Churchill Downs Incorporated (CDI) announced plans today to sell 49% of its company United Tote to the New York Racing Association (NYRA). The transaction should close by the end of the year. The release did not reveal the financial terms of the transaction.
The sale does not include the pari-mutuel settlements component of United Tote but does include all other verticals of the business. United Tote is a comprehensive system for racetracks and other pari-mutuel facilities.
Currently, NYRA and its three racetracks, Aqueduct Racetrack, Belmont Park in Elmont, and Saratoga Race Course, do not utilize United Tote. However, under a separate agreement, the three major New York tracks will begin using United Tote in 2023.
Meanwhile, here is what the release says about the partnership:
“CDI and NYRA intend to work together to create and provide a comprehensive and efficient industry-leading pari-mutuel solution through United Tote that will expedite the expansion of horse racing seamlessly onto sports wagering platforms to reach new customers.”
Churchill Downs transformation plan underway
Earlier this month, CDI outlined its five-point transformation plan to shift focus away from trying to make waves as a sports betting operator and focus purely on the horse racing business. That conversation focused largely on TwinSpires, the company’s ADW betting app. The transition did address plans to create horse betting content to market to sportsbooks though.
Fixed-odds racing continue to be a hot topic in the betting industry. Many perceive it as the next great opportunity to expand the industry, as it would allow horse betting to be fully integrated into online sports betting platforms. Based on the release, this move appears to be leveraging the NYRA’s connections to the betting industry to help deliver on developing that content.
“Given our expertise and extensive knowledge of pari-mutuel wagering on horse racing, we have the technical expertise, access to racing content, and technology to seamlessly integrate pari-mutuel wagering into existing third-party online sports wagering platforms,” CEO Bill Carstanjen said at the time.
These moves come not long after the company announced in Q1 that it would be exiting the sports betting industry altogether. The company has shuttered its sportsbook division, which attempted to rebrand TwinSpires Sportsbook to BetAmerica before ultimately deciding to wash its hands of the entire endeavor.
What remains to be seen is how divesting a large portion of its successful platform plays a role in this transformation. It appears to be related to developing a viable fixed-odds offering, but with limited information available at the moment, that remains to be seen.