Sportech negotiate CT contractual improvements

RNS Number : 9265K

Sportech PLC

22 April 2015

 

22 April 2015                                                                         

Sportech negotiate substantial contractual improvements in Connecticut

Sportech PLC ("Sportech") is pleased to announce that it has materially improved the terms of a contract that was inherited on its acquisition of the Scientific Games Racing business in 2010.

Under the previous contract, Shoreline Star Greyhound and Entertainment Complex, LLC ("Shoreline Star"), a company owned and controlled by the Zeff family interests, were due to receive approximately 50% gross gaming revenues (less tax) from new forms of gaming (slots, sports betting, etc) in the State of Connecticut for a period of 25 years following their commencement. Sportech were also responsible for any required capital investment.  Sportech considered that this contract would deliver inequitable financial returns, and accordingly commenced its renegotiation.

Under the terms of the amended contract, Shoreline Star shall now receive approximately 50% of profits after tax from these new forms of gaming for a 25-year period (with a ratchet downwards commencing after 5 years) following commencement. Any payments under this revised contract will only occur after Sportech fully recover any capital investment from additional cash flows generated.

No consideration was paid to effect this change. No payments have been made to date under the previous or revised contract.

Ian Penrose, CEO of Sportech, said:

"These material improvements to our contractual arrangements mean that Sportech and Shoreline Star have now more closely aligned our financial interests in the outlook for gaming in Connecticut. At a time when legislation for additional slot machines in the State is gaining momentum, and other forms of gaming may be introduced in the medium term, I am pleased that, following a lengthy and difficult period of negotiation, we now have a structure in place, which will bring increased financial returns to Sportech."

Bob Zeff of Shoreline Star added:

"I have been involved in gaming in Connecticut for over 30 years, prior to the sale of my business to Sportech's predecessor in 2006. I like what Sportech have done in Connecticut over the last few years, the integrity in the way they operate, and their vision for the future. I am happy to revise the financial arrangements, aligning my interests with Sportech's, to the long-term benefit of both parties." 

- ENDS -

For further information, please contact:

Sportech PLC                                                                                               020 7268 2400

Ian R Penrose, Chief Executive

Cliff Baty, Chief Financial Officer

Investec Bank Ltd                                                                                       020 7597 5970

Patrick Robb

Henry Reast

Peel Hunt LLP                                                                                              020 7418 8900

Dan Webster

Richard Brown

Brunswick Group LLP                                                                                 020 7404 5959

Mike Smith, Rosheeka Field

[e-mail]

 

END

 

 

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