On June 7th, California Chrome will have a chance to join racing royalty by being the first horse in 36 years to win the Triple Crown. For those unfamiliar with the feat, each year, the best three-year-old thoroughbreds contend to win three races, each held at a historic racetrack in the United States. The first, the Kentucky Derby, is held at Churchill Downs Racetrack in Louisville on the first Saturday in May. Two weeks after, at Pimlico Race Course in Baltimore, the Preakness Stakes occurs. And lastly, after a three week rest, the contestants come to Long Island, NY for the oldest of the three races, the Belmont Stakes, which takes place at Belmont Park. After more than a century of races, and many close calls and disappointments, only 11 horses have succeeded in winning the Triple Crown.

Now, with a contender two-thirds of the way there, Belmont will likely draw more than 100,000 visitors on June 7th (the record is approximately 120,000 set in 2004 when longshot Birdstone upset heavy favorite Smarty Jones, another Triple Crown hopeful). Millions of other Americans will have horse racing on their minds, and some will certainly turn to twinspires.com, which is the country’s largest online wagering platform. TwinSpires is owned by Churchill Downs (CHDN).

Although Churchill Downs owns other businesses, like casinos and hotels, horse racing is responsible for a huge percentage of its revenues and profits. In addition, peak racing season, which includes the Triple Crown competitions, falls in the second calendar quarter. Not shocking, the June interim is vital to the company’s success. For example, in 2013, the company achieved share earnings of $3.07, of which 92% was derived in the second quarter. As for this year, due to the Triple Crown possibility, elevated wagering activity may well push that percentage even higher.

Somewhat surprising, on the first trading day following California Chrome’s victory at Pimlico, Churchill’s stock price declined modestly, while all of the major market benchmarks registered small gains. Perhaps investors were simply not interested in the increased wagering that will surely occur at twinspires.com ahead of the last Triple Crown race. Or, investor malaise may have stemmed from Churchill’s recent performance. More specifically, the company has incurred two consecutive quarters of share losses, which was attributed to higher-than-expected acquisition-related costs, as well as elevated gaming expenses. As a result of the share deficits, the stock price has backed off a bit, and is now trading 10%-15% below its 52-week high.

Looking ahead, in our view, the rare possibility of a Triple Crown at least earns Churchill some consideration from the investment community. If the weather cooperates and an injury is avoided (the last Triple Crown hopeful, I’ll Have Another, won the 2012 Derby and Preakness, but got hurt and did not race in the Belmont), a huge crowd of betters will converge on Long Island on June 7th. Countless others will be parked in front of televisions with a computer close by in order to wager on the event. If all goes to plan, Churchill will experience elevated wagering activities and, if California Chrome is victorious, it could lead to renewed interest in horse racing.

For a more detailed review of Churchill Downs’ recent financial results and prospects, along with a detailed analysis of the stock’s investment merits, we urge our subscribers to peruse our full report in The Value Line Investment Survey.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.