In talks on casinos and sportsbooks, there will be no more mention of TwinSpires Sportsbook & Casino, this is according to a Twitter account statement that was recently made by Horse Racing Nation. The tweet went on to state that the news had been confirmed by Churchill Downs Incorporated (CDI) CEO, Bill Carstanjen. Carstanjen is claimed to have said that the betting brand was exiting the B2C online casino space due to an unexpected twist in the company’s operations.
While the decision to end betting operations for the company has been occasioned by some unwanted forces, it remains the best thing to do. The company is however keen to announce that it will still carry on with horse sports through Twinspires horse racing.
The history of TwinSpires
Before TwinSpires because an indomitable industry force, the company was known as BetAmerica. The name-change took place at the beginning of January 2021, giving the operator a new lease of life. For the players of TwinSpires from Michigan, Pennsylvania and New Jersey, the integrated casino-sportsbook product has been unwavering in value and quality. The operator also had a business presence in Tennessee, Arizona and Colorado where their main offering had been sports betting – iGaming is not yet legal these areas.
The parent company that runs the operations of TwinSpires, Churchill Downs Incorporated (CDI) has multiple racetracks and casino establishments around the United States. Some of the popular ones include the eponymous Churchill Downs in Louisville, KY, that has been in business since 1875 and is popular as the home of the Kentucky Derby.
Challenges with online betting
A lot of the established betting brands in America have origins from other foreign markets which have a vibrant casino and mobile sports betting landscape. Casino brands such as Golden Nugget, Caesars and BetMGM can retrace their early days to the retail casino sector. There are others like Fanduel and DraftKings that developed out of their success in the daily fantasy sports space.
When the management of TwinSpires wanted to transition from horse racing to casino business, the move was not all unthinkable. The only limitation and which no one thought about at the time was that none of the entities, TwinSpires, BetAmerica, nor Churchill Downshad enough brand muscle to shove the competition around to favor the new entrant.
At the start of 2022, financial and performance reports indicated that TwinSpires controlled a mere 1.2% share of the gambling market in Pennsylvania and 1.1% of the Michigan market. The sportsbook operations of the company reveal that there was a slight advantage in Pennsylvania but the Michigan market was a sorry state.
With rival brands such as BetMGM leading in market share, TwinSpires needed to have something to beat them with but they did not. When it came to advertisement campaigns, the likes of Caesars and DraftKings controlled every bit of media, leaving the small players gasping for air to simply stay afloat. While the market was evidently brutal, TwinSpires held on for months in the hope that business was going to take an encouraging turn – to have the operator finally decide to throw in the towel is in no way surprising in this context.
Cutting down on retail costs
Even though TwinSpires has shelved the idea of running a successful venture in the casino and sports betting category, CDI does not appear to be slowing down. The company appears to have taken a decision to exit the online sector because no related investments now exist. All the company’s attention has now been directed to the retail sector. Earlier in the week, TwinSpires made an announcement revealing to its customers and other stakeholders that it is in the process of acquiring every one of the assets that belonged to Peninsula Pacific Entertainment.
When providing details of the agreement, it was discovered that the cost of the deal was a little below $2.5 billion. Among the assets that will be exchanging hands is
- Hard Rock Hotel & Casino in Sioux City, Iowa
- Del Lago Resort & Casino in Waterloo, New York
- Six historical horse racing facilities, in Virginia, plus rights to construct more
- Colonial Downs racetrack, also in Virginia
The property in Iowa is an indication that CDI could still be able to play a certain role as far as online gambling is concerned, albeit in the capacity of a land-based partner. At the moment, the Hard Rock Sioux City premise plays the role of land-based partner of the online sportsbook with the same name. On the flipside, Iowa takes on the identity of a dark horse candidate for laws related to online casinos in the current year or even in the future.
The past week has been action-packed as CDI was involved in activities that caused it to appear in the headlines on three occasions. Apart from the recently announced Peninsula Pacific acquisition as well as stoppage of the company’s online gambling products.
There is also the involvement of the CDI in a class action lawsuit by gamblers in reaction to the delayed disqualification of Medina Spirit. Medina Spirit, a horse which succumbed to a heart attack after the race, had been declared winner of the Kentucky Derby of 2021. The horse had tested positive for a steroid that is banned from sale in the United States.
When CDI entered the online sports betting world, the market penetration was through the BetAmerica platform. The name was changed to “TwinSpires Sports” in 2021. At the time of purchasing BetAmerica in 2017, CDI only provided for an initial deposit which was to act as an advance for the acquisition of a betting platform dedicated to horse racing. By the time the betting provider decided to let go of the venture, the management was unable to view a profitable future for the business. Pulling out early of a failing market saves investors from suffering losses over an extended period of time in the hope that the situation will get better.