Issue 233
February 28 - March 6, 2005
Volume 5
page 1

This Issue

Gaming News

American Company Terminates Its Casino Operations In Suriname

Pair ready to bet $250m in Macau despite opposition

Sky Kings takes to the road

Malaysia's Genting Confirms Bid For Singapore Casino

The Sands Regent Announces Acquisition of Depot Casino and Red Hawk Sports Bar in Dayton, NV

Show Time Olivia Newton-John performs at the Cache Creek Casino Resort.

Column Moneymaker -- Turning $40 into $2.5 million by Howard Schwartz

Check out our entertainment highlights & upcoming tournaments

See the lucky winners


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American Company Terminates Its Casino Operations In Suriname

As reported by Gambling Magazine

Suriname - American gaming company Lottery & Wagering Solutions Inc. announced Friday it is in the process of terminating all of the company's casino operations in Suriname.

This decision came from the Board of Directors and also was announced that the company on February 21, 2005, had entered into an agreement to sell for US$500,000 its wholly owned subsidiary which has operated a small casino in the Golden Tulip Casino Hotel in Paramaribo since September, 2004.

The company's principal operations in Suriname had been conducted from the Plaza Hotel in Paramaribo until December 31, 2004, through its subsidiary, Suriname Leisure Company (SLC). SLC is a fifty-fifty joint-venture with Surinamese company Parbhoe's Handelmaatschappij which operated Suriname Palace Casino.

Partners became bitter enemies because of financial differences. On January 1, 2005, Palace Casino was evicted from its premises in the Plaza Hotel in Paramaribo, and was forced to halt all of its operations. A Suriname Court held that the plaintiff in the eviction proceeding which had taken title to the Plaza Hotel in a foreclosure proceeding was not bound by SLC's existing lease. The lease was for a period of fifteen years.

The operations of Palace Casino and management fees paid to Dorsett Hotels & Resorts, Inc., for managing the operations of the casino, have historically accounted for substantially all of the recent operations and cash flow of the American gaming company

Although an appeal of the eviction is still pending, which if successful, could result in restoration of Palace Casino to the premises in the Plaza Hotel and the reinstatement of the Lease, the Board concluded that termination of operations was in the Company's best interests because of the lack of success of the Company's extensive efforts to identify and obtain a suitable alternative site in Suriname, the physical safety of the executives and staff, the uncertainties of the litigation process in Suriname, and the time and expense involved in Suriname, as well as other factors.

In the meantime Lottery & Wagering Solutions has delayed the completion of its financial statements and the filing of its quarterly report with the US Securities and Exchange Commission for the period ended December 31, 2004, in order to properly reflect in its financial statements the Board's decision to terminate the operations in Suriname.

The move to terminate all of its operation in Suriname comes as a complete surprise to business partner Gautham Parbhoe. Speaking to Caribbean Net News, the Surinamese entrepreneur said he was very surprised, since he has impounded all of the casino's possessions in the course of an ongoing lawsuit.

Efforts to get the side of Palace Casino were futile. The relations between the partners deteriorated when Parbhoe's Handelmaatschappij accused the American management of the casino of holding back revenues. Parbhoe's Handelsmaatschappij who owns the casino license subsequently retracted the permit of the joint-venture operation.

In December 2005 the authorities ordered Palace Casino to stop all activities until it could present a valid license. Since last week casino license holders in Suriname have been scrambling to get their business up and running to meet a government deadline. If license holders don't operate their permit by Monday 28 February, 2005, the permit becomes invalid.

Pair ready to bet $250m in Macau despite opposition

As Reported by the The Standard

Macau -Two Hong Kong-listed companies are poised to take a flutter on Macau's gambling boom over the opposition of their independent directors and the advice of their financial adviser.

The two interlinked companies, Heritage International Holdings and China United International Holdings, want to stake a combined HK$250 million to take a 50 percent interest in Found Macau Investments International, a holding company recently established by the stepfather of Heritage's managing director and two partners to make gambling and entertainment investments in Macau.

Heritage told its shareholders in a circular distributed Friday that Found Macau ``expects to enter into preliminary agreements shortly'' to invest in a HK$240 million-HK$300 million deal for a vacant site to build a casino hotel and a HK$150 million deal to buy an existing hotel and renovate it to include a casino. It added, however, that no progress had been made on the deals in the past month.

Heritage, which has already invested in Macau junket agents, has proposed to its shareholders that it take a 20 percent stake in Found Macau. The investment would take the form of a HK$100 million unsecured, interest-free loan, half in cash and half a bond convertible into Heritage stock.

China United is similarly slated to buy 30 percent of Found Macau and provide a HK$150 million loan. Unity Investments International, another interlinked listed company, will buy 1 percent of Found Macau and extend a HK$5 million loan.

Heritage's three independent directors - Chan Sze-hung, To Shing-chuen and Frank Miu - concluded the proposed deal is ``not fair and reasonable'' to Heritage public shareholders and ``not in the best interest of the company and its shareholders,'' according to a letter from the group attached to the deal circular. The directors base their recommendation to shareholders to reject the deal on the advice of Kim Eng Corporate Finance (Hong Kong).

Kim Eng's attached report found the deal to be unacceptably risky to Heritage's shareholders given the uncertainty over whether Found Macau will generate any profit and the potential dilution of shareholders' stake in the company from 90 percent to 64 percent. That dilution would occur through the convertible bond to be issued to Found Macau and another HK$100 million-HK$150 million in interest-free convertible bonds Heritage would issue to raise funds to finance the shareholder loan to Found Macau.

The new debt would also ``have a material adverse impact'' on the company's financial position, the bank determined.

Independent directors and their financial advisers rarely object to deals in this way in Hong Kong.

A lawyer specializing in corporate finance estimated that opposition arises in less than 2 percent of proposed transactions.

A higher profile protest by the directors of eSun Holdings led its shareholders to reject a buyout offer from parent company Lai Sun Development in 2003; most public shareholders of SmarTone Telecommunications also followed advice to reject a buyout from Sun Hung Kai Properties the same year.

The Found Macau deal will not be sidetracked as easily. The independent directors of China United came to the same conclusion as their counterparts at Heritage after receiving identical advice from Kim Eng, yet all of the 515.8 million independently held shares voted at China United's extraordinary general meeting last Monday were cast in favor of management's Found Macau plan, according to a company announcement.

Of China United's 1.5 billion shares outstanding, 989.7 million were eligible to be voted on the proposal.

Shareholders are scheduled to vote on Heritage's Found Macau plan on March 14. Its last annual report listed casino tycoon Stanley Ho as holding 4.2 percent of Heritage shares. The small size of Unity Investment's proposed contribution means it can proceed without a shareholder vote.

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