UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)

of the Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant x☒

Filed by a Party other than the Registrant ¨☐

Check the appropriate box:

CHURCHILL DOWNS INCORPORATED

(Name of Registrant as Specified In Itsin its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

CHURCHILL DOWNS INCORPORATED

600 N. HURSTBOURNE PARKWAY, STE. 400

LOUISVILLE, KENTUCKY 40222

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD ON APRIL 23, 201524, 2018

To the Shareholders of

Churchill Downs Incorporated:

Notice is hereby given that the Annual Meeting of Shareholders (the “Annual Meeting”) of Churchill Downs Incorporated (the “Company”), a Kentucky corporation, will be held at the Four SeasonsThe Knickerbocker Hotel, Seattle, located at 99 Union Street, Seattle, Washington 98101,6 Times Square, New York, New York 10036, on Thursday,Tuesday, April 23, 2015,24, 2018, at 9:00 a.m. PacificEastern Daylight Saving Time, for the following purposes:

The close of business on February 27, 2015,March 2, 2018, has been fixed as the record date for determining the shareholders entitled to notice of, and to vote at, the Annual Meeting. Only shareholders of record at that time will be entitled to notice of and to vote at the Annual Meeting and at any adjournments thereof.

Shareholders who do not expect to attend the meeting in person are urged to sign, date and promptly return the Proxy that is enclosed herewith or vote by telephone or over the Internet.Internet, or by requesting and promptly signing and returning a proxy card.

By Order of the Board of Directors.

ALANBRADLEY K. TSEBLACKWELL

ExecutiveSenior Vice President,

General Counsel and Secretary

March 23, 201515, 2018

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON APRIL 23, 201524, 2018

The Company’s Proxy Statement for the 20152018 Annual Meeting of Shareholders and the Annual Report to Shareholders for the fiscal year ended December 31, 20142017 are available at

http://www.churchilldownsincorporated.com/proxy.

CHURCHILL DOWNS INCORPORATED

600 N. HURSTBOURNE PARKWAY, STE. 400

LOUISVILLE, KENTUCKY 40222

PROXY STATEMENT

Annual Meeting of Shareholders to be held on April 23, 201524, 2018

The enclosed Proxy is being solicited by the Board of Directors (the “Board of Directors” or “Board”) of Churchill Downs Incorporated (“Company,” “CDI,” or “CHDN”) is soliciting proxies to be voted at the 20152018 Annual Meeting of Shareholders to be held on Thursday,Tuesday, April 23, 2015,24, 2018, at 9:00 a.m. PacificEastern Daylight Saving Time (the “Annual Meeting”), atthe Four SeasonsThe Knickerbocker Hotel, Seattle, located at 99 Union Street, Seattle, Washington 981016 Times Square, New York, New York 10036, and any adjournments thereof. This solicitation is being made primarily by mail and at the expense of the Company. Certain officers and directors of the Company and persons acting under their instruction may also solicit proxies on behalf of the Board of Directors by means of telephone calls, personal interviews and mail at no additional expense to the Company. The Notice of Internet Availability of Proxy Card and this Proxy Statement are being sent to shareholdersMaterials (the “Notice”) was first mailed on or about March 23, 2015.15, 2018.

Voting Rights

Only holders of record of the Company’s Common Stock, no par value (“Common Stock”), on February 27, 2015,March 2, 2018, are entitled to notice of and to vote at the Annual Meeting. On that date, 17,633,39313,488,364shares of Common Stock were outstanding and entitled to vote. Each shareholder has one vote per share on all matters coming before the Annual Meeting. The shareholders of the Company do not have cumulative voting rights in the election of directors. Abstentions and brokernon-votes are not counted in determining the number of votes required for the election of a director or passage of any matter submitted to the shareholders. Abstentions and brokernon-votes are counted for purposes of determining whether a quorum exists.

IfWhether or not you plan to attend the enclosed Proxy Card is properly executed and returned priormeeting in person, to ensure the Annual Meeting,presence of a quorum, please vote over the shares represented thereby will be votedInternet or by telephone as specified therein.instructed in these materials as promptly as possible. If a shareholder executes and returns a proxy card, but does not specify otherwise, the shares represented by the shareholder’s proxy will be voted: (i) for the election of each of the two director nominees listed below under “Election of Directors”; (ii) for the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2015;2018; (iii) for the advisory approval of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC; and (iv) in the discretion of the person or persons voting the proxies, on such other business as may properly come before the Annual Meeting or any adjournments thereof.

Voting Instructions and Information

The enclosed proxy is solicited on behalf of the Board of Directors of Churchill Downs Incorporated, a Kentucky corporation (“Company,” “CDI,” or “CHDN”) for use at the Company Annual Meeting of Shareholders to be held on April 23, 2015, or at any adjournment thereof (“Annual Meeting” or “2015 Annual Meeting of Shareholders”).

When and where is our Annual Meeting?

We will hold our Annual Meeting on Thursday,Tuesday, April 23, 201524, 2018 at 9:00 a.m., PacificEastern Daylight Saving Time, at the Four SeasonsThe Knickerbocker Hotel, Seattle, located at 99 Union Street, Seattle, Washington 98101.6 Times Square, New York, New York 10036.

How are we distributing our proxy materials?

We are usingIn accordance with the rulerules and regulations adopted by the SEC, instead of the United States Securities and Exchange Commission (the “SEC”) that allows companies to furnishmailing a printed copy of our proxy materials to their shareholders using theeach shareholder of record (the “full set delivery” option; however,option), we are furnishing proxy materials to our shareholders over the Company may elect to use theInternet (the “notice only” option in the future.option). A company may use either option, “notice only” or “full set delivery,” for all of its shareholders or may use one method for some shareholders and the other method for others. Pursuant toAlthough the rules governingCompany has previously used the “full set delivery” option, a company may providewe believe the “notice only” process expedites shareholders’ receipt of proxy materials in paper form and send them via standard United States mail or, ifreduces the costs and environmental impact of our Annual Meeting. The Company will bear the entire cost of the solicitation.

On March 15, 2018, we began mailing a shareholder has previously elected, may provide the proxy materials in electronic form and send them via e-mail. In additionNotice to delivering materials toour shareholders the Company is obligated to post all proxy materialscontaining instructions on a publicly available website and provide information to shareholders about how to access that website.

this Proxy Statement and our 2017 Annual Report on FormAccordingly, each shareholder will10-K and vote online, as well as instructions on how to receive paper copies of these documents for shareholders who so select. This Proxy Statement and the Company’s proxy materials by mail or, if previously agreed to by a shareholder, by e-mail. These proxy materials include the Notice of2017 Annual Meeting of Shareholders, proxy statement, proxy card and Annual Report. These materialsReport are also available athttp://www.churchilldownsincorporated.com/proxy.

Who can vote at the Annual Meeting?

You are entitled to vote or direct the voting of your shares of CHDN’s Common Stock if you were a shareholder of record or if you held CHDN Common Stock in “street name” at the close of business on Friday, February 27, 2015March 2, 2018 (the “Record Date”). On that date, 17,633,39313,488,364 shares of CHDN Common Stock were outstanding. Each share of CHDN Common Stock held by you on the Record Date is entitled to one vote.

How many votes must be present to hold the Annual Meeting?

We must have a “quorum” to conduct the Annual Meeting. A majority of the outstanding shares entitled to vote, represented in person or by proxy, shall constitute a quorum. Once a share is represented for any purpose at the Annual Meeting, it will be deemed present for quorum purposes for the remainder of the Annual Meeting and for any adjournment of the Annual Meeting, unless a new record date must be set for the adjourned meeting.

What do I need to attend, and vote at, the Annual Meeting?

If you plan on attending the Annual Meeting, please remember to bring photo identification with you, such as a driver’s license. In addition, if you hold shares in “street name” and would like to attend the Annual Meeting, you must bring an account statement or other acceptable evidence of ownership of CHDN Common Stock as of the close of business on the Record Date. Only CHDN shareholders of record as of the close of business on the Record Date will be permitted to attend the Annual Meeting. In order to vote at the Annual Meeting if you hold shares in “street name,” you will also need a valid “legal proxy,” which you can obtain by contacting your account representative at the broker, bank or similar institution through which you hold your shares.

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What proposals will be voted on at the Annual Meeting?

The following proposals from the Company will be considered and voted on at the Annual Meeting:

You may also vote on any other business as may properly come before the meeting or any adjournment thereof, including matters incident to the meeting’s conduct.

How does the Board of Directors recommend I vote?

CDI’s Board of Directors unanimously recommends that you vote:

How do I vote?

You may cast your vote in one of four ways:

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How can I revoke my proxy or substitute a new proxy or change my vote?

