Scientific Games to provide historical horse racing games through deal in Kentucky Howard Stutz, CDC Gaming Reports · February 20, 2020 at 6:31 am Scientific Games said Wednesday it will enter the historical horse racing gaming machines market through a three-way joint venture with racetrack and casino operator Churchill Downs Inc. and Ainsworth Game Technology. Under the agreement, which was approved by the Kentucky Horse Racing Commission this week, the Las Vegas-based gaming supplier will deliver historical horse racing games to two Kentucky properties operated by Churchill Downs. The games will operate on Ainsworth’s proprietary historical horse racing system, which utilizes race data under an exclusive license with Churchill Downs. Derby City Gaming in Louisville will receive the first delivery of games later this month. The 85,000 square foot facility, located near the Louisville International Airport and the historic Churchill Downs Racetrack, has 1,000 historical racing machines with nearly 90 different game themes. Oak Grove Racing and Gaming in Oak Grove, Kentucky will receive its first delivery of machines when it opens its gaming facilities later in 2020. The facility, currently under construction, will offer 1,200 historical horse racing games. Scientific Games Chief Revenue Officer Robert Parente said Churchill Downs and Ainsworth “have been pioneers in opening up this burgeoning new segment of the gaming market.” Parente said the games “have tax benefits similar to Class II games.” He said being “first out of the gate” among the major slot machine developers gives Scientific Games a head start as the historical horse racing games market expands in the U.S. “We’ll have our normal fair share,” Parente said. Historical racing machines allow players to wager on previously run horse races, although the identities of horses and riders are changed. Players can manually handicap the races using handicapping information provided in the games After a wager is placed, an animated replay of the race finish is shown, and the result of the player’s wager is depicted as part of a slot-type game theme, with cascading symbols and spinning reels. Triple Blazing Sevens – Scientific Games Scientific Games will supply some of its more popular titles to the Kentucky properties, including 88 Fortunes, Tree of Wealth, Quick Hit, Lock It Link, and Ultimate Fire Link. Kentucky racetracks have the most historical horse racing games of any state and the idea has been considered in several markets, including Nebraska, Idaho, Wyoming and Texas. Virginia legalized the games a year ago at Colonial Downs Racetrack. “Scientific Games makes some of the best-performing games in the industry and we are delighted to add them to our Derby City and Oak Grove properties,” Churchill Downs Senior Vice President, Gaming Operations Austin Miller said in a statement. “The sheer depth of their content library, along with their diverse and innovative hardware portfolio, enables us to considerably expand our game offering.” Ainsworth Game Technology Chief Operating Officer Ryan Comstock said the addition of Scientific Games to the Churchill Downs platform “will create an even more robust gaming mix for both these properties.” The announcement comes a day after Scientific Games disappointed the investment community with a loss of $43 million in the fourth quarter, which was attributed to fewer systems launches in Canada and lower machine unit sales. Fourth-quarter revenue fell 2.6% to $863 million and company shares fell shares fell $3.07, or 10.45%, in afterhours trading. On Wednesday, before the historical horse racing deal was announced, Scientific Games shares closed at $24.09 on the Nasdaq, down $5.30 or 18.02%. “Although our confidence is shaken, we are not ready to throw in the towel just yet,” Stifel Financial gaming analyst Brad Boyer told investors Wednesday morning. SunTrust Bank gaming analyst Barry Jonas cut his Scientific Games stock price target from $34 to $32, but maintained a Buy rating, although he called the results “undeniably disappointing.” Last month, Scientific Games said it was revamping its management team in the game’s division, hiring Matt Wilson and Siobhan Lane away from Aristocrat Technologies. “If the new executive gaming team can help CEO Barry Cottle execute his vision to reinvigorate the gaming business, we would view that as incremental upside to our earnings forecast and valuation,” said Union Gaming Group analyst John DeCree. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.