Churchill Downs' new Rose casino hotel in Dumfries, Virginia is showing promising early performance despite being open for less than two months. Stifel analyst Jeffrey Stantial maintains a "buy" rating with a $164 price target, suggesting a 24% upside potential.

The property has successfully attracted players from key markets including Manassas, Woodbridge, Fredericksburg, and Washington, DC, where it competes with MGM National Harbor.

Early Performance Indicators:

• Expected monthly gross gaming revenue (GGR) of $15-20 million
• Potential for 50% EBITDA margins, comparable to Derby City property
• Strong initial customer database growth through multi-channel marketing
• Better-than-expected employee retention rates

Strategic Advantages:

• Limited competition within 60-minute drive radius
• MGM National Harbor is the only major competitor
• Lower gaming taxes in Virginia compared to neighboring jurisdictions
• Favorable local demographics
• Unlikely competitive threat from Fairfax County

Churchill Downs' expansion in Virginia, including both The Rose and its live and historical horseracing venues, positions the company for significant growth. The L&H properties are projected to generate $15-16 million in monthly GGR into next year, with The Rose potentially exceeding these figures.

The property is currently focusing on building its customer database through television, social media, radio, online advertising, and billboard campaigns. Management expects margins to gradually improve throughout 2025 as marketing investments yield returns and operational efficiencies are realized.

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