CDI Building on Relationships With FanDuel, DraftKings

With Churchill Downs Inc. building a relationship with two of the major sports betting platforms that also offer wagering on horse racing, FanDuel and DraftKings, it's a pretty safe bet that in terms of wagering this year's Kentucky Derby (G1) race and day will benefit from those relationships.

Through an agreement with CDI, both sports betting sites facilitated wagering on last year's Kentucky Derby day.

This column's position has been that racing should find a way to move toward fixed-odds wagering to take full advantage of the masses of potential new players now residing on sports betting platforms, but short of that, it's great to see both of these large sports betting platforms embrace racing. With both sites continuing to add players as more states allow sports betting, their percentage of handle for this year's Derby figures to increase.

At the top of the FanDuel app is a link to "FanDuel Racing," which offers ADW wagering on the races. The sportsbook even lists pari-mutuel odds on upcoming races. DraftKings has launched DK Racing, which serves up many of the rewards promos that sports bettors have become accustomed to receiving.

(It should be noted that other sportsbooks are embracing racing, with Caesars offering a link off its sportsbook to its race wagering app and Betfred going so far as to offer fixed-odds wagering to its Colorado customers. In a February conference call with analysts and investors, CDI CEO Bill Carstanjen said CDI plans to expand its business to other online sports wagering platforms in the future.)

In that February conference call, Carstanjen specifically talked about the opportunities with FanDuel and DraftKings in working with CDI.

"Our (business to business) strategy is focused on integrating pari-mutuel wagering on horse racing directly into the online sports wagering platforms through our suite of technology and operational capabilities," Carstanjen said. "Our deals with FanDuel and DraftKings are still in the early stages. This year's Kentucky Derby will be a nice test of our progress."

At this point CDI prefers the known quantity of pari-mutuel wagering as opposed to venturing into fixed-odds wagering.

"As I've said previously, we believe pari-mutuel wagering offers predictable and high margins to sports wagering platforms," Carstanjen said. "Our goal is to service their pari-mutuel demand as the sports platforms become more familiar with and focused on horse racing and higher, more predictable margins."

FanDuel and DraftKings platforms offered pari-mutuel wagers on last year's Derby and all involved benefited from the companies' marketing push ahead of the race. Beyond that, FanDuel TV was live, on-site at Churchill Downs to draw more attention to the races, and even some of its sports betting-oriented shows set up shop at the track.

For the sites, it's an opportunity to provide wagering on one of the biggest betting events of the year to their customers. For Churchill, it's welcomed new bettors (on the Derby and throughout the year). All-sources betting on the 2023 Kentucky Derby card reached a record $288.7 million, up 5% from the 2021 previous record of $273.8 million. Betting on the 2023 Derby race totaled a record $188.7 million, up 5%, compared to 2021's $179 million, which was the prior record.