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<SEC-DOCUMENT>0000940397-04-000175.txt : 20040902
<SEC-HEADER>0000940397-04-000175.hdr.sgml : 20040902
<ACCEPTANCE-DATETIME>20040901215049
ACCESSION NUMBER:		0000940397-04-000175
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040901
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Regulation FD Disclosure
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20040902
DATE AS OF CHANGE:		20040901

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHURCHILL DOWNS INC
		CENTRAL INDEX KEY:			0000020212
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-RACING, INCLUDING TRACK OPERATION [7948]
		IRS NUMBER:				610156015
		STATE OF INCORPORATION:			KY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-01469
		FILM NUMBER:		041012269

	BUSINESS ADDRESS:	
		STREET 1:		700 CENTRAL AVE
		CITY:			LOUISVILLE
		STATE:			KY
		ZIP:			40208
		BUSINESS PHONE:		5026364400

	MAIL ADDRESS:	
		STREET 1:		700 CENTRAL AVENUE
		STREET 2:		700 CENTRAL AVENUE
		CITY:			LOUIVILLE
		STATE:			KY
		ZIP:			40208
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>cd901048k.htm
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>UNITED STATES<br>
SECURITIES AND EXCHANGE COMMISSION </FONT></H1>

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<A NAME=A002></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>WASHINGTON, DC 20549 </FONT></H1>

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<A NAME=A003></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 8-K </FONT></H1>

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<A NAME=A004></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>CURRENT REPORT PURSUANT<br>
TO SECTION 13 OR 15(D) OF THE <br>SECURITIES EXCHANGE ACT OF 1934 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Date
of report (Date of earliest event reported): August 31, 2004 </FONT></P>

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<A NAME=A007></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Churchill Downs
Incorporated</b></font><br>

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<p align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exact Name of
Registrant as Specified in Its Charter) </FONT></P>

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<A NAME=A009></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=3>Kentucky </FONT></H1>

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<A NAME=A010></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(State or Other
Jurisdiction of Incorporation) </FONT></P>

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<A NAME=A011></A>
<H1 ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=4>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0-1469&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 61-0156015 </FONT></H1>

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<br>
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Commission File Number)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;(IRS Employer Identification No.)</font><br>

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<A NAME=A012></A>
 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;700 Central Avenue<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Louisville, Kentucky&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  40208
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     <HR ALIGN=LEFT WIDTH=100% SIZE=1 NOSHADE>(Address of Principal Executive Offices)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Zip Code)

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<A NAME=A014></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(502)636-4400 </FONT></H1>

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<A NAME=A015></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Registrant&#146;s
Telephone Number, Including Area Code) </FONT></P>

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     <HR ALIGN=LEFT WIDTH=100% SIZE=1 NOSHADE>

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<A NAME=A016></A>
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Former Name or Former
Address, if Changed Since Last Report) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (<I>see
</I>General Instruction A.2. below): </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|_|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|_| Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|_|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;|_|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) </FONT></P>







