Churchill Downs Inc. has announced that it is shutting down its online casino and sports betting business, TwinSpires, as it looks to focus on the horse racing market.
In an announcement made during a conference call with investors on Thursday, CEO Bill Carstanjen said:
“When the Supreme Court overturned the ban on sports betting in 2018, we had high hopes for building a profitable business in this space. We have profitable retail books in four of our casinos.
However, the online betting and casino space is highly competitive with an ever-increasing number of participants. Many are pursuing maximum market share in every state with little regard for short-term or potentially even long-term profitability.
We will exit the (business-to-consumer) online wagering space. This isn’t the result we wanted, but it is the prudent next step.”
Carstanjen noted that TwinSpires will not shut down immediately but will begin to wind down over the next six months.
During the call, he cited the loss of an additional $13.9 million from the prior year’s quarter due to a $9.5 million increase in the loss from Sports and Casino as a result of increased marketing and promotional activities as a contributing factor to the closure. However, he noted that the company is still fully committed to its horse wagering business saying:
“We remain excited about TwinSpires horse racing. Pre-COVID, we were about 40 percent of the horse racing market. That jumped to 60 percent in 2020 and then in 2021 saw a steady state of 50 percent market share, so this is a very successful business.”
In December of 2021, the company fielded rumors that it was set to offload its sports wagering and online casino division which was estimated at the time to be worth somewhere in the region of $1.5 billion. Amid those rumors, the company continued to forge ahead with a launch in New Jersey, the eighth state that the sportsbook was available in.
Despite the division losing money during 2021, the news of the shuttering of its sports wagering and online casino division in preference to an outright sale came as a surprise to investors.
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