You can revoke your proxy or substitute a new proxy by use of any of the following means:

For a Proxy Submitted by Internet or Telephone

For a Proxy Submitted by Mail

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Security Ownership of Certain Beneficial

Owners and Management

The following table sets forth information as of February 27, 2015,March 2, 2018 (except as otherwise indicated below) regarding the beneficial ownership of the Common Stock by the only persons known by the Company to beneficially own more than five percent (5%) of the Common Stock, each director and director nominee of the Company, each named executive officer (as defined in “Executive Compensation-SummaryCompensation—2017 Summary Compensation Table” herein), and the Company’s directors and executive officers as a group. Except as otherwise indicated, the persons named in the table have sole voting and investment power with respect to all of the shares of Common Stock shown as beneficially owned by them. The percentage of beneficial ownership is calculated based on17,633,39313,488,364shares of Common Stock outstanding as of February 27, 2015.March 2, 2018. We are not aware of any pledge of our Common Stock or any other arrangements the operation of which may at a subsequent date result in a change in control of our Company.

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Executive Officers of the Company

The Company’s executive officers, as listed below, are elected annually to their executive offices and serve at the pleasure of the Board of Directors.

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Election of Directors

(Proposal No. 1)

At the Annual Meeting, shareholders will vote to elect three (3)the two (2) persons identified below to serve in Class I and one (1) person to serve in Class III of the Board of Directors and to hold office for a term of three (3) years expiring at the 20182021 Annual Meeting of Shareholders for those in Class I and for a term of two (2) years expiring at the 2017 Annual Meeting of Shareholders for the individual in Class III and thereafter until their respective successors shall be duly elected and qualified or until the earlier of their resignation, death or removal.

The Amended and Restated Bylaws of the Company provide that the Board of Directors shall be composed of not fewer than three (3) nor more than fifteen (15) members, the exact number to be established by the Board of Directors, and further provide for the division of the Board of Directors into three (3) approximately equal classes, of which one (1) class is elected annually to a three (3) year term. Currently the Board of Directors is comprised of ten (10) directors, with three (3) directors in Class I, four (4) directors in Class II and three (3) directors in Class III. The Board of Directors has established the size of the Board to be composed of eight (8) members, effective at the Annual Meeting.

Three (3) directors, each of whom are in Class I, will not be standing for reelection: G. Watts Humphrey, Jr., Robert L. Evans, and Craig J. Duchossois. In order to establish approximately equal classes of directors, William C. Carstanjen has agreed to move from a Class II director to a nominee for shareholder approval as a Class I director at the Annual Meeting. In addition, upon the recommendation of the Nominating and Governance Committee, the Board has nominated Ms. Karole F. Lloyd for election as a director nominee in Class I at the Annual Meeting. Ms. Lloyd was originally recommended to the Nominating and Governance Committee by an executive officer of the Company.

The Company has a mandatory retirement age policy in the Corporate Governance Guidelines with regard to directors, which provides that a person is not qualified to serve as a director unless he or she is less than seventy (70) years of age on the date of election. However, theThe Board believes that it is important to monitor overall Board performance and suitability, and pursuant to the policy, upon the recommendation of the Nominating and Governance Committee, the Board may waive the effective date of mandatory retirement. There are two directorsNo director nominees in Class I that will have met the mandatory retirement age at the Annual Meeting, Craig J. Duchossois and G. Watts Humphrey, Jr. On February 18, 2015, the Nominating and Governance Committee voted to recommend waiving the mandatory retirement age policy in favor of Messrs. Craig J. Duchossois’ and G. Watts Humphrey, Jr.’s continued service to the Board. In reaching its decision to waive the policy, the Nominating and Governance Committee considered the fact that Messrs. C. Duchossois and Humphrey are both highly experienced directors of the Company with regard to executive compensation, strategy, and governance. Furthermore, Mr. Humphrey has served the Company and the Board extremely well in the role of lead independent director. Upon the recommendation of the Nominating and Governance Committee, the Board of Directors concluded that Messrs. C. Duchossois’ and Humphrey’s experience and skill sets advance the strategic goals of the Company and the Company would benefit from their continued service as directors, and on February 24, 2015, the Board of Directors waived the effective date of the mandatory retirement age for Messrs. C. Duchossois and Humphrey.Meeting.

At the Annual Meeting, the four (4) persons named in the following table will be nominated on behalf of the Board of Directors for election as directors in Class I and Class III, respectively. The Nominating and Governance Committee has recommended, and the Board has approved, the nomination of these persons. The nomineesthe two (2) persons named in the following table for election as directors in Class I. As noted above, Mr. Carstanjen currently serves as a member of Class II and has agreed to stand for election and serve as members ofa Class I director ifre-elected,and Class III, respectively,Mr. Humphrey, Mr. Evans, and have agreed to serve if re-elected. Mr. Craig Duchossois are not standing forre-election as directors at the Annual Meeting.

Directors are elected by a plurality of votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present. With each shareholder having one vote per share to cast for each director position, the nominees receiving the greatest number of votes will be elected. The biographical information for our directors and director nominees below includes information regarding certain of the experiences, qualifications, attributes and skills that led to the determination that such individuals are qualified to serve on the Board of Directors.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE FOLLOWING DIRECTORS IN CLASS I AND III.NAMED BELOW.

UNLESS OTHERWISE INSTRUCTED, IT IS THE INTENTION OF THE PERSONS NAMED IN THE PROXY TO VOTE THE SHARES REPRESENTED THEREBY “FOR” THE ELECTION OF THE CLASS I AND CLASS III DIRECTORS NAMED BELOW.

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Nominees for Election asof Directors

The following table sets forth information relating to the Class I and Class III directorsdirector nominees of the Company who are proposed to the shareholders for election to serve as directors for terms of three (3) years, and two (2) years, in the case of Aditi J. Gokhale, expiring at the 20182021 Annual Meeting of Shareholders, or 2017 Annual Meeting of Shareholders for Aditi J. Gokhale, and thereafter until their respective successors shall be duly elected and qualified or until the earlier of their resignation, death or removal.

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The Board of Directors has no reason to believe that any of the nominees will be unavailable to serve as a director. If any nominee should become unavailable before the Annual Meeting, the persons named in the enclosed Proxy,proxy, or their substitutes, reserve the right to vote for substitute nominees selected by the Board of Directors.

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Continuing Directors

The following tables set forth information relating to the Class II and Class III directors of the Company who will continue to serve as directors until the expiration of their respective terms of office.

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Emeritus Directors

Emeritus Directors are available for counsel, but do not attend meetings of the Board of Directors and do not vote on matters presented to the Board. The Company’s Amended and Restated Bylaws provide that a person shallmay not be qualified for election as a director due to age, pursuant to any mandatory retirement age requirement adopted by the Company. The Company’s Corporate Governance Guidelines provide that the Board will establish and maintain a policy with regard to a mandatory retirement age fornon-employee directors. The current policy provides that a person is not qualified to serve as a director unless he or she is less than seventy (70) years of age on the date of election. However, the Board believes that it is important to monitor overall Board performance and suitability and, upon the recommendation of the Nominating and Governance Committee, the Board may waive the effective date of mandatory retirement. Each director shall become a

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Director Emeritus upon the expiration of his or her current term following the date on which he or she is no longer qualified for election due to age, provided the effective date of such mandatory retirement has not been waived. The Emeriti Directors are Charles W. Bidwill, Jr., Catesby W. Clay, J. David Grissom, James F. McDonald, Thomas H. Meeker, Carl F. Pollard, and Darrell R. Wells.

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Director Compensation for Fiscal Year Ended December 31, 20142017

During 2014, directors received an annual retainer fee of $50,000; directors who served as committee chairmen of the Compensation Committee and the Nominating and Governance Committee received an additional $10,000 and $7,500 for a total annual retainer fee of $60,000 and $57,500, respectively; theEachnon-employee director who served as committee chairman of the Audit Committee received an additional retainer fee of $15,000 for a total annual retainer fee of $65,000. Directors were paid $2,000 for each meeting of the Board of Directors and $1,500of the Company receives the compensation set forth below (all fees shown are annual fees, except for each committee meeting they attended, either in person or by teleconference, and for each special ad hoc meeting infees), which they participated. Finally, each director received a grant of restricted share units, with an aggregate grant date fair value of $75,000. Directors who did not reside in Louisville may request reimbursementchange from the compensation levels set for their travel expenses. Only non-employee directors receive this compensation.2016:

In 2014,2017, we provided the following annual compensation to ournon-employee directors: directors. Mr. Carstanjen, our CEO, is not separately compensated for his service on our Board. Please see the 2017 Summary Compensation Table for a summary of the compensation paid to our CEO with respect to 2017.

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Share Ownership Guidelines

As memorialized in the Corporate Governance Guidelines, the Board expects all directors to display confidence in the Company by ownership and retention of a meaningful amount of the Company’s stock. As a result, each director is expected to own shares of the Company’s stock with a fair market value equal to five (5) times the director’s annual retainer. Each director appointed or elected to the Board has five (5) years from the date of appointment or election to the Board to meet this requirement. Compliance is measured at the five (5) year anniversary date of the director’s appointment or election. Each director’s continuing compliance with the ownership guidelines will be measured in the year he or she stands forre-election and will be considered as one of the criteria for nomination by the Nominating and Governance Committee. Mr. Carstanjen is excluded from the chart below, as he is subject to maintaining holdings of Company stock equal to at least six (6) times his base annual salary, pursuant to the Key Executive Stock Ownership and Retention Guidelines, as further described in the “Executive Stock Ownership Guidelines” section below. Furthermore, deferred shares acquired by directors under the Churchill Downs Incorporated 2005 Deferred Compensation Plan and RSUs granted as director compensation are included for purposes of measuring compliance with the Company’s share ownership guidelines.

