keep their technology current; the need for various alternative gaming approvals in Louisiana; our accountability for environmental contamination; the loss of key personnel; the impact of natural disasters, including Hurricanes Katrina, Rita and Wilma on our operations and our ability to adjust the casualty losses through our property and business interruption insurance coverage; any business disruption associated with a natural disaster and/or its aftermath; and the volatility of our stock price.