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<A NAME=A017></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 1.01 Entry into a
Material Definitive Agreement.</B> </FONT></H1>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 1, 2004, Churchill Downs Incorporated (&#147;Churchill&#148;) announced that it
had entered into a definitive asset purchase agreement to acquire Fair Grounds Race Course
in New Orleans, Louisiana, including a thoroughbred race track, 145 acres, support
facilities and off-track betting facilities associated with the racetrack, from Fair
Grounds Corporation (&#147;Fair Grounds&#148;), for $47 million in cash (the &#147;Fair
Grounds Purchase Agreement&#148;). The Fair Grounds Purchase Agreement is conditioned upon
the approval of the United States Bankruptcy Court for the Eastern District of Louisiana
of the Fair Grounds Purchase Agreement and a consensual amended plan of reorganization of
Fair Grounds in its Chapter 11 bankruptcy case. </FONT></P>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
connection with the acquisition, Churchill also entered into a letter agreement (the
&#147;LHBPA Agreement&#148;) with the Louisiana Horsemen&#146;s Benevolent and Protective
Association 1993, Inc. (&#147;LHBPA&#148;), pursuant to which Churchill agreed that $25
million from the purchase price of the Fair Grounds Purchase Agreement would be paid to
the LHBPA in settlement of certain litigation between LHBPA and Fair Grounds at closing of
the transactions contemplated by the Fair Grounds Purchase Agreement, to occur on or
before October 15, 2004. The litigation was previously the subject of an August 6, 2004
settlement agreement between LHBPA and Fair Grounds, certain provisions of which were
included in the LHBPA Agreement. In the LHBPA Agreement, Churchill agreed to pay LHBPA 4%
of the gross sales price or other consideration in the event of a sale of the Fair Grounds
Race Course by Churchill, and to post-closing covenants to make capital improvements of
not less than $4 million to Fair Grounds Race Course and to the conduct of live racing at
Fair Grounds Race Course. Churchill also agreed to refrain from seeking legislation or
regulatory action which would diminish certain gaming revenues to LHBPA. Churchill&#146;s
obligations to LHBPA under the LHBPA Agreement are conditioned upon closing of the Fair
Grounds Purchase Agreement and bankruptcy court approval of the amended plan of
reorganization of Fair Grounds. </FONT></P>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
conjunction with the transactions contemplated by the Fair Grounds Purchase Agreement,
Churchill Downs entered into a global term sheet with Fair Grounds, Ben S. Gravolet,
Finish Line Management Corp. (&#147;Finish Line&#148;) and Bryan G. Krantz (the
&#147;Global Term Sheet&#148;). Under the Global Term Sheet, (i) Churchill agreed to
assume all obligations of Fair Grounds and Finish Line to Video Services, Inc. related to
video poker at Fair Grounds and Finish Line locations, and agreed to consummate the
acquisition of the stock or assets of Video Services, Inc.; (ii) Churchill agreed to make
a $3.5 million debtor in possession loan to Fair Grounds; (iii) Churchill agreed to waive
its $250,000 expense reimbursement claim in the bankruptcy proceedings; (iv) Fair Grounds
agreed to the modification of the August 6, 2004 settlement agreement with LHBPA as
described in the LHBPA Agreement; and (v) Churchill agreed to acquire certain assets of
Finish Line for $2.2 million plus the assumption of secured debt not to exceed $4.5
million. The acquisition of the Finish Line assets by Churchill includes Churchill&#146;s
agreement to forgive the receivable due from Finish Line to Fair Grounds in
an amount not to exceed $4.5 million, and the waiver of any related claim, upon
Churchill&#146;s acquisition of the receivable and related claim at the closing of the
acquisition of the Fair Grounds assets, and is further subject to final due diligence and
documentation, including the lease for an off-track betting facility. </FONT></P>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Global Term Sheet, Churchill agreed to enter into a 3 year consulting agreement with
Bryan G. Krantz, the President of Fair Grounds and Finish Line. Under the </FONT></P>





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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>consulting agreement, Mr. Krantz will
be paid compensation of $400,000 per year, plus health insurance and a $300,000 bonus
payable at the closing of the Fair Grounds Purchase Agreement. </FONT></P>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Global Term Sheet, the parties also agreed to the compromise and settlement of certain
claims pending in the bankruptcy proceeding, as more fully described in the Global Term
Sheet. The obligations of the parties under the Global Term Sheet are conditioned upon the
closing of all of the matters contemplated by the Global Term Sheet and upon final
bankruptcy court approval of the amended plan of reorganization of Fair Grounds. </FONT></P>

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<A NAME=A018></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 7.01 Regulation FD
Disclosure.</B> </FONT></H1>

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<P align=justify><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
September 1, 2004, Churchill Downs issued a press release announcing the proposed terms of
its acquisition of Fair Grounds Race Course and related transactions. A copy of this press
release is attached hereto as Exhibit 99.1. </FONT></P>

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<A NAME=A019></A>
<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 9.01 Financial
Statements and Exhibits.</B> </FONT></H1>

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     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c)&nbsp;&nbsp;&nbsp;&nbsp;
          Exhibits. </FONT></P>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>99.1 </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
 Press release dated September 1, 2004 issued by Churchill Downs.</font></td></tr>
</table>



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<A NAME=A020></A>
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P>


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     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD width=40%><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD width=60%><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>CHURCHILL DOWNS INCORPORATED<BR><BR></b></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">September 1, 2004</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><u>&nbsp;/s/ Michael E. Miller&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
Michael E. Miller<br>Executive Vice President and Chief Financial<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Officer<br>
(Principal Financial and Accounting Officer)</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TD></TR>
</TABLE>


