Churchill Downs (NASDAQ:CHDN) unveiled a plan today for running the Kentucky Derby on September 5 as scheduled earlier in the year because of the COVID-19 pandemic. Among many other measures and protocols designed to help prevent the spread of the novel coronavirus among guests, the 62-page plan specifies only approximately 23,000 spectators will actually be admitted, compared to last year's more than 150,000 and the all-time record of over 170,000.

General admission is canceled, and the infield will remain closed, with the only guests admitted being those with reserved seating and with reservations capped at 40% of seating capacity. Churchill Downs intends to refund all pre-purchased tickets from the eliminated categories. Overall, the racing and wagering company is keeping more than 86% of the racetrack's total spectator capacity shuttered.

Worker preparing horses for a race.

Image source: Getty Images

The relatively small number of guests admitted will receive courtesy bags containing masks, hand sanitizer, and a stylus for using wagering machines touch-free. The racetrack President Kevin Flanery observed the company's "extensive plan meets or exceeds all recommended state and local guidelines" and also remarked that the "opportunity to safely welcome back a limited number of guests to Churchill Downs" is "a privilege that our team doesn't take for granted."

The company showed it doesn't necessarily need jam-packed stands to turn a profit when its May 2020 opening weekend wagers topped the previous year by 185%.  Digital wagering through the Twin Spires app and online viewing, despite spectator-free stands, helped offset the coronavirus lockdown's effects, and Churchill Downs' shares rose +32% in May. Today, however, investors may be reacting to the news of reduced Kentucky Derby crowds by bidding the company's shares down almost 2% in early afternoon trading.

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