Scientific Games Corp. (SGMS), which has announced a number of new or extended contracts from Connecticut to British Columbia in recent days, has decided to make a move toward the relatively untapped China marketplace.
According to an announcement from Lorne Weil, chairman and CEO, Scientific Games has signed an agreement to acquire a 50% interest in Guard Libang, a leading provider of instant lottery tickets in China.
The American company will pay $27 million for its half of Guard Libang which is an indirect subsidiary of REXCAPITAL Financial Holdings Limited, a company that is publicly traded on the Hong Kong market.
Weil said he expects the transaction to be neutral to 2007 earnings and accretive in 2008.
He explained that Guard Libang services contracts for the upgrade and construction of the instant ticket management and sales system of the China Welfare Lottery in approximately 17 provinces in China. Also, the company contracts with over 30 of the country’s wealthiest cities to distribute China Welfare Lottery instant tickets under a cooperative services approach.
”˜This is a great partnership for both us and REXCAPITAL Financial Holdings Limited," Weil commented.
"Guard Libang has done a great job of procuring Chinese instant ticket cooperative service contracts, and this combined entity will seek to execute on these contracts as well as win new deals in other provinces," he added.
In addition to the company’s leading position as a provider of instant lottery tickets worldwide, Scientific Games also provides wagering systems under its wholly-owned subsidiary Autotote, and has pari-mutuel licenses in Connecticut, Maine and the Netherlands.
During the past few weeks, the company announced contracts in Connecticut, Ohio, and with the Great Canadian Gaming Corporation, a company that operates horse tracks in British Columbia, as well as a network of tele-theaters.
Don Barden, who counts the Fitzgeralds Hotel/Casino in downtown Las Vegas among his gaming holdings, has been fighting lawsuits ever since the Pennsylvania Gaming Control Board awarded him the casino license for the Pittsburgh area.
But that will come to a close.
Last week, the Pennsylvania Supreme Court rejected two separate challenges to Barden’s slot machine license, clearing the way for him to build the Majestic Star Casino on Pittsburgh’s North Shore.
Filing the objections to his receiving the license were bidding competitors Isle of Capri Casinos Inc. (ISLE) and Cleveland-based property developer Forest City Enterprises Inc. Both charged that Barden had a poor operating record and that his current casinos were money losers.
In a 6-1 decision, the judges agreed that Barden had less "than optimum financial facets" but that he apparently had the support of investment banks that were prepared to loan him the money to build his project.
Among the major gaming companies that have announced schedules to review their quarterly earnings are:
Penn National Gaming Inc. (PENN) on Thursday, July 26, at 4 a.m. PDT.
Dover Downs Gaming & Entertainment Inc. (DDE) on Thursday, July 26, at 6:30 a.m. PDT.
Boyd Gaming Corp. (BYD) on Wednesday, Aug. 1 at 9 a.m. PDT.
Ameristar Casinos Inc. (ASCA) on Wednesday, Aug. 1, at 2 p.m. PDT.
Scientific Games Corp. (SGMS) on Thursday, Aug. 2, at 5:30 a.m. PDT.
MGM MIRAGE Inc. (MGM) on Thursday, Aug. 2, at 8 a.m. PDT.
Riviera Holdings Corporation (RIV) on Friday, Aug. 3, at 11 a.m. PDT.
THE INSIDER: The Macau Gaming Bureau announced that gambling revenue in the second quarter jumped 50% to $2.45 billion from the year-earlier period. For the six month period, the Chinese enclave’s gambling revenue rose 48.5% to $4.7 billion.
Harrah’s Entertainment Inc. (HET) is disputing the claim that it owes the St. Regis Mohawk Tribe $1.787 million, a sum that was levied by a "tribal" court. The matter goes back to Park Place Entertainment Corporation and its alleged involvement in the tribe’s casino project in the Catskills.
Magna Entertainment Corp. (MECA) says its wholly-owned subsidiary, AmTote Inc., has received a 10-year contract to provide wagering services to Woodbine Entertainment Group.
The Kansas Lottery Commission has decided that the two dog tracks in Wichita and Kansas City can install 800 slot machines each while the facility in Frontenac will be limited to 600 machines.
James A. Burk became chief financial officer for Youbet.com Inc. (UBET) on July 9.
Melco PBL Entertainment Ltd. (MPEL) says its Crown Macau Hotel Casino is now fully operational. The property has 216 rooms, 222 gaming tables and 550 electronic gaming devices.
Lawyers have advised the Pennsylvania Harness Racing Commission that if it awards the state’s last racing license it must restrict the consideration to only the two original finalists — the Shick family’s Bedford Downs and Centaur Inc’s Valley View Downs.
Ameristar Casinos Inc. (ASCA) has promoted Tim Wright to the position of general manager of its Kansas City, Mo., riverboat casino.
PokerTek Inc. (PTEK) has turned to the amusement industry to distribute its new arcade-style heads-up Texas Hold’em poker tables. They have named nine of the country’s leading amusement distributors as partners in the project.
Neteller PLC, the Internet money dealer that operated out of the Isle of Man, has agreed to forfeit $136 million but admit no wrongdoing in settling federal charges brought in New York. The company also agreed to return $95 million held in the accounts of U.S. customers. Two co-founders have already pleaded guilty to conspiracy and money laundering charges.