TwinSpires Sportsbook and Casino will soon be no more.
The news appears to have been broken by Horse Racing Nation, via its Twitter account. In a tweet this morning, it claimed:
CDI CEO Bill Carstanjen says company is exiting online sports & casino wagering. ‘We will exit the [business to consumer] online wagering space. This isn’t the result we wanted, but it is the prudent next step. We remain excited about @Twinspires horse racing.’
TwinSpires began its short life in the online casino space as BetAmerica, but changed its name in January last year. It has been operating an integrated casino-sportsbook in New Jersey, Pennsylvania and Michigan. It also has a presence in Indiana, Colorado, Arizona and Tennessee, but has only been able to offer sports betting in those states as they have not legalized iGaming.
All those operations will be shut down.
TwinSpires’ parent company Churchill Downs Incorporated (CDI), owns numerous racetracks and casinos around the US. These include the eponymous Churchill Downs in Louisville, KY, which has been operating since 1875 and is home to the Kentucky Derby.
Difficulty making the online transition
Most US online casinos and mobile sports betting brands came by way of another part of the gambling universe. Companies like BetMGM, Caesars and Golden Nugget trace their origins to the retail casino sector, while the likes of DraftKings and FanDuel transitioned from the daily fantasy sports space.
It wasn’t unthinkable that a brand from the horse racing industry could have a go of it as well. However, it seems that neither Churchill Downs, nor BetAmerica, nor TwinSpires had enough brand power to make it in this extremely competitive new sector.
In January 2022, TwinSpires held just a 1.2% share of the Pennsylvania online casino market, and 1.1% in Michigan. Its sportsbook has fared only slightly better in Pennsylvania, and even worse than its casino Michigan.
The brand power of leading competitors like BetMGM and the high spending by the likes of DraftKings and Caesars make for a brutal market environment for bit players. It’s unfortunate, but perhaps not surprising in that context, to see TwinSpires throw in the towel so quickly.
Doubling down on retail activities
That said, CDI itself isn’t slowing down. It has simply decided that the online sector isn’t worth any further investments. The retail sector is another story entirely.
Earlier this week, the company announced that it will acquire all the assets of Peninsula Pacific Entertainment. The price tag on that deal is just shy of $2.5 billion. The assets in question include:
Colonial Downs racetrack in Virginia
Six historical horse racing facilities, also in Virginia, plus the rights to build more
Del Lago Resort & Casino in Waterloo, New York
Hard Rock Hotel & Casino in Sioux City, Iowa
The Iowa property in particular means CDI may still have a role to play in online gambling, just in the role of land-based partner. As it stands, Hard Rock Sioux City serves as the land-based partner for the online sportsbook of the same name. However, Iowa is also a dark horse candidate for online casino legislation, whether this year or in the near future.
It’s been a busy week for CDI overall, having made headlines three times this week. Aside from the Peninsula Pacific acquisition and the discontinuation of its online gambling products, it is also facing a class action lawsuit by bettors, following the belated disqualification of Medina Spirit, who had originally been declared the winner of the 2021 Kentucky Derby. The horse, which died of a heart attack in December, had tested positive for a banned steroid after the race.
An open slot in Michigan
One of the most significant impacts of this decision will be that it frees up room for a new brand to enter the Michigan online casino market.
Michigan is unique among states that have legalized online gambling in that it allows only one online brand per land-based casino operator. There are 15 eligible license-holders, which means a hard limit of 15 brands in the state. All of those partnerships had already been snapped up prior to the market opening on Jan 22, 2021.
All but one of those brands has launched. Michiganders are still waiting for Soaring Eagle Online Casino to make its debut. However, after that, the expectation was that there would be no more new online casinos coming to Michigan.
TwinSpires’ exit will change that assumption. It has a partnership in place with the Hannahville Indian Community, owners of Island Resort & Casino. That license should soon become available for a new partner.
The Michigan Gaming Control Board confirmed as much to Online Poker Report:
In Michigan, platform licenses can be acquired or change ownership, and operators may sign contracts with another platform.
OPR also reached out to the Hannahville Gaming Commission to see if any talks are already underway, but did not receive an immediate response.
Who might want to launch in Michigan?
While waiting for official word, we can still guess at who else might want to launch in Michigan. All the major US brands are there already. Even Caesars, which was left out of the mix initially, found its way in through its acquisition and rebranding of William Hill.
There are, however, many newer and smaller brands that might seize this opportunity. Here at OPR, we’d put our money on Bally Bet. As a new brand, it wasn’t able to participate in the original negotiations for Michigan market access, so this represents a golden opportunity. Earlier this month, it opened its first online casino in New Jersey. It’s hard to imagine that they wouldn’t at least try to negotiate a deal.
Another possibilities include the likes of Maxim Bet, Bet365 or Circa Sports. However, these brands are focused mostly on sports betting and might not be quite as excited about Michigan as an iGaming company, since there are many more markets available for sports to begin with.
There is also Unibet, but it already had a chance to find a partner in Michigan and didn’t take it the first time. It also hasn’t been battling very hard for market share in New Jersey or Pennsylvania, so it doesn’t appear as if the company has big ambitions for the US generally.