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Corporate Governance

The Board of Directors is responsible for providing effective governance over the Company’s affairs. The Company’s corporate governance practices are designed to align the interests of the Board and management with those of our shareholders and to promote honesty and integrity throughout the Company.

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During the past year, we continued to review our corporate governance policies and practices and compare them to those suggested by various authorities in corporate governance and the practices of other public companies. We have also reviewed guidance and interpretations provided by the SEC and NASDAQ.

Copies of the current charter, as approved by our Board, for each of our Audit, Compensation and Nominating and Governance Committees and a copy of our Corporate Governance Guidelines, Code of Conduct for Employees and Code of Ethics for Principal Financial Officers (along with any amendments or waivers related to the Code of Conduct or Code of Ethics) are available on our corporate website,http://www.churchilldownsincorporated.com, under the “Investors” heading.

Shareholders may send communications to the Company’s Board of Directors addressed to the Board of Directors or to any individual director c/o Churchill Downs Incorporated, 600 N. Hurstbourne Parkway, Ste. 400, Louisville, Kentucky 40222. Any correspondence addressed to the Board of Directors in care of the Company is forwarded to the Board of Directors without review by management.

Board Leadership Structure

On August 27, 2014, the Company’s ChairmanG. Watts Humphrey, Jr. is retiring as a director and Chief Executive Officer, Robert L. Evans, transitioned to the singular role of Chairman of the Board of Directors. Mr. Evans’ transition was a partDirectors, and current Vice-Chairman, R. Alex Rankin, will be appointed Chairman of the Board’s strategy toward delegating certain responsibilities from the combined roleBoard of the Chairman and Chief Executive OfficerDirectors, each effective immediately prior to the former President and Chief Operating Officer, Mr. Carstanjen, who assumed the role of Chief Executive Officer simultaneously with Mr. Evans’ transition. Even with the transition of titles and job responsibilities, theAnnual Meeting on April 24, 2018. The Board deemedcontinues to deem it advisable to maintain certain aspects of its governance structure to assure effective independent oversight. These governance practices included maintaining: (1) a lead independent director (see below for a description of the lead independent director role), and (2)maintaining executive sessions of the independent directors after each Board meeting, and annual performance evaluations of the Chairman and Chief Executive Officer by the independent directors.

No less frequently than once every two yearsdirectors, and separate roles for the Board will continue to appoint a lead director from among its independent directors. On February 24, 2015, G. Watts Humphrey, Jr. was re-appointed as the lead independent director. The lead independent director’s authorityChief Executive Officer and responsibilities include: (i) presiding over all meetingsChairman of the Board at which the Chairman is not present, including the executive sessions of the independent directors, (ii) serving as liaison between the Chairman and the independent directors, (iii) approving meeting agendas, schedules and information sent to the Board, (iv) the ability to call meetings of the independent directors, and (v) ex-officio status on each committee of the Board that the lead independent director is not already a voting member.Directors.

Oversight of Company Risk

As part of its responsibility to oversee the management, business and strategy of the Company, the Board of Directors has overall responsibility for risk oversight. While the Board of Directors as a whole performs certain risk oversight functions directly, such as its ongoing review, approval and monitoring of the Company’s fundamental business and financial strategies and major corporate actions, the majority of the Board of Directors’ risk oversight functions are carried out through the operation of its committees. Each committee oversees risk management within its assigned areas of responsibility, as described below in the discussion of committee responsibilities. The Audit Committee is primarily responsible for overseeing the Company’s risk assessment and

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risk management practices, as well as its compliance programs. The Compensation Committee’s responsibilities include oversight of the risks associated with the Company’s compensation policies and practices, as well as its managerial development and succession plans. The Nominating and Governance Committee oversees the risks related to the Company’s corporate governance structure and processes.

Share Ownership Guidelines

The Board expects all directors and senior executive officers (those holding the title of executive vice president or above) to display confidence in the Company by ownership and retention of a meaningful amount of the Company’s stock. As a result, each director is expected to own shares of the Company’s stock with a fair market value equal to five (5) times the director’s annual retainer. Each director who was serving as such on the date of adoption of the ownership guidelines (March 15, 2007) had five (5) years from such date to meet this requirement and each director appointed or elected since such date will have five (5) years from the date of appointment or election to the Board to meet this requirement. Initial compliance was measured in March 2012, the five (5) year anniversary date of the adoption of the ownership guidelines (for directors in office on March 15, 2007) or at the five (5) year anniversary date of the director’s appointment or election (for new directors). Each director’s continuing compliance with the ownership guidelines will be measured in the year he or she stands for re-election and will be considered as one of the criteria for nomination by the Nominating and Governance Committee. As illustrated by the chart below, all directors proposed for re-election during the 2015 Annual Meeting of Shareholders are compliant with the ownership guidelines. Furthermore, deferred shares acquired by directors under the Churchill Downs Incorporated 2005 Deferred Compensation Plan and restricted stock units granted as director compensation are included for purposes of measuring compliance with the Company’s share ownership guidelines.

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Board Meetings and Committees

Eight (8)Five (5) meetings of the Board of Directors were held during the last fiscal year. AllDuring the fiscal year, all directors attended at least seventy-five percent (75%)75% of their Board and committee meetings for the aggregate number of meetings of the Board of Directors and the meetings of the committee(s) onperiod for which they served in 2014.served. The Company encourages its directors to attend the Annual Meeting each year. AllEach of the directors then serving on the Board, with the exception of Craig J. Duchossois, attended the Company’s Annual Meeting on April 22, 2014.25, 2017.

The Board has determined that all of the directors of the Company who served during any part of the last completed fiscal year are “independent directors,” as defined under NASDAQ Rule 5605(a)(2), except Robert L. Evans.Evans and William C. Carstanjen.

As required by the Company’s Corporate Governance Guidelines, the Board of Directors currently has four (4) standing committees: the Executive, Audit, Compensation, and the Nominating and Governance Committees.

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No Director Emeritus serves on any Board committee. The structurecurrent composition of the committees is illustrated in the table below, along with the number of meetings held in 2014.2017.

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Executive Committee

The Executive Committee is authorized, subject to certain limitations set forth in the Company’s Amended and Restated Bylaws, to exercise the authority of the Board of Directors between Board meetings. The members of the Executive Committee are G. Watts Humphrey, Jr., who serves as Chairman, Robert L. Fealy, and R. Alex Rankin. Mr. Rankin will replace Mr. Humphrey as Chairman following Mr. Humphrey’s retirement, and Daniel P. Harrington will become a member of the Executive Committee, all to be effective at the Annual Meeting. The Executive Committee does not meet on a regular basis, but instead meets as and when needed.

The Executive Committee did not meet during the last fiscal year.

Audit Committee

The primary purposes of the Audit Committee are to assist the Board of Directors in fulfilling its responsibility in monitoring management’s conduct of the Company’s financial reporting process and overseeing the Company’s risk assessment and risk management practices. Under its charter, the Audit Committee is generally responsible for monitoring the integrity of the financial reporting process, systems of internal controls and financial statements and other financial reports provided by the Company to any governmental or regulatory body, the public or other users thereof, as well as overseeing the processes by which management assesses the Company’s exposure to risk and evaluating the guidelines and policies governing the Company’s monitoring, control and minimization of such exposures.

The Audit Committee’s responsibilities are as follows:

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The officers

We have a periodic basis, such as the Company’s internal auditor presenting its audit plan annually, the Company’s chief compliance officer presenting updates on itsformal enterprise risk management program that falls under the leadership of our executive team. The purpose of this program is to promote risk-intelligent decision making and, on a case by case basis as necessary.in turn, increase the likelihood of achieving our operational objectives. Our Board of Directors is regularly advised of potential organizational risks and supporting mitigating policies.

The members of the Audit Committee are Daniel P. Harrington, who serves as Chairman, James F. McDonald,Ulysses L. Bridgeman, Jr., and R. Alex Rankin. The Company’s Board of Directors has determined that all members of the Company’s Audit Committee are independent as defined under NASDAQ Rule 5605(a)(2) andRule 10A-3(b)(1) of the Securities and Exchange Commission. As of December 17, 2014, Mr. Leonard S. Coleman, Jr. ceased serving on the Audit Committee as he tendered his resignation from the Board of Directors. Mr. Coleman’s replacement is Mr. James F. McDonald.SEC.

Four (4) meetings of the Audit Committee were held during the last fiscal year. The Audit Committee reviews the adequacy of its charter on an annual basis.

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The Board of Directors has determined that Daniel P. Harrington is an “audit committee financial expert” as defined by regulations promulgated by the SEC.

