Fri May 2, 2014
Churchill Downs Inc. Sees Growth in Online Betting (But Drop at Simulcast Windows)
There are a couple of reasons Churchill Downs' total betting handle was 16-percent lower in the first three months of 2014 than the same period of 2013.
The winter weather was particularly awful.
Or fans preferred to bet from the comfort of their homes.
Churchill Downs Inc., the racetrack's parent, also operates TwinSpires.com, an online betting service. The total handle decrease above—and a 10-percent decrease in net pari-mutuel revenues—were part of an annual filing to the Securities and Exchange Commission.
So was this number: a 9-percent increase in total handle through the company's online business, plus a 6-percent increase in net pari-mutuel revenues.
The Churchill Downs racetrack's spring meet started a week ago; the first-quarter numbers represent no live racing. Instead, the handle would have come from simulcast betting—that is, wagering at Churchill Downs on races televised from other racetracks.
Simulcast betting has been a source of revenue for some 20 years, said Jim Mulvihill, a spokesman for the National Thoroughbred Racing Association.
Yet online racing brings a great deal of potential for the thoroughbred industry, he added.
“In a lot of ways, it is the future of racing," Mulvihill said. "This is not a threat to racing. The smartest racetrack operators are embracing online gaming and they want to be a part of it because, whether you’re talking about horseracing or football or really any business, you’ve got to be online now if you want to be in the 21st Century.”
Now, the two aren't mutually exclusive, Mulvihill said. Even for simulcast, some people will always prefer to bet on horses in person for the experience of being at a track or for the social elements.
But online betting can bring wagering to more people.
“The more access we give people to the game, and the ability to bet where they want to watch the races, where it’s most comfortable to watch the races—whether that’s at home on their couch or on their mobile device—that’s only a good thing," Mulvihill said.
Last year’s Kentucky Derby had $130.5 million in all-source wagering, the second-highest in the race’s history.
A Churchill Downs spokesman declined to comment about the SEC filing.