DraftKings, FanDuel Aim For ‘Easy’ Ahead Of Kentucky Derby Betting

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Kentucky Derby betting

US sportsbooks have several customer acquisition points throughout the year, including the start of the NFL season, the Super Bowl, and March Madness. Still, for horse betting, the critical opportunity is Kentucky Derby betting.

Despite declining handle nationwide, the ability to wager on horse racing has never been easier. FanDuel and DraftKings have horse betting apps with direct access through their online sportsbooks. Each is rolling out similar marketing tactics to capitalize on the mainstream appeal of Kentucky Derby betting.

“The Kentucky Derby does the work itself,” FanDuel Racing general manager Andrew Moore told LSR. “The main thing you are trying to get out there is not that the Derby is happening. It is that you can bet on the Derby. It has been hard in the past, but we are trying to make it as easy as possible and ensure the awareness is there.”

Kentucky Derby betting made easier

In the past, people wanting to place a bet on the Kentucky Derby needed to visit their local racetrack or an off-track betting location, or to sign up for a horse betting advanced deposit wagering (ADW) platform. Going through the sign-up process for one day per year was a hurdle many people did not want to clear, according to Moore.

“Someone who is an NFL or NBA fan might have been interested in the Derby before but not interested enough to go to an ADW, put in their (social security number) and credit card details with a company they never heard of before,” Moore said. “It is not talked about enough how big those things around account and wagering friction are.”

To reduce that friction, FanDuel debuted its shared wallet technology in December 2022. Players can use the same funds to bet on sports and horses.

DraftKings smoothes horse betting process

DraftKings launched a horse racing app, DK Horse, ahead of last year’s Kentucky Derby. It is a white label with TwinSpires technology provided by Churchill Downs Incorporated.

While still separate apps with individual funding, DraftKings announced in April a single sign-on process across its sportsbook app and DK Horse. Players no longer need to log in repeatedly while switching between the products.

“That integration is going to help a lot, and we knew it would,” Johnny Avello, director of race & sportsbook operations at DraftKings, recently told LSR. “We have already seen double the amount of engagement (on the DK Horse app.)”

Kentucky Derby betting business tactics

The consistent theme across Kentucky Derby marketing for FanDuel and DraftKings is content.

FanDuel is partnered with Churchill Downs and will provide live coverage on-site across its FanDuel TV channel and respective social media channels.

DraftKings is employing a similar tactic with race analysis across its DraftKings Network.

Retaining customers a challenge

Last year, Kentucky Derby betting handle hit an all-time high at $188.7 million. It is the most heavily bet race each year. Moore admits that keeping customers beyond the “First Saturday in May” is challenging.

“Many people will bet on horses for the first time in the Kentucky Derby, and if they bet on racing again, it will be on the Kentucky Derby next year. You have to accept that going in,” Moore said.

“It is like the Super Bowl where people do not make football bets all year, then they make a few on the Super Bowl,” Avello said. “That is going to happen, but some will come onboard and stick with racing through the summer.”

Kentucky Derby betting and beyond

Horse betting is not a large revenue driver for sportsbooks. However, investment in racing has increased.

FanDuel rebranded its TVG Network to FanDuel TV and developed a shared wallet. DraftKings launched DK Horse while other online sportsbooks entered the horse betting app market.

Moore told LSR horse betting accounts for a “much lower” percentage of revenue in the US than in other countries. Horse betting makes up 60% of Flutter‘s business in Australia and 35% of its revenue across Ireland and the UK. However, industry analysts see horse betting as a way to tap into their customer base further in the future.

“Customer acquisition and monetization for DraftKings and FanDuel is still so strong that they are not digging into their toolkit, looking for ways to unlock more dollars per user,” Jeffrey Stantial, an analyst with Stifel, told LSR. “The expectation is that, at some point, they are going to dig deeper and try to find new ways to monetize their user base, and we think horse racing is going to be one of those ways.”