Churchill Downs could unload all or part of TwinSpires in lush deal

Dec. 06, 2021 10:43 AM ETCHDN, FANA, KMBIFBy: Clark Schultz, SA News Editor1 Comment

Roundhill Investment's weighs in on reports indicating that Churchill Downs (CHDN +2.7%) is exploring a sale of its TwinSpires betting business in a deal that could be worth as much as $1.5B if executed.
Brian Lichtor: "Though it remains unclear at this point whether a potential sale would be of TwinSpires in its entirety or just TwinSpires Racing (the horse racing division), a deal potentially worth $1.5 billion for a company with a market cap just over $8.5 billion would be significant in either case. TwinSpires’ horse racing business has been operational since 2007, and is one of the largest online pari-mutuel platforms for horse racing in the U.S."
Lichot notes that Fanatics (FANA) is likely to be floated as a potential suitor for the business due sports betting aspirations, although it might be expected they are interested in operating in New York where TwinSpires will not be operating. A deal could also have implications on Kambi Group (OTCPK:KMBIF), which is a backend provider for TwinSpires. Kambi has already seen several of its clients insource technology over the last year.
Last month, Churchill Downs added to its buyback firepower with a real estate deal.