Churchill Downs considers turning TwinSpires into B2B product
CDI chief executive officer William Carstanjen made the announcement in the company’s Q2 earnings call to investors where he outlined the TwinSpires B2B horse racing strategy.
“We intend to be a leading distributor of horse racing content, either directly to convert to customers of TwinSpires or under a B2B model that enables the online distribution of horse racing content to millions of new customers who have opened online sports wagering accounts.”
Carstanjen pointed to the retail horse racing operator’s extensive institutional knowledge of pari-mutuel wagering as a key USP for the business:
“Given our expertise and extensive knowledge of pari-mutuel wagering on horse racing, we have the technical expertise, access to racing content and technology to seamlessly integrate pari-mutuel wagering into existing third-party online sports wagering platforms,” he said.
“We will also provide user interfaces and ancillary services that may be necessary or desired by online sports wagering platforms.”
Carstanjen additionally argued the synergistic effects that the offering would have for the Kentucky Derby, which is held at Churchill Downs, as well as its wider portfolio of racetracks.
“The strategy will also enable us to offer sports wagering sponsorships for the Kentucky Derby and to generate incremental content fees for Churchill Downs Racetrack as well as our other racetracks.”
Carstanjen’s comments came with CDI posting record Q2 profits as Covid-era restrictions were dropped, as well as buoyed by a one-time $291m (£239.4m/€285m) land sale.
The strategy comes in the wake of the failure of CDI’s wider sports betting and igaming offerings, leading to the decision to exit the vertical the previous quarter. In the previous quarter earnings call, Carstanjen cited the competitiveness of the sector to explain why the new division had not performed as expected.
“When the US Supreme Court overturned the federal ban on sports betting in May of 2018, we had high hopes for the potential to build a profitable business in this space,” said Carstanjen.
“However, the online sports betting and online casino space is highly competitive with an ever-increasing number of participants that the states have licensed.”
“Because we do not see for us a path in which this business model delivers predictable and acceptable margins for at least several years, if ever, we have decided to exit the B2C online sports betting and igaming space over the next six months.”