DraftKings and Churchill Downs Incorporated announced a multi-year agreement on Tuesday that is expected to bring a parimutuel horse betting platform to DraftKings ahead of next May’s Kentucky Derby.
Under the agreement, Churchill Downs’ subsidiary, TwinSpires, will provide advance deposit wagering (ADW) technology to DraftKings, the companies said in a statement. The new platform, which DraftKings plans to name DK HORSE, will allow eligible DraftKings customers to bet on horse racing using a stand-alone app.
DraftKings, Churchill Downs Partner to Launch Horse Racing Betting Product https://t.co/Lz6rlACBca via @Yahoo
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“We are excited to collaborate with Churchill Downs Incorporated, not only to give our existing customers an opportunity to engage with pari-mutuel horse wagering, but also to acquire new customers efficiently during marquee horse racing moments,” DraftKings CEO Jason Robins said in a statement. “Due to the structure of the agreement, we expect this new product offering to be immediately profitable.”
DraftKings at the Derby
As part of the agreement, Churchill Downs Incorporated (CDI) will provide DraftKings with parimutuel wagering rights to horse racing content owned or controlled by CDI, including the Kentucky Oaks and Kentucky Derby. In addition, CDI will also secure, on behalf of DraftKings, additional horse racing content for use on DK HORSE, the companies said.
“We believe the depth and quality of our online offering through TwinSpires is unmatched in horse racing,” said Bill Carstanjen, who serves as CEO of Churchill Downs. “We are excited to establish this relationship with DraftKings and to deliver a full end-to-end white label ADW solution that will introduce their significant base of sports betting customers to horse racing wagering.”
At first, DraftKings will require customers to sign up and deposit funds to a stand-alone, horse racing-branded app that is separate from a customer’s sportsbook account. Eventually, DraftKings has plans to integrate DK HORSE into the company’s full product of suites through a common wallet. The integration will likely include DraftKings’ platforms on daily fantasy sports, online sports betting, and online casino.
Intersection between horse racing and sports betting
The announcement comes at a time when the horse racing industry continues to leverage sports betting as an engagement tool aimed at millennial customers.
In September, Churchill Downs entered into a multi-year partnership with FanDuel, the main rival of DraftKings. Under that deal, CDI awarded FanDuel wagering and sponsorship rights to the Kentucky Derby, the first jewel of the Triple Crown. The two companies will also collaborate on initiatives in several areas, including sports betting, broadcast rights, and advanced deposit wagering.
Separately, BetMGM reached a multi-year deal with the New York Racing Association (NYRA) in May 2021, ahead of the Belmont Stakes. That partnership represented BetMGM’s first involving horse racing. Another prominent sports betting operator, Caesars Sportsbook, sponsors several graded stakes at NYRA’s summer meet at Saratoga Race Course. Caesars also utilizes the NYRA Bets platform to offer parimutuel wagering in eight states, including Maryland, where Caesars launched its racebook on Tuesday.
Meanwhile, top ADWs like TwinSpires have felt pressure to align with major sportsbooks as fixed odds racing continues to proliferate nationwide. In February, TwinSpires announced plans to shutter its online sports betting and iGaming division, citing a hyper-competitive landscape in the sports betting space.
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Since its inception, DraftKings has dabbled in horse racing from a marketing perspective. When American Pharoah won the Triple Crown in 2015, he broke from a gate bearing DraftKings’ logo. And in the lead-up to the 2015 Belmont Stakes, DraftKings signed a deal to become a presenting sponsor of the race.
Johnny Avello, who serves as DraftKings’ director of race and sportsbook operations, is also reputed for his expertise in horse racing. In his previous role as sportsbook director at the Wynn Las Vegas, Avello ran one of the most comprehensive Kentucky Derby future pools in the industry.
DK HORSE is expected to be available initially in 21 states, pending all necessary licensing and regulatory approvals.
Photo: Michael Clevenger/Courier Journal
