The Kentucky Derby, which runs on Saturday, May 6, lasts just two minutes but generates millions of dollars from betting, hospitality, and spectators.
- In a typical year, the Derby and Churchill Downs generate $396 million in spending and approximately $47 million in local, state and federal tax revenue, according to University of Louisville economics professor Thomas Lambert.
- The amount wagered on the single Derby race is $178 million.
- The winning horse (and its owner) receives $1.86 million.
why it’s news
Beginning in 1875, the Kentucky Derby is perhaps the most famous horse race in the world—the first of the Triple Crown series of races, kicking off on the first Saturday in May. It’s the final race of the day at Churchill Downs in Louisville, Kentucky. People flock to the venerable racetrack, wearing fancy hats and drinking mint juleps—and betting on the horse or horses they think will come in first (win), second (place), or third (show).
All those horse enthusiasts need to eat, drink, and sleep, so the event is a major inflow in revenue for Louisville and Kentucky—some $396 million, estimates Professor Lambert. The economic impact on the racetrack Churchill Downs is $302 million, and spending on hotels and restaurants is $94 million.
In 2022, betting on the Kentucky Derby from all sources reached $179 million, up 17% from the 2021 race. Only the record $250.9 million in 2019 topped the 2022 figure, according to Thoroughbred Daily News.
As with the sports betting industry in general, betting on the Kentucky Derby has multiplied rapidly throughout the years. In 1981, the total bet on the race hit $11.4 million. In 1991, it had grown to $42.7 million and, 10 years later, the number had increased to $107.6 million.
The purse of prize money is $3 million, and the first-place winner gets $1.86 million, while the jockey will take home $186,000, according to data from Churchill Downs. The second-place finisher will take home $600,000, with the jockey taking home $30,000. The third-place finisher earns $300,000, with the jockey earning $15,000.
The Belmont Stakes has a purse of $1.5 million, and the Preakness Stakes is the lowest of the three, with a $990,000 purse.
The value of the winning horse usually increases dramatically after the race, which is realized when auctioned off for breeding purposes. The 2000 winner, Fusaichi Pegasus, was purchased for $4 million.
To calculate the economic impact, Professor Lambert used data from the Kentucky Horse Racing Commission, Churchill Downs, the U.S. Bureau of Economic Analysis, and IMPLAN, a software program for assessing economic impact.
