Hoping it can address through technology the Kentucky Supreme Court's concerns that its current historical horse racing operating system is not pari-mutuel, Exacta Systems will introduce a new HHR system that it says will qualify based on the court's Sept. 24 opinion.
In that opinion rendered Thursday, the Supreme Court said that the Exacta Systems' (formerly Encore Racing Based Games) HHR machines were not operating in a pari-mutuel manner because the wagering was not being conducted by patrons on the same discrete finite events and because pools initially were being seeded.
In a Sept. 25 release, Exacta Systems said in anticipating this possible court outcome, it has already developed a new operating system that will meet those court standards as pari-mutuel. The company, which has games in place at Kentucky Downs and Ellis Park, said it is prepared to present the updated system to the Kentucky Horse Racing Commission in the coming days.
"While we are disappointed with the Court's decision, we do appreciate the clarity that the Court has provided as it pertains to HHR in Kentucky," commented Exacta Systems president Jeremy Stein.
"After several years of litigation, we now have certainty on how HHR systems must operate in the state. In anticipation of this ruling, Exacta has devoted several months of development time to produce an alternate HHR system that complies with the Supreme Court decision," continued Stein. "After reading opposing legal briefs and hearing the questions asked at oral arguments, we wanted to have an alternative system in place that addressed the objections raised by opposing counsel and the various Justices, as a contingency in the case of a negative ruling. The updated Exacta system is fully compliant with the requirements as articulated by the Supreme Court, and we are excited to present our updated system to the Kentucky Horse Racing Commission in the coming days."
Exacta Systems has games at Kentucky Downs, Ellis Park, and the Red Mile—the latter outlet is operated in partnership with Keeneland. There are other brands of HHR games operating in Kentucky but Exacta Systems was the only HHR system considered by the Supreme Court. It's not certain how the ruling may affect those other brands of HHR although a Sept. 25 release from Exacta Systems said the decision "necessarily impacts all HHR system providers and operations in Kentucky."
In its opinion released Thursday, the Supreme Court remanded the larger case brought by the Family Trust Foundation of Kentucky against the Kentucky Horse Racing Commission and all of the Thoroughbred tracks in the state, among others, questioning the legality of the machines, back to the Franklin Circuit Court. It said its 2018 ruling that the Encore system was a pari-mutuel form of wagering was misapplied and the circuit court must now consider the larger case consistent with the Supreme Court's ruling that the Encore system is not pari-mutuel.
Churchill Downs Inc., which does not use the Exacta Systems machines at its facilities, said it would work to ensure that historical horse racing continues in Kentucky. Churchill has partnered with Ainsworth Game Technology and Scientific Games on its machines at Derby City Gaming. CDI is scheduled to launch Newport Racing & Gaming Oct. 2, a facility tied to Turfway Park, which also is scheduled to add HHR games when its new grandstand is complete.
"We will work within our legal rights and in coordination with Kentucky legislators to ensure the ongoing legal operation of our (historical racing) facilities in Kentucky so that we can continue to provide critical funding for the equine industry and support the citizens in the commonwealth of Kentucky," the company said in a Sept. 24 release.
