Churchill Downs Inc. to Abandon Online Sports Betting

In a surprising announcement during its conference call on its fourth quarter and year-end business results, Churchill Downs Inc. officials said the company will discontinue its online sports betting and internet gaming operations.

The company will continue to operate its advance-deposit wagering platform, TwinSpires.com, which offers pari-mutuel wagering. CDI also will continue to offer retail, brick-and-mortar sportsbooks, which it noted remain profitable.

During a Feb. 24 conference call with analysts and investors, Churchill Downs Inc. CEO Bill Carstanjen said continued efforts in online sports betting and iGaming by the company didn't make economic sense as he sees little chance of growth or return for shareholders in the highly competitive market.

"This isn't the result we wanted when we started this business back in late 2018, but it is the prudent next step for our company," Carstanjen said.

CDI initially launched its sports betting under BetAmerica but moved the operations under its TwinSpires banner in January 2021. Now the company will cease online sports betting operations, which were active in Arizona, Colorado, Indiana, Michigan, New Jersey, Pennsylvania, and Tennessee.

"We have profitable retail sportsbooks in four of our casinos, however, the online sports betting and online casino space is highly competitive with an ever-increasing number of participants that the states have licensed. Many are pursuing maximum market share in every state with limited concern for short-term or even long-term profitability," said Carstanjen. "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."

Carstanjen emphasized that the changes do not apply to the company's successful TwinSpires ADW operation.

"We remain absolutely committed and excited about TwinSpires horse racing," Carstanjen said. "As its top line, bottom line, and margins continue to demonstrate that this is a special online business with a sustainable, scalable, and unique business model that delivers profitable growth today just as it has when we started this business well over a decade ago."

In other CDI news:

• Carstanjen said renovations at Churchill Downs racetrack are on schedule for each of the next three years.
• At Turfway Park, the racing grandstand and historical racing facility have faced some supply-chain issues on roofing materials that have set the project back to a projected Sept. 1 opening.
• In the $197 million sale of the Arlington International Racecourse property to the NFL's Chicago Bears, CDI anticipates the closing of that sale in the first half of 2023.
• On the recent agreement to purchase a number of Peninsula Pacific Entertainment gaming properties for $2.6 billion—a deal that includes Colonial Downs and a number of historical gaming facilities in Virginia—Carstanjen said the company is particularly excited about the opportunity to improve and expand historical racing games there.