Compensation Committee

Responsibilities of the Compensation Committee

The Compensation Committee of the Board of Directors operates under a written charter and is comprised entirely of directors meeting the independence requirements of NASDAQ and Rule10C-1 of the Securities and Exchange Commission.SEC. The Board established the Compensation Committee to assist it in discharging the Board’s responsibilities relating to compensation of the Company’s chief executive officer and(“CEO”), each of the Company’s other executive officers.officers, and the Company’snon-employee directors. The Compensation Committee has overall responsibility for decisions relating to all compensation plans, policies and perquisites as they affect the chairman, chief executive officer (“CEO”)CEO and other executive officers.officers and may form and delegate authority to subcommittees when it deems appropriate. Furthermore, the Committee has created a special Subcommittee comprised of three twonon-employee directors for the purposes of approving any stock grants or other stock related transactions to officers or directors of the Company, as required under SEC Rule16b-3. This Subcommittee is comprised only of “outside directors” as defined by Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and ishistorically was responsible for approving all performance standards for officers for any pay program that had been intended to qualify as “performance based compensation” under this section of the Code. Historically, there was an exception from Section 162(m)’s limit on deductibility for new awards that qualify as “performance-based compensation” meeting the requirements under Section 162(m). With the enactment of tax reform in late 2017, the “performance-based compensation” exception has been eliminated except with respect to certain grandfathered arrangements. The members of this special Subcommittee are Daniel P. Harrington and R. Alex Rankin, James F. McDonald, and Daniel P. Harrington.Rankin.

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During 2014,2017, the Compensation Committee was composed of four (4)three (3) independent directors. Mr. Leonard S. Coleman, Jr., prior to his resignation from the Board of Directors, presided over all of the meetings held by the Compensation Committee in 2014. Post Mr. Coleman’s resignation, the Compensation Committee is currently comprised of the following members:directors: R. Alex Rankin, who serves as Chairman, Craig J. Duchossois, and Daniel P. Harrington,Harrington. Douglas C. Grissom and James F. McDonald.Robert L. Fealy joined the Compensation Committee upon approval by the Board of Directors at its February 27, 2018 meeting.

Five (5)Three (3) meetings of the Compensation Committee were held during the last fiscal year. Members of management attended each meeting.the meetings. The agendaagendas for each meeting wasthe meetings were determined by the Chairman of the Compensation Committee with management’s input prior to each meeting.the meetings.

The Compensation Committee’s responsibilities are as follows:

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The Compensation Committee’s charter reflects these responsibilities, and the Compensation Committee and the Board periodically review and revise the charter.

Compensation Committee Interlocks and Insider Participation

None of the directors who served on the Compensation Committee at any time during the last fiscal year were officers of the Company or were former officers of the Company. None of the members who served on the Committee at any time during fiscal 20142017 had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K.S-K, other than the transactions involving the Stock Repurchase Agreement and the Amended and Restated Stockholder’s Agreement (each as defined and discussed below under the caption “Certain Relationships and Related Transactions”) with respect to Mr. Craig J. Duchossois. Finally, no executive officer of the Company serves, or in the past fiscal year has served, as a director or member of the compensation committee (or other board committee performing equivalent functions) of any entity that has one or more of its executive officers serving on the Board of Directors or the Compensation Committee.

Compensation Risk Assessment

The Compensation Committee performed an assessment of whether risks arising from the Company’s compensation policies and practices for all employees during 2014,2017, includingnon-executive officers, are reasonably likely to have a material adverse effect on the Company. TheEach policy and plan was evaluated based on certain elements of risk, including, but not limited to, (i) the mix of fixed and variable pay, (ii) types of performance metrics, (iii) performance goals and payout curves, (iv) payment timing and adjustments, (v) equity incentives, and (vi) stock ownership requirements and trading policies. Based on this evaluation, an assessment of each plan was created, along with an overall assessment of compensation risk to the Company. After evaluation and discussion, the Committee determined that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

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Nominating and Governance Committee

The Company’s Nominating and Governance Committee operates under a written charter and is responsible for establishing the criteria for and reviewing the effectiveness of the Company’s Board of Directors. In addition, the Nominating and Governance Committee provides oversight with regard to the Company’s programs for dealing with business ethics and other governance issues.

Pursuant to the Company’s Corporate Governance Guidelines and its Policy on Board Composition, the Nominating and Governance Committee determines criteria regarding personal qualifications needed for Board membership and the Committee considers, reviews qualifications and recommends qualified candidates for Board membership. In doing so, the Nominating and Governance Committee reviews the composition of the Board to identify skill sets and qualifications which are represented in order to determine which ones are needed. In addition, the Nominating and Governance Committee reviews the Company’s strategic plan to determine its needs with regard to Board composition. While the Company does not have a formal policy on diversity for members of the Board of Directors, the Company’s Corporate Governance Guidelines and its Policy on Board Composition specifically provide that diversity of race and gender, as well as general diversity of backgrounds

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and experience represented on the Board of Directors are factors to consider in evaluating potential directors. The Nominating and Governance Committee sometimes employs an outside consultant to identify nominees with the skill sets, experience and backgrounds that suit the Company’s needs.

A candidate for the Company’s Board of Directors should possess the highest personal and professional ethics, integrity and values and be committed to representing the long-term interests of the Company’s various constituencies. In considering a candidate for nomination as a member of the Board, the Nominating and Governance Committee will consider criteria such as independence; occupational background, including principal occupation (i.e., chief executive officer, attorney, accountant, investment banker, or other pertinent occupation); level and type of business experience (i.e., financial, lending, investment, media, racing industry, technology, etc.); diversity in race and gender;gender, number of boards on which the individual serves;serves, and the general diversity of backgrounds and experience represented on the Board. The Nominating and Governance Committee periodically reviews the Company’s Corporate Governance Guidelines and its Policy on Board Composition and recommends changes to the Board. It also evaluates the performance of the Board as a whole and provides feedback to the Board on how the directors, the committees and the Board are functioning. Finally, it evaluates Board of Director practices at the Company and other well-managed companies on an annual basis and recommends appropriate changes to the Board and/or its practices.

The Nominating and Governance Committee receives and considers issues raised by shareholders or other stakeholders in the Company and recommends appropriate responses to the Board. The Nominating and Governance Committee will consider recommendations for director candidates submitted by shareholders. Such questions, comments or recommendations should be submitted in writing to the Nominating and Governance Committee in care of the Office of the Secretary at 600 N. Hurstbourne Parkway, Ste. 400, Louisville, Kentucky 40222. The Nominating and Governance Committee, in having adopted criteria to be considered for membership on its Board, considers such candidates applying such criteria and follows the recommendation process noted above. Recommendations by shareholders that are made in accordance with these procedures will receive the same consideration as recommendations from other sources.

The members of the Nominating and Governance Committee, each of whom is independent as defined by the NASDAQ listing standards, are R. Alex Rankin,Robert L. Fealy, who serves as Chairman, Ulysses L. Bridgeman andJr., Richard L. Duchossois.Duchossois, and R. Alex Rankin. Douglas C. Grissom joined the Nominating and Governance Committee upon approval by the Board of Directors at its February 27, 2018 meeting.

Two (2)Three (3) meetings of the Nominating and Governance Committee were held during the last fiscal year.

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Proposal to Ratify the Appointment of PricewaterhouseCoopers LLP as the

Company’s Independent Registered Public Accounting Firm for 20152018

(Proposal No. 2)

On February 24, 2015,27, 2018, the Board of Directors, on recommendation from the Audit Committee, selected PricewaterhouseCoopers LLP (“PwC”) to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2015.2018. PwC has served as the Company’s independent registered public accounting firm since the Company’s 1990 fiscal year.

Although the Company’s Amended and Restated Bylaws do not require that the Company’s shareholders ratify the appointment of PwC as the Company’s independent registered public accounting firm, the Board of Directors is submitting the appointment of PwC to the Company’s shareholders for ratification as a matter of good corporate governance. This proposal will be approved if the votes cast favoring the action exceed the votes cast opposing the action. If the appointment is not ratified, the Company’s Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if the appointment

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is ratified, the Company’s Audit Committee, in its sole discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its shareholders.

Representatives of PwC are expected to be present at the Annual Meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so.

THE BOARD OF DIRECTORS AND THE AUDIT COMMITTEE RECOMMEND THAT THE SHAREHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2015.2018.

UNLESS OTHERWISE INSTRUCTED, IT IS THE INTENTION OF THE PERSONS NAMED IN THE PROXY TO VOTE THE SHARES REPRESENTED THEREBY IN FAVOR OF THE PROPOSAL TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2015.2018.

Independent Public Accountants

Audit Fees

The audit fees incurred by the Company for services provided by PwC (i) for the year ended December 31, 2013,2016, were $1,125,000$2,263,500 and (ii) for the year ended December 31, 2014,2017, were $1,429,100.$2,313,600. Audit fees include services related to the audit of the Company’s consolidated financial statements, the audit of the effectiveness of internal control over financial reporting, involvement with registration statement filings, statutory audits and consultations related to miscellaneous SEC and financial reporting matters.

