Churchill Downs to Move from Online Sports Betting to Increased Horse Betting
Churchill Downs, the owner of Kentucky Derby, has announced that it is moving away from online and mobile sports betting and other digital casino games to focus more on horse racing.
According to CEO Bill Carstanjen, as reported to CNBC, the company is changing its strategy because of the cost and low returns operating in the sports betting industry. Churchill Downs was one of the many operators that entered the competitive market after the supreme government legalized sports betting in 2018.
However, as Carstanjen stated, the company found out that online sports betting profit margins are very small, and the expenses regarding technical infrastructure and players' endorsements are too high. Churchill Downs is not the only operator with these challenges, as other entities in the market are currently facing such issues.
With the unsavory realities of the sports betting industry, the firm plans to double down on horse racing. This is making because wagering on horse racing online has contributed immensely to the company's success, with margins of around 30% historically. Churchill Downs seeks more potential partners for its Twinspires racing app.
The latest announcement by Churchill Downs is surprising to several quarters since the company appointed a new president of TwinSpires and Online Gaming in January.
We remain absolutely committed and excited about TwinSpires Horse Racing as its top line, bottom line, and margins to continue to demonstrate that this is a special online business with a sustainable, scalable and unique business model.