Gaming company and horse racing giant Churchill Downs Inc. might be exiting the online casino and sports betting businesses. However, it’s making headway with its business-to-business horse racing product push.
On Thursday, the company penned a multi-year deal with FanDuel. The agreement includes the ability to place pari-mutuel horse racing betting on the FanDuel sportsbook and FanDuel horse racing app.
During its earnings call last month, CDI announced its new proposal for selling its horse racing technology to sportsbooks. The announcement came months after CDI expressed its intent to leave sports betting across the US earlier this year.
FanDuel, which has positioned itself as the leading US sportsbook in the country, will receive certain rights to Churchill Downs racing content. Payments for the technology and services are expected to start in January.
Detailing the FanDuel-CDI deal
FanDuel already owns TVG, a horse betting app available in several states, including Kentucky. Therefore, CDI and TVG are competitors in the advance deposit horse racing betting space.
But that rivalry may cool off once FanDuel offers horse racing wagers in the sportsbook app through their partnership.
CDI subsidiary, United Tote Co., will be responsible for providing services to the sports betting giant. Last month, the New York Racing Association purchased 49% of United Tote Co.
Additionally, FanDuel will have access to CDI racing content for its TV networks. Previously, those networks were branded as TVG.
The financial terms of the deal were not made public.
Execs on both sides are excited about the new partnership
FanDuel CEO Amy Howe lauded the agreement, highlighting the potential to integrate the business’s product offering further.
“With the launch of FanDuel TV last week and the upcoming integration of premier racing content into our market-leading sports book, we believe this is an inflection point in our ability to offer our customers a seamless wagering experience with a single wallet,” she said.
Howe also added:
“We are especially pleased that we will be able to offer wagering on the most exciting two minutes in sports, the Kentucky Derby, and that we will have exclusive broadcast rights to the Churchill Downs Incorporated family of tracks on FanDuel TV. We look forward to creating new audiences for horse racing.”
Equally excited about the deal was CDI CEO Bill Carstanjen, who said:
“We look forward to working with FanDuel to deliver premium horse racing content to their expansive base of sports wagering customers.”
FanDuel becomes Kentucky Derby sponsor
As part of the agreement, FanDuel Sportsbook will also receive a non-exclusive sponsorship of the Kentucky Derby in the sports wagering category starting in 2023.
In exchange, CDI receives an undisclosed annual sponsorship fee.
In May 2022, during the 148th running of the derby, bettors wagered a record $179 million.
CDI is a titan of the horse racing industry
Opened in 1875, Churchill Downs Racetrack in Louisville is most famous for hosting the Kentucky Derby.
Moreover, the company owns and operates the TwinSpires online horse racing betting platform. It also owns eight gaming establishments in the Bluegrass State.
These facilities are called casinos but don’t feature traditional casino gaming. Instead, they offer machines that resemble slot machines, but the results are based on past horse races.
Carstanjen allayed concerns that the deal with FanDuel will eat into TwinSpires’ business. In the August earning call, he said that TwinSpires depended on “committed players” and that the sportsbook cohort did not drive its success and performance.
But now that TwinSpires is stepping away from sports betting, more licenses will be freed up in the states. Recently, CDI shut down TwinSpires in Michigan sports betting, with SI Sportsbook ready to take its place.