Audit-Related Fees

During 2013each of 2016 and 2014,2017, the Company incurred $0$3,500 and $0,$68,600, respectively, in fees respectively, for assurance and related services performed by PwC that were reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported in the preceding section.

Tax Fees

Tax fees incurred by the Company for services provided by PwC (i) in 2013,2016, were $105,000,$48,082, and (ii) in 2014,2017, were $90,100.$144,039. Tax fees include services related to tax return preparation for a related entity, tax consultation and tax advice.

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All Other Fees

All other fees incurred by the Company for services provided by PwC relate to the use of Comperio,Inform, PwC’s accounting research software, and PwC’s disclosure checklist software, which amounted to $1,800$3,600 in both 20132016 and 2014.$4,500 in 2017. The Audit Committee has considered whether the provision ofnon-audit services to the Company is compatible with maintaining PwC’s independence.

The Audit Committee has adopted a policy of evaluating pre-approvalandpre-approving of services provided by the independent auditors on acase-by-case basis. The Audit Committeepre-approved all audit and permissiblenon-audit services provided by the independent auditors in 2014.2017.

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Advisory Vote onto Approve Executive Compensation

(Proposal No. 3)

Pursuant to Section 14A of the Securities Exchange Act of 1934, the Company’s shareholders are entitled to a vote to approve, on an advisory andnon-binding basis, the compensation of the Company’s named executive officers (“NEOs”) as disclosed in this Proxy Statement in accordance with SEC rules. In accordance with the preference expressed by shareholders in the 20112017 advisory vote regarding the frequency of voting on the Company’s executive compensation program, the Company is holding such advisory votes on an annual basis.

The Company has a “pay-for-performance”“pay-for-performance” philosophy that forms the foundation of all decisions regarding compensation of the Company’s NEOs. This compensation philosophy, and the program structure approved by the Compensation Committee, is central to the Company’s ability to attract, motivate and retain individuals who can achieve superior financial results while also aligning the interests of the executives with the interests of shareholders over the long-term. This approach has resulted in the Company’s ability to attract and retain the executive talent necessary to guide the Company successfully during a period of growth and transformation. Please refer to “Compensation Discussion and Analysis—Executive Summary” for an overview of the compensation of the Company’s NEOs.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the policies and practices described in this Proxy Statement. At the Annual Meeting, shareholders will be asked to approve the compensation of the Company’s NEOs by voting FOR the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission,SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure in this Proxy Statement.”

This vote is advisory and therefore not binding on the Company. The Board of Directors and Compensation Committee value the opinions of the Company’s shareholders. Should there be a significant vote against the named executive officer compensation as disclosed in this Proxy Statement, the Board will consider those shareholders’ concerns and will evaluate whether any actions are necessary to address those concerns.

This proposal will be approved if the votes cast favoring the action exceed the votes cast opposing the action.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE ADVISORY RESOLUTION RELATING TO THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

UNLESS OTHERWISE INSTRUCTED, IT IS THE INTENTION OF THE PERSONS NAMED IN THE PROXY TO VOTE THE SHARES REPRESENTED THEREBY IN FAVOR OF THE PROPOSAL TO APPROVE THE ADVISORY RESOLUTION RELATING TO THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

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Compensation Discussion and Analysis

Executive Summary

Churchill Downs Incorporated is a leader in the entertainment, racing,an industry-leading provider of horseracing, casino gaming, and social gaming markets.online account wagering on horseracing. As such, our long-term success depends on our ability to attract, engage, motivate and retain highly talented executives and key employees to achieve our strategic plans and deliver financial returns to shareholders over both the short-term and long-term. One of the key objectives of our executive compensation program is to link executives’ pay to their performance and their advancement of the Company’s long-term performance and business strategies. Other objectives include aligning the executives’ interests with those of shareholders and encouraging high-performing executives to remain with the Company over the course of their careers. We believe that the amount of compensation for each Named Executive Officer (NEO) reflects each individual’s extensive management experience, high performance and exceptional service to Churchill Downs Incorporated and our shareholders. We also believe that the Company’s compensation strategies have been effective in attracting executive talent and promoting performance and retention.

This Compensation Discussion and Analysis describes the Company’s executive compensation policies and programs and how they apply to our NEOs (the senior executives included in the 20142017 Summary Compensation Table on page 35)38). It also describes the actions and decisions of the Compensation Committee of the Board of Directors (the “Compensation Committee” or “Committee”) and the Committee’s special Subcommittee (the “Subcommittee”), both of which oversee the executive compensation program and determine the compensation of the NEOs. A detailed discussion of the Committee’s structure (including the Subcommittee), roles and responsibilities, and related matters can be found under “Compensation Committee” on pages 20-21.19-21.

2014 Compensation HighlightsOur long-term incentive goals are based on operational results that the Committee believes drive Company and shareholder success over multi-year performance periods. Certain metrics the Company uses to determine this success are as follows (see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the10-K

NEO pay opportunity for fiscal 2014 was set in February 2014 considering relevant factors, including fiscal 2013 performance. We have highlighted several key executive compensation decisions below:Fiscal Year 2017 for reconciliation of these metrics to the most directly comparable GAAP measures, and the discussion of Long-Term Incentives beginning on page 31):

As illustrated in the short-term performance-based incentivefollowing chart, the Company’s stock price has increased to $232.70 per share as of December 29, 2017 from $89.65 per share as of December 31, 2013.

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Big Fish Games

On November 29, 2017, the Company entered into a definitive Stock Purchase Agreement (the “Purchase Agreement”) to sell its mobile gaming subsidiary, Big Fish Games, Inc. and its specified subsidiaries (“Big Fish”), to Aristocrat Technologies, Inc. (the “Transaction”). On January 9, 2018, the Company completed the Transaction for an aggregate purchase price of $990.0 million, subject to adjustments set forth in the Purchase Agreement. In connection with the Transaction, the Company and Mr. Paul Thelen (an NEO of the Company and then-current President of Big Fish), entered into a separation agreement and release effective as of the closing date of the Transaction. Although Mr. Thelen is no longer an employee of the Company, Mr. Thelen is included in the 2017 compensation target from 80% to 100%disclosures as an NEO for Mr. Carstanjen in recognition of his promotion to Chief Executive Officer;

Executive Compensation Philosophy and Core Principles

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The fundamental philosophy of the Compensation Committee is to provide an executive compensation program that links pay to business strategy and performance in a manner that is effective in attracting, motivating and retaining key executives while also aligning the interests of the executives with the interests of shareholders over the long-term. In order to continue to support the Company’s high-performance culture, the Company’s key principles underlying the executive compensation program are to:

The CompanyCompensation Committee will continue to adjust its pay practices to support these principles over time.

2014 “Say-on-Pay”2017“Say-on-Pay” Advisory Vote on Executive Compensation

The Compensation Committee monitors closely the results of the annual advisory “say-on-pay”“say-on-pay” vote, and considers such results as one of the many factors considered in connection with the discharge of its responsibilities. In 2014,2017, the Company provided shareholders a “say-on-pay”“say-on-pay” advisory vote on its executive compensation program, as disclosed in the Company’s 20142017 proxy statement. At the 20142017 Annual Meeting, approximately 77%98% of our shareholders voting on the proposal expressed support for the compensation of our NEOs as disclosed in the 2017 proxy statement. The Compensation Committee considered the results of the 20142017 advisory vote and also considered other factors in evaluating the Company’s executive compensation programs as discussed in this Compensation Discussion and Analysis, including the advice of the Committee’s independent compensation consultant. The Committeeconsultant and the substantial changes made to the program in 2015, and therefore did not make any changes to the Company’s executive compensation program and policies specifically in light ofresponse to the aforementioned vote by our shareholders.2017“say-on-pay” vote.

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Role of Management and Independent Advisors

The Compensation Committee meetings are regularly attended by the Chairman, the CEO, the Senior Vice President of Human Resources, who is responsible for leading some of the discussions regarding the Company’s compensation programs as well as being responsible for recording the minutes of the meeting, and in-house corporate counsel.the Company’s General Counsel. The Committee may request the participation of management or outside consultants as it deems necessary or appropriate. The Committee regularly reports to the Board on compensation matters and annually reviews the Chairman’s and CEO’s compensation with the Board.

The Committee and the Subcommittee may also meet in executive session without any members of management, for the purpose of among other things discussing and approving compensation for the Chairman and the CEO.CEO, as well as other topics. The CEO reviews the performance of, and makes recommendations to, the Committee regarding total compensation to be paid to the Company’s executive officers other than himself, and the Chairman, including salary, annual bonus, and long-term incentive awards, as appropriate. Management also develops and presents to the Committee recommendations for the performance measures and targets to be used to evaluate annual performance incentives.

After the end of each fiscal year, the Committee conducts a review of the Chairman’s and the CEO’s performance. As part of this process, the Chairman and the CEO provideprovides a written self-assessment report. The Committee sets the compensation of the Chairman and the CEO in executive session after considering its assessment of the Chairman’s and the CEO’s performance, including due consideration of theirthe CEO’s self-assessment reports.report. Neither the ChairmanCEO nor the CEO, or any other members of management are present during this session.

