The end of the 20th century saw casino gaming in an expansion mode, with new casinos in tribal and riverboat jurisdictions providing a stream of big orders to suppliers in the industry.
Another development of the late 1990s is coming into its own right now as the newest growth area for gaming suppliers. In 1997, Eric Jackson, who was general manager of Arkansas’ Oaklawn Park racetrack, tapped manufacturers to create a new area in which they could sell hardware and software in states where slot machines were not yet legal. It was called historical horse racing (HHR).
In HHR, data on results of past horse races were logged into software, along with handicapping information related to those races taken from the Daily Racing Form.
Players could use this information on the anonymous races to pick winners of randomly chosen historical races. Wagers would be separated into betting pools for different winning possibilities, such as picking the winner of the race, picking the top three finishers in exact order, etc., after which the anonymous race would run on a slot-like screen, paying the winners.
It was a pool system not unlike that used for Class II gaming. And, as Class II gaming evolved in the early 2000s to provide a slot-like experience on slot cabinets from several manufacturers, so did the technology surrounding historical horse racing.
“There have been various iterations of HHR tried over the years, but the real maturing of the industry happened after 2010,” says Ross O’Hanley (l., with AGS Sales VP Adam Whitehurst), executive vice president of sales for Exacta Systems, which provides the HHR system used by several slot manufacturers.
These days, historical horse racing is one of the industry’s newest growth areas. As happened with Class II gaming, several manufacturers are busy porting their most popular titles over to create new HHR games, most using their own proprietary cabinets to recreate the same play experience as the Class III or Class II originals.
Some slot manufacturers are developing their own HHR platforms—notably Ainsworth Game Technology, which has already ported over its own titles to place more than 2,000 HHR units at racetracks and other venues in states without casino gaming, beginning with Kentucky, the largest market.
Explosive Growth
Exacta Systems is the only platform supplier dedicated solely to the HHR market. Founded in 2013 to address what had become a rapidly growing market, Exacta currently has 3,800 HHR machines active in three states connected to its Exacta Connect system.
“Our system, Exacta Connect, was developed for historical horse racing,” O’Hanley says. “HHR is what we do. A lot of our competitors are focused on Class III, or they’re in Class II. They have other markets that may be distracting their attention from a resource basis. With Exacta, you get a company that’s developing exclusively for HHR.”
O’Hanley, a slot-sector veteran who held executive positions for Konami Gaming, Inc. for nine years in addition to posts at Aristocrat Gaming and Caesars Entertainment, joined Exacta at the beginning of this year to help drive what has become explosive growth in the sector.
By the time he joined the HHR business, the technology of HHR had progressed much in the same way as Class II, with games including the same features as their Class III counterparts, O’Hanley says. “It’s fairly seamless to the player,” he says. “If players do want to (employ handicapping) they’re able to do that, but the majority of our players are simply playing the slot games.”
An “auto cap” feature relieves the player of having to learn handicapping by picking the horses with the highest odds on the player’s behalf. As with the bingo screen in Class II, video or animation showing the race is displayed in a tiny box at the top of the monitor or on the top box. The various prizes of the parimutuel pool are displayed as slot-machine wins.
Game programmers are able to work the math to offer return-to-player (RTP) ranges similar to those of RNG-based slot machines. “In terms of the outcomes, everything is pool-based just like it is for racing,” O’Hanley explains. “So, it’s a matter of working the math so the translation from the races can produce outcomes that settle into that RTP range that the operator wants.”
As one of the leading platform suppliers in the genre, Exacta produces its own content for many customers “We develop our own content,” he says. “We have over 100 organic Exacta games.”
The remainder of the company’s HHR footprint comes from key partnerships with slot manufacturers. Scientific Games placed games on the Exacta system in the Virginia market this month, and the company has inked partnership agreements in Kentucky, Virginia and Wyoming with AGS, Incredible Technologies and Gaming Arts. In addition, Exacta has a content agreement in place with Konami Gaming.But O’Hanley says Exacta’s longest-lasting partnership at present is with AGS. “AGS was one of our first partners,” he says. “The reason AGS has been a great partner is that David Lopez, Adam Whitehurst and their team saw a terrific opportunity very early on to be one of the first in the HHR space, and as a result, their games have become tremendously popular. And, they’ve done a great job of supporting HHR, not only by being an early entrant, but by being very aggressive in their development efforts.”
Whitehurst, who is senior vice president of sales for AGS, says the supplier has ported 10 of its most popular Class III games to HHR, with another 10 in the pipeline to be deployed soon. “With our experience serving the Class III and Class II markets, we were easily able to convert our most popular game content to HHR,” he says. “Player-favorite games like Rakin’ Bacon! have done very well in HHR, and the play of the game is seamless.”
Players enjoy the same features and game play in the HHR versions of the games as in the Class III and Class II games. In the case of Rakin’ Bacon!, funny animation sequences—a golden pig character gets fatter and fatter as reel symbols land, until it bursts with credit awards after a pick bonus—are reproduced meticulously in the HHR version.
“The games we have put out historically that have performed very well have had the same performance in HHR,” Whitehurst says. “We’ve actually had a couple of titles in the HHR pool that have done even better.”
New Markets for HHR
The HHR market is still in a growth phase, with New Hampshire the newest state to approve the genre. “With Exacta as a partner, we look forward to being live there early next year,” Whitehurst says. “We have a presence in Kentucky, Virginia and Wyoming currently, but New Hampshire is next.”
“Once the regulations are finalized by the end of this year, our entrance into New Hampshire will likely be a 2022 event,” says O’Hanley. “But we have seen several states that already have HHR programs looking to expand. Wyoming just opened a new property in Gillette with a new customer there. We’re working on an expansion of a property that’s already live in Virginia; and for Kentucky, we’ve got a new project that will be opening up in December—one of the operators there, Kentucky Downs, is opening a new property in Bowling Green.”
O’Hanley adds that Exacta is watching regulatory development in other states very closely. “As with Class II in markets when the games were new, there are some regulatory hurdles that have to be cleared,” he says, “but one of the things Exacta prides itself on is being vigilant in terms of understanding the rules, working with legislators, and making sure our legal counsel is very involved in the process, so that when we do go into a jurisdiction, everything’s been vetted.
“A lot of states have moved to formalize HHR from what was a little bit of a gray market in the early days to now, where they are fully approved.”
Whitehurst says AGS is prepared to seize opportunity in the growing HHR market. “We have engineers and game developers dedicated solely to HHR, and we look forward to partnering with HHR markets to help them succeed and continue to expand” he says.
As new HHR markets come online, Exacta and AGS are both prepared to remain in the thick of the business—mature suppliers in what has become a mature market.
