It is that time of year where companies start reporting their first-quarter earnings. During these earnings calls, the top brass of these organizations talks at length about business plans and the direction the company is headed in.
Churchill Downs sees obvious opportunities in sports betting
While most forms of betting are illegal in the vast majority of states, there is an exception. That exception is horse racing. A major part of CDI’s business model involves mobile and online wagering on horse races using the TwinSpires product.
Needless to say, with a potential SCOTUS decision on sports betting imminent, the possibility of TwinSpires expanding beyond horses is very real. Moreover, CDI leadership believes the company is in a great position to capitalize on just that.
When asked about a federal change in sports betting law, Churchill Downs CEO Bill Carstanjen spoke about the company’s interest in the market:
“We have a lot of experience with different forms of wagering including online wagering through TwinSpires. And we think our company and our team is well-situated and experienced in ancillary products in order to transition into this one if it were made available to us in this country.”
Carstanjen also pointed out though that the company was limited to states where it currently owns and operates gaming facilities:
“We’re very interested in online wagering, we’re legal, we’re very interested in alternative products that are made available by different jurisdictions and an opening of PASPA and opening of sports wagering would be something that we would be very interested in and that we would look to pursue licenses. However, those licenses are made available presumably tied to brick and mortar facilities on a state-by-state basis. We would be interested in pursuing those, subject to the tax right and other regulatory restrictions on those.”
Churchill Downs and other online gambling opportunities
Like most other gaming companies presenting first-quarter earnings this week, CDI was focused on sports betting. This is understandable, given that a ruling from the Supreme Court could come down literally any day now.
However, there were allusions to the online casino industry. Carstanjen noted that an opportunity that comes with Presque Isle is an interactive gaming license in PA. He also noted that other states with similar opportunities are zones on the company’s radar when it comes to acquisitions and partnerships:
“We now have nine casino properties, five wholly-owned and four equity investments, in eight different states. This reflects our strategy of investing in modest sized casino properties with limited capital footprints and amenities and with stable, predictable cash flows in diverse markets. We also like states that we believe may ultimately grant access to online gaming and even potentially to sports betting to their brick and mortar casino license holders should either form of alternative gaming become legal in the relevant jurisdiction.”
In other words, Pennsylvania may just be the start of markets CDI tries to gain entry to in 2018. As the list of states considering online casinos and poker in addition to sports wagering grows, so will Churchill’s future plans. But, until the next earnings call, it appears Pennsylvania is both a priority and the frontier for CDI gaming expansion.