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The Committee has sole discretion, at the Company’s expense, to retain and terminate independent advisors, including sole authority to approve the fees and retention terms for such advisors, if it shall determine the services of such advisors to be necessary or appropriate. Such advisors are engaged by, and report directly to, the Committee. During 2014Since March 2015, the Committee was assisted in fulfillinghas retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its responsibilities by Semler Brossy Consulting Group, LLC (“Semler Brossy”).independent compensation consultant. The scope of the engagement of this advisor during 2014 included:FW Cook includes:

Semler Brossy

FW Cook did not provide any services to the Company other than advising the Committee as provided above. All of the decisions with respect to the Company’s executive compensation programs are made by the

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Committee alone and may reflect factors and considerations other than, or that may differ from, the information and recommendations provided by management or its outside advisor. The Compensation Committee assessed Semler Brossy’sFW Cook’s independence in light of the SEC requirements and NASDAQ listing standards and determined that Semler Brossy’sFW Cook’s work did not raise any conflict of interest or independence concerns.

Factors Used to Evaluate Pay Decisions

The Company does not currently manage compensation for individual executives to a specific total compensation value or based on a strategy of positioning pay to a specific “percentile” of market practices. Rather, the Company seeks to obtain and retain the services of executives who bring the skills, experience, and motivation deemed necessary to significantly expand the scope and scale of the Company’s operations. Therefore, compensation decisions for individual executives are made based on a balance of many subjective factors as evaluated by the CEO in the case of his direct reports (with Committee review and approval) and the Committee in the case of the Chairman and the CEO. These factors include, in order of importance for each element of pay:include:

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Each element of compensation is evaluated independently based on the role of that component in achieving the Company’s overall compensation objectives, with an emphasis on long-term incentives and retention.

In making executive pay decisions, the Committee relies substantially on the advice and experience of its independent advisor and the Chairman, and the CEO to evaluate the reasonableness of executive pay. As there are few direct peers to the Company, the Committee does not rely directly on peer practices to establish pay levels or programs for its executives. Rather, the Committee determines pay levels and practices based on the talent needs of the organization as defined by our strategy of growing and diversifying revenues and with the guidance of the Committee’s independent advisor.

WhileNevertheless, the Committee periodically conducts reviewsbelieves that it is important for the Company to stay competitive on compensation and the Committee, with the assistance of pay relative to broad market practices, based on data provided by the Committee’s independent advisor, conducts periodic reviews of compensation relative to set context forsimilarly situated businesses, which can lead to adjustments in compensation and program offerings. The compensation peer group was selected to represent a reasonable match to the Company in terms of size and business characteristics. The group consists of public, similarly sized gaming companies (including traditional gaming, casinos, and internet/software gaming to reflect the Company’s programs from time to time,diverse operations), where the Committee does not usemedian revenue and market compensation practices to drive decision making. Rather, the Committee evaluates market data to see how and whycapitalization approximate the Company’s compensation practices differ fromrevenue and market practicescapitalization. The Company periodically reviews the peer group and to gauge where Company compensation falls relative to the marketmakes adjustments, as deemed necessary, for continued appropriateness as a secondary testmarket reference for informing executive compensation levels. For fiscal year 2017, the peer group was: Activision Blizzard, Inc. (ATVI); Blucora Inc. (BCOR); Boyd Gaming Corporation (BYD); Choice Hotels International Inc. (CHH); Electronic Arts Inc. (EA); Glu Mobile Inc. (GLUU); ILG Inc. (ILG); Isle of reasonableness. Capri Casinos, Inc. (ISLE); MGM Resorts International (MGM); Penn National Gaming, Inc. (PENN); Pinnacle Entertainment Inc. (PNK); RealNetworks Inc. (RNWK); Scientific Games Corp (SGMS);Take-Two Interactive Software, Inc. (TTWO); Tropicana Entertainment Inc. (TPCA); Wynn Resorts, Limited (WYNN); and Zynga Inc. (ZNGA). Following the sale of Big Fish, the peer group was adjusted to better reflect the Company’s current mix of traditional gaming and horseracing companies. The current peer group beginning in 2018 is: Aristocrat Leisure Limited (ALL); Boyd Gaming Corporation (BYD); Caesars

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Entertainment Corp. (CZR); Eldorado Resorts Inc. (ERI); Gaming and Leisure Properties Inc. (GLPI); Madison Square Garden Company (MSG); MGM Resorts International (MGM); Penn National Gaming, Inc. (PENN); Pinnacle Entertainment Inc. (PNK); Red Rock Resorts Inc. (RRR); Scientific Games Corp (SGMS); Tropicana Entertainment Inc. (TPCA); and Wynn Resorts, Limited (WYNN).

It is the opinion of the Committee that the pay decisions made by the Committee are reasonable relative to pay provided to executives at other similar public companies, based on the Committee’s experience, the performance expectations established for each element of pay, and consultation with the Committee’s independent advisor.

Components of Compensation

During 2014,2017, the Company used multiple components to provide an overall compensation and benefits package designed to attract and retain the needed level of executive talent for the Company.

Base Salary

The Committee’s philosophy is that base salaries should meet the objectives of attracting and retaining the executive talent needed to grow the business and create shareholder value. Therefore, the Committee establishes base salaries for new hires based on the advice of management and its independent advisor regarding reasonable market pay practices, and comparisons with the executive’s peers at the Company. Upon promotion or other adjustment of responsibilities, executives receive base pay increases that are intended to be commensurate with their new role or responsibilities and the pay levels for colleagues at similar levels in the organization and market pay practices, with more modest rates of increase thereafter. For example, the table below illustrates the salary adjustments made in 2014 to reflect new roles and responsibilities for Mr. Evans, Mr. Carstanjen, and Mr. Mudd. Mr. Tse received a salary adjustment in 2014 to more appropriately reflect his position as an Executive Vice President with the Company. Increases in base salary affect the opportunity for annual incentive payouts under the incentive compensation plan.

In 2014,2017, the following adjustments were made to the base salaries for the Company’s NEOs:

The salary adjustments above further illustrate the Committee’s overall philosophy toward compensation. Based upon Mr. Evans’ transition from the role of Chief Executive Officer to Chairman, his base salary was

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decreased to reflect his new set of duties. Conversely, Mr. Carstanjen’s base salary was increased, commensurate with the Committee’s expected level of contribution from Mr. Carstanjen, and in recognition of his enhanced role as Chief Executive Officer. Similarly, Mr. Mudd and Mr. Tse also received an increase in base salary commensurate with the expected contributions from Mr. Mudd in his new role as President and Chief Financial Officer, and additional goals and objectives placed on the Executive Vice President and General Counsel. Mr. Gay did not receive any additional increase to his base salary, in 2014, other than a routine cost of living adjustment, as his base salary was previously adjusted by the Committee to reflect compensation commensurate with his role as President of Churchill Downs Interactive.

Executive Annual Incentive Plan

Bonus awards or incentive compensation paid with respect to 20142017 were determined by the Committee per the terms of the Executive Annual Incentive Plan (2013) (“EAIP”), a shareholder approved incentive plan. Pursuant to the EAIP, the Committee established performance goals for the Company and bonus opportunities for the 20142017 performance year. In analyzing proposed awards against target and maximum payouts, the Committee used the goals as its roadmap to determine whether to issue awards above, at, or below each NEO’s target award. As it has done historically, for 2014, the Committee sets performance goals for 2017, based upon a comprehensive assessment of the Company against its long-term strategic goals and its ability to achieve said goals with its current leadership team and key employees. Therefore, individual performance by the Company’s NEOs (as measured by various factors, including, but not limited to, continued growth and diversification of the Company’s asset portfolio through acquisitions, customer and employee satisfaction, and the completion of certain specified legislative and regulatory outcomes), and unit performance led by some of the Company’s key employees (as measured by, among other things, increases in sales and revenues) led by some of the Company’s key employees also played a significant

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role in setting and evaluating the Company’s performance goals, and determining the proper level of compensation deemed necessary to incent the NEOs and key employees to continue to drive growth.

20142017 Performance GoalsGoals.. For 2014,2017, the Committee set the following goals (per segment) for the Company.EAIP. These goals were used to assess the NEOs’ performance and determine EAIP payouts as disclosed in the 20142017 Summary Compensation Table on page 35.38. The Committee, in setting the goals, considered the challenges to the Company; however, each goal was deemed achievable, representing requirements forbut requiring a superior level of performance. The goals are expressed generally as follows:follows, with no specific weighting attributed to any one goal:

Overall

Racing

Gaming

OnlineTwinSpires

OtherBig Fish Games

Other

Incentive Opportunities. Under the EAIP, the NEOs have target award opportunities, which the Committee reserves the right to exercise negative discretion against if it so chooses. For NEOs, these targetstarget and maximum

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opportunities are determined by the Committee based on internal pay equity considerations, market data, impact on total short-term compensation and the expected level of contribution of each NEO to the Company’s performance goals and growth objectives.

