Fair Grounds Race Course Sustains Hurricane Damage

Hurricane Katrina, which ravaged the Gulf Coast of the United States with damaging winds, rains, and flood waters, caused damage to Fair Grounds Race Course in New Orleans, La. Fair Grounds and its affiliated off-track betting facilities and video poker operations are owned and operated by Churchill Downs Incorporated (CDI).

"We have much work to do in order to assess the status of our business operations and put in place a plan to move forward in Louisiana," said Thomas H. Meeker, president and chief executive officer of CDI. "As such, we will reserve detailed comment on this matter until such time as we are able to conduct on-site inspections and more accurately gauge the impact Hurricane Katrina had on our Louisiana operations. Given the difficulty of accessing areas affected by the storm, it could take several days or weeks before we have an accurate assessment.

"Right now, our greatest concern is for our employees, their families and our neighbors throughout the Greater New Orleans community," Meeker continued. "We know many of our team members are currently far from home and worried about the status of their homes and belongings. Our first concern is seeing to their immediate needs. The thoughts and prayers of CDI employees across the country are with them as we all come to grips with the aftermath of the storm."

CDI carries insurance on Fair Grounds and its affiliated businesses to cover property loss and business interruptions. The Company is preparing a team of employees and insurance industry representatives to assess damage to the racing property and off-track betting network, as well as the impact to Fair Grounds' overall operations and the track's ability to operate a race meet during the 2005-2006 racing season. Fair Grounds is scheduled to conduct its next live race meeting Nov. 24, 2005-March 26, 2006.

Based on preliminary reports from Fair Grounds security personnel, the racetrack, located on Gentilly Blvd., sustained structural damage to the grandstand facility and there is some flooding around the property. At this time, the condition of stable-area structures, including barns, and the 10 off-track betting facilities located around the Greater New Orleans area is not known. The track was closed for live racing at the time the storm hit, so no horses or stable personnel were housed in Fair Grounds' stable area.

Fair Grounds recently received approval from New Orleans City Council to begin construction of a slot machine gaming facility, which would be added on to the racetrack structure. Construction of the new facility had not begun. Renovations to portions of Fair Grounds' stable area, including improvements to living quarters and the track kitchen, were underway when the storm hit.

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