TwinSpires Online Gambling Shutting Down
TwinSpires, the online sportsbook and casino from Churchill Downs Inc.(CDI) will be withdrawing its online operations from every state where it is available. Its online horse racing betting will continue. This means that you won’t be able to access its online sportsbook and casino within the next six months. CDI CEO Bill Carstanjen announced this move during a company quarterly earnings call.
CDI owns the famous Churchill Downs Racetrack, where the Kentucky Derby is held every year. Not just this racetrack, where its online sportsbook and casino gets its name, but numerous race tracks across the country. The fact that this giant company has withdrawn from the growing online sports betting and online casino sectors is a significant shift in the industry.
Our experts have taken a detailed look into this news to see what it means for bettors across the US. We’ve analyzed the CDI’s reasons for this withdrawal, what it means for the rest of the industry, and the potential for other brands to take its place.
Why is TwinSpires Withdrawing its Gambling Products?
Companies are all looking for the same thing when it comes down to it: money. It’s not like CDI as a whole is losing money. Recently, the company acquired the assets of Peninsula Pacific Entertainment for $2.5 billion. The problem for CDI is that its online casino and sportsbook are returning a loss.
Individual data is available for sportsbook handles and revenue in Arizona, Pennsylvania, Michigan, and Indiana. Here we can see the problem for TwinSpires. In MI, it has brought in -$1.1 million in adjusted gross revenue from a handle of $22 million. Its gross revenue is $5.9 million in all these states, but -$1.6 million adjusted gross revenue. Adjusted gross revenue accounts for funds from promotional play, which is why this number is different from its gross revenue figures.
Online gambling sites offer generous welcome bonus promotions to customers as a way to try and tempt them to register. Of course, this has caused a spiral of rewards as sportsbooks try to outdo one another. You can claim thousands of dollars in bonus funds when registering with a sportsbook or online casino. While this is great for customers, it’s not been sustainable for TwinSpires.
It’s estimated that TwinSpires online casino has a market share of 1.1% in Michigan and similar numbers in the other states. Its sportsbook has even less of a share. TwinSpires has been unable to compete with giants like DraftKings and FanDuel. Not bringing in a bigger market share means it hasn’t been able to offset its promotional losses. Overall, the reason TwinSpires is shutting down most of its online gambling is simply that it’s not earning enough money.
The Rest of the Industry
TwinSpires is not the only online casino and sports betting site looking to take such drastic measures, as WynnBET is reportedly considering selling its online skins to a larger wagering company. It’s not just companies looking to sell up, but it seems like there is a general shift towards moderation.
Caesars has announced it is cutting back on its expensive advertising campaign, and DraftKings stocks have been dropping with fears that the company is not sustainable. Experts suggest that the amounts spent on player acquisition by the biggest providers like BetMGM and Caesars will make competing difficult for smaller brands.
CDI is unique because sports betting is not primarily its business, but smaller brands could struggle in the future. Considering that mega-companies like Disney are considering the online gambling field, these companies could be bought out for easy market access.
Opportunity in Michigan
TwinSpires may have had a presence in quite a few states, but it is in Michigan where this news has been greeted with the biggest reaction. That’s because Michigan has a hard limit of 15 online casino brands, each having to be partnered with a land-based casino. TwinSpires withdrawal will open up one of these spaces. While that may be sad for fans of its betting and gambling products, it means a new brand can take its place.
Most of the biggest brands in the US already have brands in MI, so one of the smaller online casinos could take this place. Among the contenders are Bally Bet, Bet365, and Unibet. Bet365 is primarily a sports betting company, and Unibet hasn’t been very aggressive in its strategy to grow in the US. Bally Bet looks like the strongest contender to take this spot.
TwinSpires moving out of the industry marks an obvious shift for online gambling. This could be very significant for companies, but players can enjoy online gambling just the same. If you’re of legal gambling age, you just need to be within the borders of a state where the kind of gambling you want to enjoy is legal. With an internet connection, you can access all the sports wagering markets and casino games you want.