The decision by Churchill Downs Incorporated (CDI) to exit the US online casino and sports betting markets in order to focus exclusively on horse racing will have both short- and long-term impacts on the handful of states where its TwinSpires brand has its online casino and sportsbook.
The withdrawal of TwinSpires from both verticals could give other operators a chance to enter markets in Michigan and Pennsylvania. It could also portend that runaway spending by other operators to attract new customers may be causing smaller brands like TwinSpires to cut their losses and move on. In the case of CDI, the company will recommit to what it feels is its core business — horse racing.
Many [operators] are pursuing maximum market share in every state, with limited regard for short-term or potentially even long-term profitability.
During an earnings call last week to discuss Q4 and the full-year 2021, William Carstanjen, CEO of CDI, said that despite “high hopes” when it launched its online products in 2018, CDI will exit the online casino and sports betting markets by the end of August.
“The online sports betting and online casino space is highly competitive, with an ever-increasing number of participants that the states have licensed,” Carstanjen said. “Many are pursuing maximum market share in every state, with limited regard for short-term or potentially even long-term profitability. 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.
“This isn’t the result we wanted when we started this business back in late 2018, but it is the prudent next step forward for our company.”
Carstanjen said CDI will retain its retail sportsbooks in places where they have been profitable but did not say which locations that applies to. He added that CDI “will seek to monetize, where appropriate, our market access rights to other participants.
“We consistently receive interest from other industry parties with respect to market access in states where we conduct operations or have the rights to do so.”
But during the Q&A portion of the earnings call, Carstanjen said he was unable to elaborate further due to restrictions on such future-focused discussions.
“Certainly, there are probably some possibilities there,” the CEO said. “I want to acknowledge that it’s an interesting topic and it’s an interesting thing to talk about, but it’s not one that we can comfortably do so at this time.”
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Where TwinSpires Casino and Sportsbook Operate
TwinSpires Casino is currently deployed in three states, while TwinSpires Sportsbook is live in seven.
The three states in which TwinSpires Casino operates are Michigan, New Jersey, and Pennsylvania. All three states require online operators to partner with a land-based casino, but only New Jersey allows up to three skins on the same license.
In Michigan, TwinSpires is paired with the Island Resort & Casino, a tribal facility in Harris, MI owned and operated by the Hannahville Indian Community.
This isn’t the result we wanted … but it is the prudent next step forward for our company.
TwinSpires Casino MI has been among the smallest online casino and sportsbook operators in the Mitten State. The operator had $1.3 million in online casino revenue and accounted for just 1.1% of the market in January, the most recent month with figures available, according to data from the Michigan Gaming Control Board (MGCB).
MGCB data also show TwinSpires Sportsbook MI lost nearly $40k in January. One month earlier, it grossed $56k, representing 0.2% of the market at that time.
Meanwhile, in New Jersey, TwinSpires Casino operates on the Golden Nugget Atlantic City license. Although Golden Nugget is regularly among the top three in the online casino vertical in terms of revenue, Golden Nugget’s partners include FanDuel Casino NJ and SugarHouse Casino — two brands that have much higher numbers than TwinSpires.
TwinSpires Casino PA has a partnership with Presque Isle Downs and Casino. Data from the Pennsylvania Gaming Control Board (PGCB) show that in January, TwinSpires had $1.4 million in online casino revenue and made $510k with its online sportsbook. The operator held 1.4% and 1.1% of each market, respectively.
TwinSpires Sportsbook is also live in the three aforementioned states plus Arizona, Indiana, Mississippi, and Tennessee. In two additional states — Kentucky and Louisiana — TwinSpires is available for wagers on horse races only.
In Indiana, TwinSpires launched as BetAmerica in December 2019 but rebranded as TwinSpires in April 2021.
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TwinSpires is a Small Player in a Big Market
TwinSpires is a small operator in both casino and sports betting verticals in every state in which it is live.
In Michigan, only PointsBet ($827k) was a smaller operator in terms of online casino revenue. On the sports side, two sportsbooks in January made less than the $56k TwinSpires grossed one month earlier — Pala Interactive ($20k) and Parx Casino ($12k).
PointsBet is partnered with the Northern Waters Casino Resort while Pala operates sports betting for the Four Winds Casino group and Parx has a partnership with Gun Lake Casino.
PGCB data show that, in Pennsylvania, only the Pala-powered online casino for Wind Creek had less revenue and market share, at $1.1 million and 1%.
In Pennsylvania’s online sports betting vertical, Betfred Sports and Unibet — in partnership with Wind Creek Casino and Mohegan Sun Pocono, respectively — had less revenue than TwinSpires in January. Betfred grossed $24k and accounted for 0.1% of the market, while Unibet had $343k of revenue from online sports betting and had 0.7%.
Who Could Replace TwinSpires?
The departure of TwinSpires will provide new opportunities for other brands, especially in online sports betting.
Some brands that could take its place include:
- Bally Bet
- Betway
- DRF Bets
- Elite Sportsbook
- Fubo Sportsbook
- Sports Illustrated (SI) Sportsbook
- Stars Casino
Rush Street Interactive (RSI), the parent company of BetRivers, could potentially also expand the footprint of its SugarHouse brand for online casino and sports betting.
