Posted on: October 10, 2023, 07:02h.
Last updated on: October 10, 2023, 07:02h.
Signaling optimism about the long-term trajectory of pari-mutuel wagering in the US, Churchill Downs (NASDAQ: CHDN) CEO Bill Carstanjen emphatically refuted rumors that the company’s TwinSpires unit is for sale.
Carstanjen made those remarks in a conversation with CNBC’s Contessa Brewer earlier today at the Global Gaming Expo (G2E) in Las Vegas. In a keynote address at the convention, the chief executive officer of the Kentucky-based gaming company noted TwinSpires, which has long been the subject of takeover rumors, isn’t on the auction block.
TwinSpires is a bit of a unicorn. It’s an online business that’s very profitable and continues to grow,” Carstanjen told the G2E audience.
Indeed, profitability in the online sports wagering space is a precious commodity and one that took operators focusing on sports betting several years to reach. Some still aren’t there. Consolidation rumors pertaining to TwinSpires date back to at least 2021.
Carstanjen Says Churchill Learned Sports Betting Lessons
TwinSpires’ horse racing business has been operational since 2007 and it was believed that early start and strength would be an advantage for TwinSpires in the online sports betting realm.
Things didn’t turn out that way as Carstanjen acknowledged to the G2E audience. He said that the company’s initial belief was that its horse racing wagering competencies would translate to sports betting, but Churchill later discovered that the evolution of regulated sports wagering in the US would favor a small number of operators that could deal with big losses in the industry’s early days.
“That just wasn’t the way our company was gonna go. The long haul you needed to sign up for just didn’t feel right to us,” he told the G2E audience.
Churchill Downs isn’t completely shut out of the sports wagering industry. With Kentucky recently joining the live and legal fray, online sportsbook operators seeking entry into that market are partnering with racetrack companies with Kentucky footprints. Fanatics, FanDuel and Penn Entertainment are the sportsbook operators partnering with Churchill-operated tracks in the commonwealth.
Carstanjen Bullish on US Economy
A recent survey of high-ranking US gaming industry executives by the American Gaming Association (AGA) indicates that cohort believes the economy could be heading toward a modest recession, perhaps as soon as this quarter.
Those fears are amplified by factors such as auto loan and credit card delinquencies residing at levels not seen since the global financial crisis and concerns that the Federal Reserve will prove unsuccessful in engineering a “soft landing.” Still, Churchill’s Carstanjen is constructive on the US economy.
“It’s still a strong economy. I’ve seen times that were much more concerning than now. We just have to keep our eyes on things,” he said at G2E. “Things are not quite what they were a year or so ago. There seems to have been some settling down, but things are pretty darn solid, pretty darn good.”