In what many considered a surprising move, Churchill Downs, Inc., has decided to remove online and mobile sports betting options from their portfolio. The company, which is based in Kentucky and synonymous with the Kentucky Derby that takes place at the Churchill Downs racetrack, believes it no longer makes sense for their customers to use such services offered by them. But are they correct? And will this decision have any impact on legal sports betting in the larger state of Kentucky? Let's take a look.
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As legal online sports betting in the United States continues to become increasingly popular, Churchill Downs, Inc., is taking a step in the complete opposite direction. On a conference call with investors in late February, CEO Bill Carstanjen announced Churchill Downs Incorporated (CDI), which is best known for its racetrack namesake in Kentucky, would be removing online sports betting options from their portfolio of services.
This comes as a great shock to many given the current sports-gambling climate throughout the United States. It also has even more people wondering whether this will impact the status of sports betting in Kentucky, including for the 2022 Kentucky Derby, which will take place on May 7 at the Churchill Downs racetrack in Louisville, Kentucky.
Indeed, there is a lot to digest and analyze here. Rest assured, though, we have all the answers you're looking for.
Why is Churchill Downs Getting Rid of Online Sports Betting?
When CDI opened its online sports betting operation, it had hoped to expand the reach it had to gain customers. They already offered the ability to place bets on horse racing, via their TwinSpires online sportsbook, which focuses exclusively on parimutuel betting. They also have retail sportsbooks installed at their physical casino locations. Their online website was supposed to be an extension of everything.
Unfortunately, CDI's online sportsbook, which was initially under BetAmerica before being folded under the TwinSpires umbrella, never actually took off. Carstanjen has cited the superfluous amount of competition in the sports-betting space as the primary reason.
"We have profitable retail sportsbooks in four of our casinos, however, the online sports betting and online casino space is highly competitive with an ever-increasing number of participants that the states have licensed," he said, according to BloodHorse.com. "Many are pursuing maximum market share in every state with limited concern for short-term or even long-term profitability. Because we do not see—for us—a path in which this business model delivers predictable and acceptable margins for at least several years—if ever—we have decided to exit the B2C online sports betting and iGaming space over the next six months."
Bigger companies like DraftKings, FanDuel, and Caesars, specifically, have proved to be tough for CDI to overcome. The genesis of their operation hails from Kentucky while their main competitors have more established and far-reaching licenses and are thus better suited to navigate initially low to nonexistent revenue streams.
As it closes down, in fact, CDI's sportsbook can only be accessed by residents in Arizona, Colorado, Indiana, Michigan, New Jersey, Pennsylvania, and Tennessee. Without a foothold on larger markets like New York and Las Vegas, CDI's reach was always going to be more limited than that of their primary rivals.
What Does Churchill Downs' Closing of Online Betting Say About the Future of Sports Gambling in Kentucky?
On the surface, CDI isn't nodding toward anything directly related to sports betting in Kentucky by shuddering their online bookies. Though legislation has been proposed to green light sports gambling, it is not currently legal throughout the state—aside from horse racing. CDI's online sportsbooks weren't even accessible to those in Kentucky, so this decision doesn't technically change the status quo.
If anything, this will redouble CDI's focus on the Churchill Downs experience. They have plans to thoroughly renovate the racetrack in the coming years. And yet, if you read between the lines, you can also sense something about the future of sports betting in Kentucky.
For anyone impacted by CDI's shutting down, it's online operations, though, you needn't worry about finding a new home for your business. Our reviews of the best online sportsbooks can help you spot the best fit for all of your gambling needs.
Will Kentucky Legalize Sports Betting in 2022?
Ask yourself this: Why would a gambling operator so prominently embedded in the Kentucky horse racing scene close down their entire online sportsbooks operation if gambling was on the verge of being legalized throughout the state? If we're being honest, they wouldn't.
CDI can talk about how they no longer want to compete with the larger conglomerates, but the fact of the matter is, they would be at the top of the list to receive sportsbook licenses if and when Kentucky ever makes the decision to legalize sports betting. There is no way they remove their online presence if that were a distinct possibility in the near future.
People will point toward the pro-betting legislation that was originally passed through Kentucky and earned some support from the Democratic side of the local government. But that bill was introduced in 2020. It has yet to get the traction necessary, roughly two years later, to overturn the state's stance against sports betting.
As things presently stand, it also doesn't appear that legalizing online betting is a priority for Kentucky. More than half of the United States disagrees, but the faces of the conservative party continue to take a hard-line stance against it—even though the sports betting bill in question has plenty of bipartisan support.
Kentucky should join the ranks of those that legalize sports betting in time. Emphasis on "in time." Legal sports betting infrastructures take a while to set up after they're approved, and Kentucky isn't even at that point yet. And given Churchill Downs' decision to close up their online-betting shops in other states, it stands to reason Kentucky won't roll out sports betting before the end of 2022, if at all.
Take a look at this list of the top online sportsbooks so you can find which one to use for all of your remote sports betting moving forward: