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Churchill Downs, Inc. announced in July that it had listed seven of its existing casinos for sale, leading to an immediate drop in the organization’s stock price. CDI has sold off assets before, including the Chicago area’s Arlington Park, which it let go for $197 million five years ago.
CEO Bill Carstanjen covered the pending sales last week on Horse Racing Nation‘s Ron Flatter Racing Pod, and had this to say regarding the current status of the properties on the market:
“That’s underway. That’s in the process of soliciting bids and distinguishing between bids. That’s an ongoing process. As a company, we’ve expanded a lot over the last decade-plus. We’ve gotten heavily into the casino gaming business, we’ve got our big online business, and we’ve got our racing business, which is really the core of what our company is. We need to slim down. We need to focus on what’s most important, what’s special and different about our company. That starts with the Kentucky Derby, our horse racing, our (historic horse-racing machines), our online business. We are reshaping our company and selling some assets here and there after a lot of soul searching and thought.”
Overall, Carstanjen conveyed confidence in the company’s current portfolio and cited the need to be nimble and address existing debt as the motivating factor behind listing the casino properties.
Carstanjen comfortable with prediction market embargo on horse racing
Due to the Interstate Horse Racing Act, prediction markets cannot legally accept wagers on horse racing. Carstanjen was asked if prediction markets came calling to sponsor a race, if he would consider it. He spoke on the intellectual property-like structure of horse racing, and how the Interstate Horse Racing Act serves as a firewall against the industry:
“We have the Interstate Horseracing Act, and that essentially establishes almost an intellectual-property right that we have to offer the gaming product and to allow or disallow people to take wagers on our game. That’s really an important attribute of our business, and it’s critical that we protect that, because that’s how we fund the purses. That’s the only way this all works.
I would say that how we fund our purses as an industry, this whole thing called pari-mutuel wagering and this thing called the Interstate Horseracing Act, is a really important attribute that’s made all this possible. It’s made this whole industry possible. We as an industry need to be careful about being dismissive of that or being cavalier about that. You can’t really point to a lot of places in the world that do it better than us, other than in places that have monopolies on gambling, which is not a concept that will ever exist again in the United States. So we have a pretty good system. This is about everybody being smart enough to maximize it.”