The Compensation Committee approves the target and maximum incentive levels, proposed byafter considering recommendations from the CEO for each NEO excluding(except the Chairman,CEO), at the beginning of each year. The Committee independently evaluates and approves the target and maximum incentive levels for the CEO at the beginning of each year. During 2014,2017, the target and maximum awards assigned to the Chairman, the CEO and the other NEOs were as follows:

20142017 Performance Results. In determining the payouts, the Compensation Committee exercises its discretion to determine whether to payout at, above, or below the target opportunities based upon its review of the outcomes evaluated against Company and individual performance. The Compensation Committee established a minimum corporate Adjusted EBITDA performance threshold for 20142017 of $125$185 million, which was required to be achieved before any incentives were eligible to be paid under the EAIP for 2014.2017. The Compensation Committee certified that actual Adjusted EBITDA for 2014compensation purposes for 2017 exceeded this threshold and that executives were eligible for payouts under the EAIP for 2014.2017.

In evaluating 20142017 performance, the Compensation Committee considered (i) the Company’s continued diversification in 2014 including the acquisitionrevenue ($1.3 billion, an increase of Big Fish Games, one3%), net income ($140.5 million, an increase of the world’s largest producers30%), diluted net income per share ($8.77, an increase of 37%), and distributorsAdjusted EBITDA for compensation purposes ($370.3 million, an increase of mobile and online games,3%), each as compared to 2016; (ii) total attendance at the 140^threcord all sources handle for Kentucky Derby and Oaks wasweek of $285.1 million, up 7% compared to 2016; (iii) strong hosting 277,977 fans,organic growth from our Calder, Riverwalk and (iii) wagering from all-sources onOxford casino properties; (iv) capital expenditures of $117 million; and (v) the Kentucky Derby totaled $186.6 million.growth of TwinSpires.com handle to $1.3 billion, up 16.9% compared to 2016. The Compensation Committee determined that these achievements contributed to benefits being realized by the Company’s shareholders.

The results for amounts earned by the NEOs for 20142017 under the EAIP are reflected in the 20142017 Summary Compensation Table on page 3538 in the column labeled “Non-Equity“Non-Equity Incentive Plan Compensation”.Compensation.” As noted above, the Company exhibited strong overall financial performance in 2014, which exceeded the performance goals.2017. The top four NEOs (Mr. Evans, Mr. Carstanjen, Mr. Mudd, and Mr. Tse) were viewed by the Committee to be the primary parties responsible for meeting and exceedingthe actual performance relative to the performance goals in 2014.established with respect to 2017. The Compensation Committee, after considering the Company’s overall Company performance, awarded the NEOs EAIP awards above the target, as shown in the table on page 35, to reward them for the Company’s outstanding performance.38. As such, the NEOs were awarded an EAIP award at the following percentage of their target incentive award: Mr. Evans 124%, Mr. Carstanjen 167%156% ($2,250,000), Mr. Mudd 140%138% ($900,000), Mr. Tse 123%Ms. Dall 163% ($675,000), and Mr. Gay 99%Thelen 100% ($339,488). TheseThe awards for Mr. Carstanjen, Mr. Mudd, and Ms. Dall were made pursuant to the EAIP and as a reward for the NEOs respective roles in driving performance during the period ending December 31, 2014.

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Long-Term Incentives

Corporate Long-Term Incentive Plan.The objective of the Company’s long-term incentive compensation program is to support the entrepreneurial mindset desired byof management andby the Board of Directors by providing an opportunity to earn significant equity in the Company for achieving significant performance improvements.

The

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In 2015, the Compensation Committee did not make any new long-term incentive awards in 2014 asapproved the executives continuedadoption of the Executive Long-Term Incentive Compensation Plan (the “ELTI Plan”), pursuant to be eligible towhich the NEOs may earn time- and performance-based awards granted in 2013 (for executives other than the Chairman, who was granted awards under his amended and restated employment agreement in 2010). The 2013 New Company LTIP and prior Chairman awards are described in more detail below.

2013 New Company LTIP. For 2013,variable equity payouts based upon the Company optedachieving certain key performance metrics. The purpose of the ELTI Plan is to developprovide participants with a new long-term incentive program utilizingthat is market-competitive and provides long-term incentives on a regular, predictable, and annual basis. Eligible participants (as determined by the Committee) may be members of the Company’s senior executive team and/or such other executives and key contributors as the Committee may designate from time to time. As and to the extent determined by the Committee as part of the annual compensation planning process for participants, the CEO will participate in the ELTI Plan at a rate determined by the Committee. No individual will have an automatic right to participate in the ELTI Plan. The ELTI Plan was initially adopted pursuant to the 2007 Omnibus Stock Incentive Plan (the “New Company LTIP”). As a way to continue to encourage innovation, an entrepreneurial approach, and careful risk assessment,is now administered under the 2016 Omnibus Stock Incentive Plan beginning in addition to2017. A summary of the retention of key executives,2017 terms and applicable award opportunities, granted by the Company’s new incentive program offered new long-term incentive compensation opportunities to the Company’s NEOs, with the exception of Robert L. Evans. Restricted stock awards were granted,Committee to the NEOs, is provided below.

During the beginning of 2017, the CEO recommended employees to the Committee for participation in the ELTI Plan for 2017 and their respective specific levels of proposed participation. Awards granted to eligible employees under the NewELTI Plan may be in the form of RSUs, Performance Share Units (“PSUs”), or both. To pursue the key objective of linking executive compensation with Company LTIP,performance, the Committee delivered at least 50% of the 2017 awards as PSUs (Mr. Thelen was awardedtwo-thirds (2/3) of his 2017 award as PSUs). On January 9, 2018, Mr. Thelen terminated his employment with the Company as part of the Company’s sale of Big Fish Games, Inc. (“Big Fish”). As part of the Separation Agreement and Release entered into between Mr. Thelen, Big Fish, and the Company, the Company terminated Mr. Thelen’s RSU agreements and PSU agreements and paid out 22,477 shares to Mr. Thelen as of the date of the separation agreement (less 8,839 shares withheld for taxes), calculated as 100% of his outstanding, unvested RSU awards (3,888 shares), 100% of his PSU awards at target for the performance period July 1, 2015 through December 31, 2017 (10,280 shares), and 50% of the remaining outstanding PSU awards (8,309 shares).

The Committee approved the 2017 NEO awards (for the36-month performance period of January 1, 2017 through December 31, 2019) under the ELTI Plan on March 21, 2013,February 23, 2017. The 2017 awards are as follows:

With respect to the RSU awards, the RSUs vest in one third (1/3) increments on each of December 31, 2017, December 31, 2018 and December 31, 2019, respectively, generally subject to certainthe executive’s continued employment through the applicable vesting conditions.date. The Company intends to settle the vested RSUs in shares of Company common stock.

The 2013 restricted stockWith respect to the performance period and related PSU awards under the ELTI Plan for July 1, 2015 through December 31, 2017, the actual performance was certified by the Compensation Committee in its February 2018 meeting (with a TSR at 88%, in the top 12% of the Russell 2000 over the performance period) as set forth below, with settlement of the PSUs occurring on February 28, 2018:

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During 2016, the Company changed its definition of Adjusted EBITDA to exclude changes in Big Fish Games deferred revenue for financial reporting purposes. For compensation purposes, Adjusted EBITDA targets under the 2015 and 2016 awards were divided between time-vestingset prior to this change and, stock price-vesting restricted stock (weighted approximately 25%therefore, performance for these awards will be evaluated based on the definitions of Adjusted EBITDA and 75%, respectively). All time-based restricted shares will vest by December 31, 2016,Cash Flow in place at the time of the establishment of the awards, per below:

The Adjusted EBITDA and Cash Flow results reported above do not total to the daily closing NASDAQ stock market priceactual results shown on page 33 for the Company’s Common Stock (collectively, referred to2015-2017 performance period, as the “Stock Price Triggers”). Stock Price Trigger 1 was $75 (earned on May 24, 2013) and each successive Stock Price Trigger ($85 (earned on December 19, 2013), $95 (earned on September 29, 2014), and $105 (yet to be earned)) is at least 10% above the preceding Stock Price Trigger, with the vesting of the stock price shares to occur in 25% installments for each Stock Price Trigger earned. In order for a Stock Price Trigger to be reached the Company must successfully achieve and maintain for a 20 consecutive trading daythat performance period a specific daily share closing price value.

As an additional key executive retention device, the vesting of Stock Price Triggers 1 and 2, achieved in 2013, was subject to the NEOs’ continued employment until the first anniversary of the grant date, March 21, 2014. If the Company does not achieve the final Stock Price Trigger ($105) during the five-yearinclude all of fiscal year 2015. The performance period NEOs under this program will forfeit any incentive compensation opportunity tied to that Stock Price Trigger.

The amounts earned by each participating NEO with regard toon page 33 is for the 2014 achievement of the third triggerinitial performance period under the New Company LTIP are as follows:

Long-Term Incentives forELTI Plan, July 1, 2015 through December 31, 2017. Subsequent awards under the Chairman. Mr. Evans, in his previous role as the CEO, received a significant grantELTI Plan include performance periods of Company stock (with both time- and performance-based vesting) as a component of his original 2006three full years.

