Churchill Downs Incorporated appears to be betting on the future of legalized online gambling and sports betting in a big way.
That’s one of the takeaways from the company’s Q1 earnings call on Thursday, as the company indicated it is seeking out markets that may legalize one or both.
When CDI bought a Pennsylvania racino earlier this year, we already knew that online gambling was part of the equation. The company cited the 2017 gambling expansion PA passed as one of the reasons why it acquired Presque Isle Downs & Casino at the time.
It reiterated that Presque Isle gives it foothold in Pennsylvania and the opportunity to get into online casinos.
Here is CEO Bill Carstanjen from the call:
We now have nine casino properties, five wholly-owned and four equity investments, in eight different states. This reflects our strategy of investing in modest-sized casino properties with limited capital footprints and amenities and with stable, predictable cash flows in diverse markets. We also like states that we believe may ultimately grant access to online gaming and even potentially to sports betting to their brick and mortar casino license holders should either form of alternative gaming become legal in the relevant jurisdiction.
That also seems to hint that CDI isn’t done on the M&A side of things, or might be should more states eye online gambling.
PA is the only place where CDI has a property that also has legal online gambling. But there are other possibilities on the portfolio:
A major gaming corporation is saying that it is purposefully seeking out opportunities to get into online gambling. If that’s not a signal that there is an opportunity and benefit for states to legalize it, I don’t what is.
CDI — nor any gaming company — is not eyeing online gambling as a novelty. They clearly see it as an opportunity to both improve its bottom line and its ability to market to current, new and lapsed customers.
More companies loudly announcing their intentions to participate in online gambling could help grease the wheels for legislation in states that are on the fence when it comes to legalizing it.