The horseracing brand Churchill Downs will shut down its online sports betting and iGaming business after it failed to produce favorable results. According to the company, its offerings will gradually be scaled down over the next six months.
Churchill Downs Gives Up on Online Betting
The decision comes in the wake of Churchill Downs’ Q4 revenue announcement. According to Bill Carstanjen, the company’s chief executive, there was too much competition in the online gambling market, killing Churchill Downs’ prospects for success.
The CEO explained that he had hoped to replicate the success of the company’s retail sportsbooks. However, the online gambling space turned out to be much more competitive than he had even expected. Carstanjen explained that there are always new players and it is arduous to compete with them all. He noted:
“Many are pursuing maximum market share in every state with little regard for short-term or potentially even long-term profitability.”
The CEO explained that this isn’t Churchill Downs’ philosophy and that the company prefers to focus on long-term value for shareholders. Because of this, the company will happily redeploy its capital somewhere else once it has seen its investment is not successful.
The Company Will Change Its Focus
Churchill Downs’ online business hasn’t been exactly flourishing, to begin with. It first launched a brand called BetAmerica, which didn’t find much success. In 2021, the company started business as TwinSpires, hoping that this time it will achieve the success it wanted. Yet, despite Churchill Downs’ best efforts, the company had a tough time.
According to a figure reveal from Pennsylvania’s betting market, Twin Spires received only 0.6% of the total sports betting handle. Churchill Downs noted that the Q4 EBITDA of the brand had declined by more than 2 million to $11.7 million. In the meantime, the company’s stocks have continued to fluctuate.
Investors as a whole have been losing trust in the overall sports betting market as it has continuously failed to meet expectations.
Churchill Downs’ plans are to now focus on its retail business and reinforce its shops across the United States. Carstanjen admitted that this isn’t the perfect outcome the company envisioned in 2018 but he remains committed to grow its horseracing offerings.
Despite the hurdles it faced in online sports betting, Churchill Downs’ retail business is still steady. At the beginning of February, the company announced that it means to relocate its Terre Haute Casino in Indiana to another site.