The thoroughbred horse-racing season is winding down, but Churchill Downs Inc. is ramping up its efforts to partner with the operators of online sports betting sites for pari-mutuel wagering.
Churchill Downs (CDI) announced earlier this year that it would be exiting the consumer-facing side of mobile sports betting, as the Kentucky Derby's owner was pessimistic about the potential profitability of that business.
However, CDI still wants to keep a toehold in the retail sector of legal sports betting and remains bullish on online betting on horse racing, which it still offers via its TwinSpires platform.
Moreover, the Kentucky-based company is keen on striking partnerships with online sportsbook operators, such as FanDuel, which announced an arrangement with CDI in September that will allow FanDuel to offer users pari-mutuel wagering on horse racing.
“Our team has done a nice job of carefully, yet quickly, exiting the online sports and casino business while maintaining the retail sports operations in our gaming facilities,” said Bill Carstanjen, CEO of CDI, during an October 27 call for analysts and investors. “While we continue to like retail sports wagering, our interest in online sports has shifted to the [business-to-business] model focused on providing technology and horse-racing content to facilitate pari-mutuel wagering on third-party sports wagering platforms.”
Carstanjen added that the company’s TwinSpires team is in the process of negotiating more of those deals.
“If successfully completed, each of these partnerships will enable the sports-wagering platform to distribute online horse racing content to their U.S. sports betting customers,” the CEO said.
A big fan of horse racing
The comments came after Churchill Downs reported net revenue of $383.1 million for the three months that ended September 30, down from $393 million a year earlier. Profit was $57 million for the third quarter, lower than the $61.4 million in net income booked for the three months that ended September 30, 2021.
Nevertheless, CDI announced during the quarter that it had reached a multi-year agreement with FanDuel Group related to horse racing. Under the terms of the deal, Churchill Downs is providing technology and services to FanDuel that will allow the latter’s customers to start placing pari-mutuel wagers on horse racing in 2023 using the FanDuel Sportsbook and TVG.
“CDI will provide FanDuel wagering rights to horse racing content owned or controlled by CDI, including the Kentucky Derby, and will receive customary content fees when FanDuel accepts wagers on CDI-owned content,” the company said in a press release. “FanDuel will also receive exclusive television rights to the racing content of all CDI thoroughbred racetracks, including Churchill Downs Racetrack, once its existing non-Derby media rights deal expires in 2023.”
Tomorrow's the day! We can't wait to see everyone at @keenelandracing for #BC22! ???? pic.twitter.com/SgGBVQWBOl
— Breeders' Cup (@BreedersCup) November 3, 2022
The FanDuel approach is one that Churchill Downs hopes to replicate in the United States, especially since the company has decided to exit the consumer-facing online sports betting business.
CDI’s efforts could put it and its partners in a position to offer betting on the biggest horse-racing events in the world next year, such as the Kentucky Derby.
Those partnerships would be in addition to the brick-and-mortar gambling properties that CDI owns and operates in eight states, which boast eight retail sportsbooks as well. The company also announced recently it had closed its $2.75-billion acquisition of gaming-related assets from Peninsula Pacific Entertainment LLC, including Del Lago Resort and Casino in Waterloo, NY.
Meanwhile, the 2022 horse-racing season is winding down in North America — with one notable exception.
The Breeders’ Cup World Championships begin on Friday at Keeneland Race Course in Lexington, Ky. The 14-race event will offer combined prize money of more than $30 million, including $6 million for the 39th running of the Longines Breeders’ Cup Classic on Saturday.
