Churchill Downs might have gotten out of the online gambling business to a large extent but that doesn’t mean it is disinterested in the gaming industry altogether. On the contrary, it is using those resources to expand its reach in the historical horse racing (HHR) space.
Churchill has agreed to acquire Exacta Systems, a company that provides HHR machines for licensed businesses. Assuming the transaction goes through, it could put new resources behind the gambling vertical to fuel expansion.
Churchill Downs looks to acquire Exacta
Perhaps the best-known name when it comes to live horse racing could soon become just as prominent on the historical racing scene. A press release from Churchill Downs says it has agreed to acquire all of Exacta Systems for $250 million in cash.
Exacta provides HHR games in four US states. Most recently, it expanded its offerings into New Hampshire. Historical horse racing machines appear and function in many ways like traditional slot machines but with some key differences.
Instead of using a random number generator to determine the result of a play, HHR games are predicated on the actual results of real horse races that took place in the past. Many of the machines actually show a video clip of the result of the race to players.
With Churchill’s resources behind Exacta, HHR gaming could gain new momentum.
Might Churchill push HHR machines into new markets?
It’s plausible that Churchill’s investment in Exacta could include a vision for expanding the business into more states. However, that could be a complicated premise. HHR machines have faced legal scrutiny in the past.
Much of the potential legal obstacles pertain to the machines’ similarity to slot games. In many states, laws make offering such games exclusive to casino license holders. Thus, expanding into new markets would have to include a thorough analysis of local and state statutes.
At the very least, Churchill Downs is diversifying its gambling operations with this acquisition. It’s an important step forward for the company after it shuttered its online casino and sportsbook products earlier this year.