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employment agreement and his amended and restated employment agreement in 2010 and therefore he has not been, nor is he currently, a participant in the New Company LTIP. The Committee believes that having a separate incentive plan for the Chairman from the incentive plan for the rest of the executive team in this context is appropriate and beneficial as it allows the Chairman to evaluate the Company’s long-term performance and make recommendations to the Committee regarding the pay of the CEO without bias to his own compensation from the Company. Mr. Evans was not granted any equity-based awards in 2011, 2012, 2013, or 2014.

Executive Stock Ownership Guidelines

Our Board of Directors has adopted minimum stock ownership guidelines for our executive officers and directors.officers. The principal objective of the guidelines is to enhance the linkage between the interests of shareholders and our executive officers and directors by requiring a meaningful, minimum level of stock ownership. The current guidelines provide that, within five (5) years of becoming subject to the stock ownership guidelines, our Chairman and our CEO should own shares valued at an amount equal to six times (6x) theirhis base salary, our President and CFOCOO should own shares valued at an amount equal to four times (4x) his base salary, our CFO should own shares valued at an amount equal to three times (3x) her base salary, and that all other executive officers should own shares valued at an amount equal to three times (3x) the executive’s base salary. Mr. James E. Gay is not an executive officer of the Company, therefore, he is not subject the aforementioned guidelines.

In 2014,2017, each executive subject to the ownership guidelinesNEO met or exceeded the guidelines:guidelines or, in the case of Ms. Dall, is expected to achieve the guidelines within the required five-year period:

Deferred Compensation Benefits

The Company’s philosophy is to provide retirement and savings benefits to executives which are commonly provided by other public companies. These benefits include:

401(k). The Company maintains a 401(k) Retirement Plan, which is a profit sharing plan that is intended to be a qualified retirement plan under Section 401(a) of the Code. The 401(k) Retirement Plan allows all employees who meet the eligibility requirements to become participants. Participants may make salary deferral contributions pursuant to Section 401(k) of the Code up to limits prescribed by the plan and the Code. The Company makes matching contributions with respect to such salary deferrals at a rate of 100% on the first 3% of compensation deferred and 50% on deferrals in excess of 3% of compensation deferred but no more than 5% of compensation deferred. Salary deferral contributions and matching contributions are fully vested at all times. Participants are allowed to direct investment of their accounts under the 401(k) Retirement Plan into as many as 2530 investment options. All assets of the 401(k) Retirement Plan are held in a trust whichthat is intended to be qualified under Section 501 of the Code.

Deferred Compensation Plan. The Company also maintains a Deferred Compensation Plan for select executives. The purpose of the plan is to provide eligible executives of the Company an opportunity to defer to a future date the receipt of base salary and bonus compensation for services and to receive matching contributions

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in similar fashion as provided by the Company’s 401(k) Retirement Plan for any base salary and bonus deferred beyond the limits imposed by the IRS for that plan. The Committee believes that a Deferred Compensation Plan is a normal and typical benefit for executives at companies similar to the Company and is necessary to attract and retain executive talent.

For purposes of determining earnings under the Deferred Compensation Plan, various hypothetical investment alternatives are selected by the Committee in its discretion. The Deferred Compensation Plan allows,

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but does not require, the Committee to receive input from participants regarding such investment alternatives. The current hypothetical investments selected by the Committee include 3337 investment return options for determining the rate of return to be credited on participant deferrals. Participants are allowed to choose among these investment return options in order to direct the hypothetical investments used to determine earnings under the Plan.

Life insurance contracts have been purchased by the Company to provide some or all of the benefits under the Deferred Compensation Plan. Other details regarding the Deferred Compensation Plan can be found in the Nonqualified Deferred Compensation Table, on page 39,42, and the accompanying narrative below.

Allowances and Other Benefits

The Company’s standard,non-cash executive benefits are Company-paid premiums on executive term life insurance and an optional supplemental long-term disability income plan for all of the NEOs.Mr. Carstanjen, Mr. Mudd, and Ms. Dall. These plans provide benefits which are similar to those provided to all employees, but extend the benefit levels to be appropriate to the income of the executive officers.

The Company’s executive perquisites, in 2014, were as follows:

The Company also previously provided for a miscellaneous perquisites allowance for each executive officer of $10,000, for Mr. Evans, Mr. Carstanjen, Mr. Mudd, and Mr. Tse, and $7,500 for Mr. Gay. However, this allowance was eliminated in late 2014.

Severance Benefits

The Committee believes that arrangements which provide benefits upon termination or a change in control of the Company support the goals of attracting and retaining qualified executives byexecutives. Such benefits include clarifying the terms of employment and reducing the risks to the executive in situations where the executive believes that either the Company may undergo a merger or be acquired or where the Company has tasked the executive to develop new markets or lines of business for the Company. In addition, the Committee believes that such agreements align the interests of executives with the interests of shareholders if a qualified offer to acquire the Company is made, in that each of the executives would likely be aware of or involved in any such negotiation and it is to the benefit of shareholders to have the executives negotiating in the best interests of the Company without regard to their personal financial interests. In 2014, the Committee, in lieu of negotiating individual severance agreements with each executive, adopted a form Executive Change in Control, Severance and Indemnity Agreement (the “Change in Control Agreement”). Each executive officer of the Company, namely Robert L. Evans, William C. Carstanjen, William E. Mudd, and Alan K. Tse,Marcia A. Dall have each executed a Change in Control Agreement on August 27, 2014.Agreement. The Change in Control Agreements, at the time of their execution, became immediately effective and each of the executive officer’sMr. Carstanjen’s and Mr. Mudd’s previously executed employment agreement terminated.

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Each Change in Control Agreement provides that, subject to the Company receiving a general release of claims from the executive, in the event the executive’s employment is terminated (i) by the Company, withoutother than for “Cause” (as defined in the Change in Control Agreement), “Disability” (as defined in the Change in Control Agreement), or death, or (ii) by the executive for “Good Reason” (as defined in the Change in Control Agreement), the executive will be entitled to receive an amount in cash equal to 1.5 times the sum of (a) the executive’s annual base salary and (b) the amount of the executive’s annual target bonus for the year in which the executive was terminated. In the event the termination occurs within the2-year period following a “Change in Control” (as defined in the Change in Control Agreement), the amount shall be 2.0 times the sum of (a) and (b) above. All equity-based awards in effect at the time of termination for the aforementioned reasons shall remain governed by the applicable plan or award agreement.

Each Change in Control Agreement provides further that, subject to the Company receiving a general release of claims from the executive, in the event the executive’s employment is terminated within the 2-year period following a “Change in Control” (as defined in the Change in Control Agreement) (i) by the Company, other than for “Cause” (as defined in the Change in Control Agreement), “Disability” (as defined in the Change in Control Agreement), or death, or (ii) by the executive for “Good Reason” (as defined in the Change in Control Agreement), the executive will be entitled to receive an amount in cash equal to 2 times the sum of (a) the executive’s annual base salary and (b) the amount of the executive’s annual target bonus for the year in which the executive was terminated.

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The Change in Control Agreements eliminated any taxgross-ups for excise taxes payable following a Change in Control.

Additional information regarding severance benefits may be found under “Potential Payments Upon Termination or Change in Control” on page 40.43.

Section 162(m) of the Code

As a publicly-traded company, we are subject to Section 162(m) of the Internal Revenue Code which limits our ability to deduct for U.S. income tax purposes compensation in excess of $1 million paid to certain executive officers of the NEOs unlessCompany. Historically, there was an exception for performance-based compensation meeting the compensation is performance-basedrequirements under Section 162(m). With the enactment of tax reform in late 2017, the performance-based compensation exception has been eliminated except with respect to certain grandfathered arrangements. The Compensation Committee considers tax deductibility to be an important, but not the sole or primary, considerationone of many factors to consider in setting executive compensation. Because the Compensation Committee also recognizes the need to retain flexibility to make compensation decisions that may not meet the standards of Section 162(m) when necessary to enable us to continue to attract, retain, and motivate highly-qualified executives, it reserves the authority to approve potentially non-deductible compensation.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the information appearing above under the heading “Compensation Discussion and Analysis” with management and, based on that review and discussion, has recommended to the Board of Directors that the “Compensation Discussion and Analysis” section be included in this Proxy Statement and the Company’s Annual Report on Form10-K for the year ending December 31, 2014.2017.

Compensation Committee of the Board of Directors:

R. Alex Rankin, Chairman

Craig J. Duchossois

Daniel P. Harrington

James F. McDonald

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20142017 Summary Compensation Table

The following table provides information regarding compensation earned by each individual who served as our Chairman, Chief Executive Officer, President & Chief FinancialOperating Officer, Executive Vice President & General Counsel,Chief Financial Officer, and oneour other executive officer employed at the end of 2014 who were the most highly compensated for 2014 (sometimes referred to in this proxy statement as the “Named Executive Officers” or “NEOs”).