The owner of the Kentucky Derby plans to offer legal sports betting in its home state on the very first day it’s able, the company’s chief executive officer says.
Churchill Downs Inc. CEO Bill Carstanjen said Thursday that they intend to have retail sportsbooks open at its historical horse racing machine (HRM) venues on September 7, the day event wagering is scheduled to start in the Bluegrass State. CDI will also add a new sports bar in the simulcast wagering facility at the Churchill Downs racetrack in time for the retail wagering launch that same day.
The mobile component of Kentucky sports betting won't begin until a few weeks later, on September 28. As a racetrack operator, CDI can have up to three partners for online sports betting sites and already has at least one deal signed, with FanDuel, for access to the Kentucky market.
“Retail sports betting in our HRM venues will provide another incentive for new and existing customers to come to our properties,” Carstanjen said during a conference call with analysts and investors. “We also monetized a couple of the online sports betting licenses we have in Kentucky with [business-to-business] partners, including one with FanDuel.”
B2B buds
The comments came after Louisville-based CDI reported financial results for the second quarter that ended June 30, which included the 149th running of the Kentucky Derby at Churchill Downs and record levels of wagering on the race. CDI also reported record net revenue of $768.5 million during the three months, up from $582.5 million a year earlier, although profit dipped to $143 million from $339.3 million.
The TwinSpires segment of CDI generated $139.1 million in revenue during the second quarter, up slightly from the $138.5 million booked for the same three months of 2022. Churchill Downs attributed the bump in receipts to a $3.4-million increase in revenue tied to the business-to-business (B2B) services it provides to online sportsbook operators such as DraftKings and FanDuel.
That gain was tamped down by a $2.8-million reduction in revenue in connection with CDI's decision to exit the consumer-facing online sports betting business last year. TwinSpires still offers online wagering on horse racing in numerous states, but only provides mobile sports betting in Arizona.
“We were pleased this quarter to see the beginning of the benefits from our B2B expansion strategy,” Carstanjen said. “Our TwinSpires and United Tote businesses are now receiving B2B fees related to providing and settling wagers on horse races for FanDuel and DraftKings.”
