Churchill Downs outlines B2B content-led pivot for horseracing betting business
TwinSpires operator waxes lyrical on potential of new business but rubbishes talk of white-label business model
Churchill Downs CEO William C. Carstanjen has affirmed the operator’s commitment to keep its TwinSpires online sportsbook alive but change its operational model from B2C to a B2B offering.
The firm, which predominantly operates in the retail sphere, first confirmed the intended closure of the TwinSpires online sportsbook and casino business in February during its Q4 2021 earnings call amid rising losses with the online sportsbook brand.
Churchill Downs is set to report a $5m loss from the TwinSpires business by the end of its 2022 financial year.
Despite the plans to close down the online sportsbook and casino business, Carstanjen suggested there was still ongoing potential and profits for the TwinSpires horseracing business, and that the firm was “very focused” on unlocking that potential.
One element of this was through employing a B2B-style model in which TwinSpires would outsource its data and content to other parties.
“It’s a sophisticated data intense offering that strongly appeals to committed horse players,” Carstanjen said.
“We believe fundamentally that horseracing content should and will become available over time on sports wagering platforms to reach every wagering customer across the US.
“We intend to be a leading distributor of horseracing content, either directly to convert to customers of TwinSpires or under a B2B model that enables the online distribution of horseracing content to millions of new customers who have opened online sports wagering accounts,” he added.
It is understood the B2B content pivot would run in tandem with TwinSpires’ existing horseracing betting business, with content being provided to other operators.
Carstanjen continued: “Given our expertise and extensive knowledge of pari-mutuel wagering on horseracing, we have the technical expertise, access to racing content, and technology to seamlessly integrate pari-mutuel wagering into existing third-party online sports wagering platforms.
“We will also provide user interfaces and ancillary services that may be necessary or desired by online sports wagering platforms.
“The strategy will also enable us to offer sports wagering sponsorships for the Kentucky Derby and to generate incremental content fees for Churchill Downs Racetrack as well as our other racetracks,” he added.
In order to ready the groundwork for the pivot, Churchill Downs has developed a strategy aimed at addressing process, content, and technology issues in order to deliver a seamless product to B2B partners.
However, Carstanjen refuted any suggestion that TwinSpires would effectively become a white-label-style business in the future.
“Every online sports operator has a different set of needs, some will need more services than others, some know nothing about horseracing while some will know quite a bit about horseracing,” he explained.
“We have a suite of services that we can provide for people, not just technology, but content, etc. We’ll let potential partners dictate what they need, how we can help them and how we can partner with them.
“Ultimately, the idea here is not a white-label standalone advanced deposit wagering (ADW), the idea here is integrating horseracing into their larger sports TAM that is offering a range of different sports,” Carstanjen added.
Analysts pressed the Churchill Downs CEO on whether the launch of the content-led business would lead to the cannibalization of the wider TwinSpires horseracing offering, suggestions which Carstanjen claimed were on Churchill’s radar.
“In terms of cannibalization, there can be some of that, especially with the lower end customer base, but that isn’t something we find particularly troubling right now because TwinSpires really is, ultimately, driven by committed players,” he explained.
“Those are the ones that are most interested in the suite of sophisticated tools and content and video that’s available.”
Carstanjen continued: “It’s a very extensive complicated product with lots of different ways of customizing and for the core players, who like to devote a significant amount of time, we think TwinSpires will stand alone as a really attractive option compared to the slimmed down simplified newbie interfaces.
“We’re likely to see more of them on the online sports wagering platform but, certainly for newer customers who aren’t as familiar, there can be some cannibalization there, but that cohort is not what drives the performance of TwinSpires,” he concluded.