On September 8, 2022, Churchill Downs, Inc. and FanDuel Group announced a multi-year partnership that “includes Wagering Rights to Horse Racing Content, Totalizator Services, Certain Television and Media Rights and a Kentucky Derby Sponsorship.”  While most people with a connection to horse racing know that Churchill Downs owns casinos and racetracks, they may not be as familiar with FanDuel.  The Churchill Downs’ media release describes the company:

“FanDuel Group is an innovative sports-tech entertainment company that is changing the way consumers engage with their favorite sports, teams, and leagues.  The premier gaming destination in the United States, FanDuel Group consists of a portfolio of leading brands across gaming, sports betting, daily fantasy sports, advance-deposit wagering, and TV/media.  FanDuel Group has a presence across all 50 states with approximately 17 million customers and nearly 30 retail locations.  The company is based in New York with offices in California, New Jersey, Florida, Oregon, Georgia, Portugal, Romania and Scotland. It’s network FanDuel TV and FanDuel+ are broadly distributed on linear cable television and through its relationships with leading direct-to-consumer OTT platforms [on-demand streaming]. FanDuel Group is a subsidiary of Flutter Entertainment plc, the world’s largest sports betting and gaming operator with a portfolio of globally recognized brands and a constituent of the FTSE 100 index of the London Stock Exchange.”

Following are verbatim excerpts from the rest of the Churchill Downs media release followed by my comments about the partnership.

“Under the Agreement, CDI will provide certain technology and services to enable FanDuel’s customers to place pari-mutuel wagers on horse racing via FanDuel’s sports wagering and ADW platforms.  CDI will also authorize wagering on CDI’s owned or controlled horse racing content via FanDuel’s platforms in the United States and grant FanDuel certain television and media rights to broadcast CDI-owned racing content on FanDuel’s television network(s).  In addition, the Agreement provides FanDuel non-exclusive Kentucky Derby sponsorship rights within the sports wagering category.

Beginning in January 2023, FanDuel will pay for CDI technology and services provided by United Tote Company (‘United Tote’) to facilitate pari-mutuel wagering on FanDuel’s platforms in the United States, including FanDuel Sportsbook and TVG.  As previously announced, CDI has entered into an agreement to sell 49% of United Tote to New York Racing Association, Inc. in a transaction that is expected to close by the end of 2022.

CDI will provide FanDuel wagering rights to horse racing content owned or controlled by CDI, including the Kentucky Derby, and will receive customary content fees when FanDuel accepts wagers on CDI-owned content. FanDuel will also receive exclusive television rights to the racing content of all CDI thoroughbred racetracks, including Churchill Downs Racetrack, once its existing non-Derby media rights deal expires in 2023.  The Agreement excludes certain specified racing content, including Kentucky Derby Week.

As part of the Agreement, FanDuel will also receive a non-exclusive sponsorship of the Kentucky Derby in the sports wagering category beginning in 2023 in exchange for an annual sponsorship fee.”

The media release did not report on the specific financial terms of the agreement, so that part of the agreement can’t be evaluated here.  Conceptually, however, the partnership is very promising, mainly for the rationale espoused by Amy Howe, CEO of FanDuel: “With the launch of FanDuel TV last week and the upcoming integration of premier racing content into our market-leading sports book, we believe this is an inflection point in our ability to offer our customers a seamless wagering experience with a single wallet.  …we will have exclusive broadcast rights to the Churchill Downs Incorporated family of tracks on FanDuel TV.  We look forward to creating new audiences for horse racing (emphasis added).”

FanDuel’s sports-betting customer base represents a remarkable opportunity for introducing pari-mutuel wagering on horse racing to a large and growing audience of confirmed bettors. A negative is that FanDuel’s exclusive broadcast rights to racing at CDI racetracks will exclude CDI racing from Fox Sports cable.

Horse Racing Business September 13, 2022