The sport of kings has recently become all the rage with online sports betting sites, as bookmakers have been forming partnerships with horse-racing companies to attract and retain customers in the United States.
One such horse racing-related deal was announced this week, with DraftKings Inc. and Churchill Downs Inc. trumpeting a new, multi-year partnership. The agreement will bring pari-mutuel wagering on horse racing to DraftKings, which plans on launching a standalone app called “DK HORSE” in the months to come.
DraftKings intends to integrate its horse-racing app into its online sportsbook and other offerings in the future. However, it expects the standalone version to be available in 21 states initially, and to launch before next May’s Kentucky Derby.
“We are excited to collaborate with Churchill Downs Incorporated, not only to give our existing customers an opportunity to engage with pari-mutuel horse wagering, but also to acquire new customers efficiently during marquee horse racing moments,” DraftKings CEO Jason Robins said in a press release. “Due to the structure of the agreement, we expect this new product offering to be immediately profitable.”
One door closes, and another opens
Churchill Downs announced earlier this year that they would be pulling back from the online sports betting business themselves, after trying to make a go of it using their TwinSpires brand.
Instead, the Kentucky-based company pivoted to become a business-to-business provider of horse-race wagering to other bookmakers. That includes DraftKings, for which CDI will grant wagering rights to plenty of its races (like the Kentucky Derby), as well as additional events that it will secure on behalf of DraftKings.
The advance deposit wagering (ADW) technology for the partnership will be provided by TwinSpires.
“We believe the depth and quality of our online offering through TwinSpires is unmatched in horse racing,” CDI CEO Bill Carstanjen said in the release. “We are excited to establish this relationship with DraftKings and to deliver a full end-to-end white label ADW solution that will introduce their significant base of sports betting customers to horse racing wagering.”
Things are looking a little different around here! pic.twitter.com/S2gU4IKJpO
— Churchill Downs (@ChurchillDowns) November 29, 2022
CDI announced in September a similar deal with DraftKings' chief rival, FanDuel. Under the terms of that multi-year agreement, Churchill Downs will provide the tech and services FanDuel needs to allow customers to make pari-mutuel wagers on races using the FanDuel platform.
The interest in horse racing among legal sportsbooks is rising for a few different reasons, including that a few operators have longstanding ties to the sport, such as through parent companies that are based in Australia or Europe.
Another factor is the desire to give bettors something to bet on at all times, and there is seemingly a horse race being run somewhere in the world at any given hour of the day.
People who bet on horse races are probably likely to bet on other things as well, including other sports, making it possible to cross-sell them on additional products. Furthermore, horse-race wagering is available in states where other forms of sports betting are not, allowing gambling companies to introduce themselves in markets that may someday open for additional betting business.
A 'dominant' partnership
PointsBet, which now offers sports betting in 13 U.S. states, made an announcement in October that is consistent with those reasons. With customer acquisition and cross-selling on its mind, the Australia-based bookmaker said a subsidiary had struck a partnership deal with a division of the Stronach Group, "North America's dominant Thoroughbred horse racing company."
As part of the agreement, horse-racing betting products and content will be integrated into the PointsBet sportsbook app. A PointsBet-branded standalone platform is also being developed.
“It is anticipated that the PointsBet-branded [advance deposit wagering] solution will launch in early 2023, delivering PointsBet an online betting presence in over 30 U.S. states, including in jurisdictions in which we do not currently offer sports betting,” PointsBet CEO Sam Swanell said in October. “Significantly, the expanding database of racing customers… will also be cross-sold into PointsBet’s sports betting and iGaming businesses.”
Other bookmakers are diving into horse racing as well. Caesars Entertainment Inc. has both its Caesars Sportsbook app and its Caesars Racebook app, which is available in eight states, including, most recently, Maryland.
BetMGM, meanwhile, has a horse-racing app that is available in Florida, Louisiana, and Ohio.
"The BetMGM Horse Racing app is a key part of our market expansion plans and will accelerate our continued growth into 2022," BetMGM CEO Adam Greenblatt said in a December 2021 press release.
