Churchill Downs Inc. has acquired certain assets of AmericaTAB, Bloodstock Research Information Services, and the Thoroughbred Sports Network, but officials with the Louisville, Ky.-based company said it will be business as usual at the outset.
CDI announced the $80-million deal with potential earn-out payments of up to $7 million June 12. The separate all-cash transactions, which closed June 11, include the acquisition of the following account wagering platforms: Winticket.com, BrisBET.com, and TsnBET.com.
The account wagering, or advance deposit wagering, platforms are expected to produce $175 million in handle and $43.6 million in revenue in 2008, CDI officials said. The figures take into account the loss of racing product available exclusively through the TVG account wagering platform.
Winticket.com, BrisBET.com, and TsnBET.com are affiliates of AmericaTAB, whose majority owners had been Beulah Park and River Downs racetracks in Ohio. AmericaTAB has more than 10 affiliated wagering sites; most will continue under individual ownership but will be serviced by CDI through the AmericaTAB deal.
“All of the acquired companies will continue to operate under their existing brands,” CDI president Bob Evans said during a June 12 conference with analysts and members of the media, “but in the future, consolidation could make sense. Customers have a variety of choices. I see no reason why we should disrupt their choices or their experience.”
BRIS, which currently employs about 90 staff members, will maintain its current offices in Lexington, Ky. No staffing changes are currently anticipated as a result of the acquisitions. BRIS will provide CDI with handicapping and pedigree data that its new account wagering service, twinspires.com, doesn’t yet offer.
AmericaTAB, whose affiliated wagering services hub through Oregon, will assist in the transition. Rumors of a purchase of AmericaTAB by CDI or another company have lingered since earlier this year, but CDI executive vice president and chief development officer Bill Carstanjen said the purchase wasn’t linked to AmericaTAB’s decision this spring to join TrackNet Media Group, a signal-buying and -selling entity formed by CDI and Magna Entertainment Corp.
“It was a long, long way from being anything real at that point,” Carstanjen said.
TrackNet Media will handle the buying and selling for all CDI-owned wagering sites, officials said. It already does so in the case of most AmericaTAB affiliates.
Former AmericaTAB general manager Mike Weiss, who remains general manager at Beulah Park, said he and others associated with AmericaTAB would “help CDI on the day-to-day transition so it’s seamless for the customers. The customers won’t notice it; it will be transparent.”
Evans said the acquisitions position the company for growth in the account wagering market, which continues to be the fastest-growing segment of the pari-mutuel industry.
“AmericaTAB, BRIS, and their affiliates have proven to be some of the most efficiently operated and customer-focused ADW platforms and data services in the industry and will be a great complement to our newly launched TwinSpires account-wagering service,” Evans said. “We look forward to offering all of our ADW account holders benefits through our player-rewards program, the Twin Spires Club, as well as the high-quality handicapping and pedigree information generated by BRIS and TSN.
“The rich data provided by these information services will be a tremendous resource to customers of all Churchill Downs-operated ADW platforms, including TwinSpires, and will further distinguish our account wagering services from their competitors.”
Happy Broadbent, who previously managed the BRIS family of companies, will join CDI as a corporate vice president and serve as general manager of Winticket.com and the AmericaTAB operations being acquired, as well as BrisBET.com, TsnBET.com, and the BRIS and TSN data services. Broadbent will report directly to Vernon Niven, executive vice president of technology initiatives for CDI and president of the TwinSpires account-wagering platform.
CDI will finance the aggregate $80-million purchase price with a $50-million loan from the company’s revolving line of credit and with $30 million in cash.
The purchase makes CDI “a major player in the account wagering business,” Evans said. The chief competitors in the business are TVG and Youbet.com, both of which have been at odds with CDI and MEC over their creation of TrackNet Media. MEC continues to operate its own account wagering service called XpressBet.
According to first-quarter hub handle figures provided by the Oregon Racing Commission, IRG, a Youbet.com-owned offshore entity that offers rebates, led the way with $87.3 million in handle, followed by TVG at $81.2 million, AmericaTAB at $64.4 million, XpressBet at $56.1 million, and Youbet.com at $35.3 million. Twinspires.com hubs through Oregon but didn’t launch until the second quarter of this year.
