Churchill Downs, Inc. (CHDN) announced two deals on Tuesday with the intention of launching a New Jersey online sportsbook and casino in Q1 2019. CHDN established a partnership with Golden Nugget (Atlantic City), that provides the company with access to an operating license in the Garden State; necessary as New Jersey restricts licenses for online gambling sites to the state’s brick and mortar casinos and CHDN does not maintain a physical presence in the state. The Louisville based racing and gaming company also announced an agreement with SBTech, an online bookmaker and white label operator of sports betting and iGaming platform solutions. SBTech software, which includes a consumer facing site, mobile apps and back-end management systems will enable CHDN to offer and take bets within the state.
Howie Long-Short: While Churchill Downs (CHDN) owns TwinSpires, an online horse betting application, these announcements mark the company’s first foray into online casino gaming and sports betting (hence the need for the SBTech). In addition to New Jersey, CHDN intends on operating an online sportsbook and casino in Pennsylvania and an online sportsbook in Mississippi. The company acquired a land-based casino in PA and 2 more in MS, in anticipation of the SCOTUS decision back in March, so the company will not require a partner (with an operating license) in those states.
New Jersey gamblers are going to have a wide array of mobile apps to select from, as +/- 20 brands are expected to pursue a slice of the online sports betting pie. In addition to the Churchill Downs announcement, Hard Rock online casino and Ocean Resort casino (a Hyatt franchisee, H) have also announced intentions to offer online gaming within the state.
CHDN reported a rise in both net revenue +13% YoY (to $189.3 million) and adjusted EBITDA +36% YOY (to $49.2 million) in Q1 ’18. CEO Bill Carstanjen attributed the growth to strong performance from the company’s casino and TwinSpires businesses. Casino adjusted EBITDA increased $9 million YoY, while TwinSpires’ adjusted EBITDA increased +$3.3 million as the company increased its handle by 20.2%. CHDN shares are up 10% since Monday’s historic announcement, closing on Wednesday (5.16) at $306.40.
Fan Marino: On Saturday afternoon Justify (1/2) will aim for the 2nd leg of the Triple Crown in the 143rd Preakness Stakes (5p EST, NBC). Derby runner-up Good Magic (3/1) will run in the 8 horse field.
Set Your DVR: NBCSN is airing a new documentary entitled “Dark Horses” at 12a EST on Friday evening/Saturday morning. The film tells the story of the 1989 rivalry between Easy Goer and Sunday Silence. For those who aren’t horse racing historians, the 1989 Preakness Stakes (won by Sunday Silence over Easy Goer at the wire) is considered among the greatest horse races ever run on an American track. Here’s a video of the race, it’s a MUST WATCH for hardcore fans.
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