TwinSpires revenue climbs as CDI plans for sportsbook integration
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Despite the delay of the 2020 Kentucky Derby and the other Triple Crown races, usually huge revenue generators for TwinSpires, revenue for the advanced-deposit wagering platform rose significantly in the second quarter, Churchill Downs Inc. representatives revealed on a Thursday earnings call.
CEO Bill Carstanjen said on the call that CDI plans to expand the online betting service to include sports gambling in more states where it becomes legal, through integration with its BetAmerica sportsbook.
“Unlike other businesses within the sports betting space today with significant market valuations based on multiples of future revenue, TwinSpires has already proven that it has a successful and growing online wagering platform with substantial revenues and profitability,” Carstanjen said.
In its second-quarter earnings report, CDI's online wagering section shows a net revenue of $121.6 million, up from $96 million in the second quarter of 2019. The release shows that while active players on the platform decreased by 55.5%, in part because of the rescheduling of the Kentucky Derby, net revenue per active player went up 191.9%.
The handle for TwinSpires also grew despite the pandemic, according to Marcia Dall, CDI’s executive vice president and CFO. Dall said that even with the loss of the Kentucky Derby, the total TwinSpires handle grew 22 percent or more than $100 million.
“Excluding the 2019 Derby week handle from Churchill Downs' Racetrack content, TwinSpires grew handle 43% compared to the prior year quarter,” Dall said. “We also experienced an increase in the amount wagered and an increase in the average number of wagering days by our existing customers in the quarter compared to the prior year that we believe reflects the lack of alternative sports betting options.”
In the question-and-answer portion of the call, CDI President and COO Bill Mudd was asked whether he believes that the growth of the platform will be sustainable as other sports begin to return, giving customers other options in the sports wagering space. Mudd said that would be determined by two things: whether customers have shifted to gambling online, which he believed is the case, and whether volumes will stay at their current level.
“I think that’s a good question that I don’t completely know the answer to,” Mudd said. “I think it will. I think the lack of other sports have shifted people to playing more horse racing and certainly playing online horse racing since they’re working from home and have more time to do that sort of thing.”
Even if other sports do draw players away from horse racing, CDI hopes to keep those players on its platform as it attempts to expand its sports-wagering operations. Its BetAmerica sportsbook is planned to launch in Colorado and Michigan before the end of the year, with other states possible for 2021. It currently offers online sports betting in Indiana, New Jersey and Pennsylvania.
“We remain focused on and disciplined in building a profitable sports betting and iGaming business that will be integrated with our horse race wagering platform over the long term,” Carstanjen said. “We will leverage our team’s experience in building the most profitable online horse racing wagering platform in the industry with their extensive sports betting and iGaming knowledge.”
CEO Bill Carstanjen said on the call that CDI plans to expand the online betting service to include sports gambling in more states where it becomes legal, through integration with its BetAmerica sportsbook.
“Unlike other businesses within the sports betting space today with significant market valuations based on multiples of future revenue, TwinSpires has already proven that it has a successful and growing online wagering platform with substantial revenues and profitability,” Carstanjen said.
In its second-quarter earnings report, CDI's online wagering section shows a net revenue of $121.6 million, up from $96 million in the second quarter of 2019. The release shows that while active players on the platform decreased by 55.5%, in part because of the rescheduling of the Kentucky Derby, net revenue per active player went up 191.9%.
The handle for TwinSpires also grew despite the pandemic, according to Marcia Dall, CDI’s executive vice president and CFO. Dall said that even with the loss of the Kentucky Derby, the total TwinSpires handle grew 22 percent or more than $100 million.
“Excluding the 2019 Derby week handle from Churchill Downs' Racetrack content, TwinSpires grew handle 43% compared to the prior year quarter,” Dall said. “We also experienced an increase in the amount wagered and an increase in the average number of wagering days by our existing customers in the quarter compared to the prior year that we believe reflects the lack of alternative sports betting options.”
In the question-and-answer portion of the call, CDI President and COO Bill Mudd was asked whether he believes that the growth of the platform will be sustainable as other sports begin to return, giving customers other options in the sports wagering space. Mudd said that would be determined by two things: whether customers have shifted to gambling online, which he believed is the case, and whether volumes will stay at their current level.
“I think that’s a good question that I don’t completely know the answer to,” Mudd said. “I think it will. I think the lack of other sports have shifted people to playing more horse racing and certainly playing online horse racing since they’re working from home and have more time to do that sort of thing.”
Even if other sports do draw players away from horse racing, CDI hopes to keep those players on its platform as it attempts to expand its sports-wagering operations. Its BetAmerica sportsbook is planned to launch in Colorado and Michigan before the end of the year, with other states possible for 2021. It currently offers online sports betting in Indiana, New Jersey and Pennsylvania.
“We remain focused on and disciplined in building a profitable sports betting and iGaming business that will be integrated with our horse race wagering platform over the long term,” Carstanjen said. “We will leverage our team’s experience in building the most profitable online horse racing wagering platform in the industry with their extensive sports betting and iGaming knowledge.”
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