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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>cd8k90104ex991.htm
<DESCRIPTION>PRESS RELEASE
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<P ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT 99.1</FONT></P>
<P align=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[LOGO]</font></p>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FOR IMMEDIATE RELEASE</font>
<P ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Contact: Mike Ogburn<br>Churchill Downs Incorporated<br>
(502) 636-4415 (office)<br>(502) 262-0224(mobile)<br>mogburn@kyderby.com </FONT></P>


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<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CHURCHILL
DOWNS INCORPORATED AGREES TO TERMS WITH FAIR<br>
GROUNDS CORPORATION, HORSEMEN</b> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>LOUISVILLE, Ky. (Sept. 1,
2004)</B> &#151; Churchill Downs Incorporated (Nasdaq: CHDN) (&#147;CDI&#148; or
&#147;Company&#148;) today announced that it has agreed to terms with Fair Grounds
Corporation (&#147;Fair Grounds&#148;) and other parties to acquire Fair Grounds Race
Course for $47 million, pending approval of the U.S. Bankruptcy Court, Eastern District of
Louisiana. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Thomas
H. Meeker, CDI&#146;s president and chief executive officer, stated: &#147;We are excited
to have agreed on terms that will inure to the benefit of all parties involved. From the
outset, we have endeavored to reach an agreement with the horsemen and to maximize the
value of the asset for the racetrack&#146;s creditors and shareholders. We believe the
agreement accomplishes this, and we are satisfied that all constituents now share a common
goal. It is paramount to all parties to bring the deal to closure as quickly as possible,
well in advance of the upcoming race meet.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Fair
Grounds, with its rich tradition and winter-race schedule, is an excellent strategic fit
for CDI and will benefit greatly from our operational expertise, industry-leading brand
and simulcast network,&#148; Meeker added. &#147;We look forward to working with racetrack
President Bryan Krantz and the Louisiana horsemen to deliver an outstanding meet in
November and in the years to come. We are eager to become a part of the New Orleans
community.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
the agreement is consummated, the bankruptcy court must confirm the terms of the deal in
the form of an amended bankruptcy plan. The parties anticipate the court will hold a final
confirmation hearing to consider approval of the amended plan on Sept. 24. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Churchill
Downs Incorporated (&#147;CDI&#148;), headquartered in Louisville, Ky., owns and operates
world-renowned horseracing venues throughout the United States. The Company&#146;s
racetracks in California, Florida, Illinois, Indiana and Kentucky host 114 graded-stakes
events and many of North America&#146;s most prestigious races, including the Kentucky
Derby and Kentucky Oaks, Hollywood Gold Cup and Arlington Million. CDI racetracks have
hosted nine Breeders&#146; Cup World Thoroughbred Championships &#150; more than any other
North American racing company. CDI also owns off-track betting facilities and has
interests in various television production, telecommunications and racing services
companies that support CDI&#146;s network of simulcasting and racing operations. CDI
trades on the Nasdaq National Market under the symbol CHDN and can be found on the
Internet at <U>www.churchilldownsincorporated.com</U>. </FONT></P>

<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>-MORE-</font></p>

<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>700 CENTRAL AVENUE LOUISVILLE, KY 40208 P:(502) 636-4400 churchilldownsincorporated.com</font></P>


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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Churchill Downs Incorporated Agrees To Terms with Fair Grounds Corporation, Horsemen<br>
Page 2<br>
Sept. 1, 2004</font></p>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This
news release contains forward-looking statements made pursuant to the &#147;safe
harbor&#148; provisions of the Private Securities Litigation Reform Act of 1995. The
reader is cautioned that such forward-looking statements are based on information
available at the time and/or management&#146;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 &#147;anticipate,&#148;
&#147;believe,&#148; &#147;could,&#148; &#147;estimate,&#148; &#147;expect,&#148;
&#147;intend,&#148; &#147;may,&#148; &#147;might,&#148; &#147;plan,&#148;
&#147;predict,&#148; &#147;project,&#148; &#147;should,&#148; &#147;will,&#148; 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 our
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 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; costs associated with our efforts in support of
alternative gaming initiatives; costs associated with our Customer Relationship Management
initiative; a substantial change in law or regulations affecting our pari-mutuel
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&#146;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 adequately integrate acquired businesses; market reaction to our
expansion projects; any business disruption associated with our facility renovations; the
loss of our totalisator companies or their inability to keep their technology current; our
accountability for environmental contamination; the loss of key personnel and the
volatility of our stock price.</I> </FONT></P>

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