Churchill Downs Transforms Into a Gambling Company LOUISVILLE, Ky. - Last year, Churchill Downs Inc., the company that runs the most famous track in horse racing, moved its corporate headquarters from beneath the track's iconic twin spires to the top floor of a glass office building 15 miles away. Robert L. Evans, the company's chairman and chief executive officer, has frequently assured investors that while hosting the Kentucky Derby may be the company's most celebrated endeavor, it is hardly the most important. Churchill Downs, one of the marquee names in horse racing, is no longer primarily a horse racing company. As fewer gamblers turn out for horse races and the business of horse racing continues its long decline, Churchill Downs has transformed itself into a full-blown gambling company with interests in casinos and Internet sites. While financial analysts have applauded the shift - its stock has risen 51 percent in the past five years - the horse racing world feels abandoned by Churchill Downs. "They have the two prime races in the world in the Derby and Oaks; they speak with of those with obvious pride," said Michael Campbell, a trainer and president of the Illinois Thoroughbred Horsemen's Association, referring to Saturday's race and the Kentucky Oaks, the fillies" race held the day before. They have a lesser commitment to their other properties. They don't push horse racing anymore. They want casinos and technology, but they would not have access to either without horse racing. In 2005, Churchill owned seven racetracks that between them hosted more than 650 days of live racing every year. Now it has four tracks and half as many days of live racing. Company officials say the pivot from horse racing was out of necessity. The Kentucky Derby brings hundreds of thousands of people to Louisville every year, generating the bulk of the $65 million in revenue that the company generated in the second quarter of 2012. But Churchill's live and simulcast horse racing segment regularly loses money. "They are a more diversified company because they have had to be," said Jeffrey S. Thomison, an analyst with Hilliard Lyons here. The gaming sector has attractive economics. Horse racing does not. From the company's perspective, the strategy has worked well. In 2006, the last full year Churchill was a pure racing company, its revenue was $376 million. Last year, its revenue was more than $732 million. The company's bottom-line approach to its racetrack holdings and its hard-line negotiating positions have alienated horsemen throughout the industry. On Wednesday, the group representing Florida's horsemen failed to reach an agreement on a new contract with Calder Race Course in Florida, a Churchill property. Purses there were cut 20 percent, and the horsemen refused to let races be simulcast and bet on at out-of-state sites. Last year, horsemen boycotted the entry box at Arlington Park near Chicago as only 49 horses raced on Kentucky Oaks Day, and only 48 on Derby Day. A repeat of last year's disastrous opening was averted when Arlington Park and the Illinois Thoroughbred Horsemen's Association signed a two-year contract last week after tense negotiations. Just as the company has shifted its focus from horse racing, the racetracks themselves have also moved beyond the horse races. Calder and the Fair Grounds in New Orleans now have slot machines, which steadily draw crowds, and Arlington Park is expected to get them if Illinois passes an expanded gambling bill. The company has continued to lobby Kentucky legislators to introduce gaming to the mecca of horse racing, Churchill Downs. The track has been renovated and expanded in the past decade and has plenty of space to accommodate slot machines or a full-blown casino. At the same time, it has reduced the live racing it conducts as foal crops have declined and horsemen have left for racetracks in states where casino revenue has plumped purses. Churchill has focused much of its attention in recent years on properties outside horse racing, like a casino resort in Greenville, Miss. and a casino hotel in Vicksburg, Miss. It is building a video lottery terminal and harness racing track in southwest Ohio. It owns a multimedia poker company, and it recently launched Luckity.com, which turns live racing into lottery-style games. Evans, Churchill's C.E.O., discussed the shift during an earnings call last March. "To millions of people worldwide, Churchill Downs means the Kentucky Derby, the Kentucky Oaks, and Churchill Downs means thoroughbred racing," Evans said during the call. And while that's what our brands mean, it no longer is our business model. Churchill Downs officials declined to comment for this article. A company spokeswoman declined to make Evans available when The New York Times would not agree to let the company review quotations before publication. With the number of days of live races falling across Kentucky and purses dwindling at Turfway in Florence, Ky., and Ellis Park in Henderson, Ky., the state's leading horse racing figures say Kentucky no longer feels like the heart of thoroughbred racing. Many blame Churchill Downs. "We've lost any semblance of a circuit," said Marty Maline, the executive director of the Kentucky horsemen's association. They want to cut days to have full fields, but when you cut so much, we have to go find other options. Even before the recent shift away from horses, Churchill Downs has long clashed with members of the racing world. It has fought with the Jockeys Guild over everything from its contributions to the disabled riders fund to the absence of a kitchen for jockeys at Calder. The company has irritated some of the sport's most prominent owners and breeders by tightly controlling ticket prices on Kentucky Derby weekend, which range from $40 in the infield to more than $1,300 per seat on Millionaires Row. Corporate suites on the finish line can run up to $200,000, and seats in third-floor boxes can top $75,0000. This year, the press box was converted into an area called the Mansion, which seats 296 people and features a library, a butler and a private chef. Tickets cost $7,000 to $12,500. Despite the grumbling from the horse tracks and stables, analysts say the company would not have survived if it had remained reliant on horses. "They were overly dependent on a contracting business," said Thomison, of Hilliard Lyons. They have done a great job of turning a different direction.