PR from downunder.....
eBet announces joint venture with Penn National Gaming Inc. and TrackPower Inc.
9 February 2000
ASX and Press Release 9 March 2000
eBet Limited, Penn National Gaming, Inc. and TrackPower, Inc. to form International Internet, Telephone Betting and Satellite Broadcasting Joint-Venture
eBet Limited (ASX and NZSE listed: EBT) last night entered into a short-form joint-venture agreement with Penn National Gaming, Inc. (NASDAQ listed: PENN) and TrackPower, Inc. (NASDAQ OTCBB listed: TPWR).
The joint-venture will establish an integrated broadcast, broadband, telephone betting and e-commerce race wagering company by way of TrackPower, Inc. (?TrackPower?) acquiring various assets, technologies, business operations, contracts and management agreements from eBet Limited (?eBet?) and Penn National Gaming, Inc. (?Penn?). The merged entity, which will retain the name TrackPower, Inc., intends a public offering and NASDAQ listing within the next three to six months.
On completion of the joint-venture arrangements it is expected that eBet managing director, Keith Cullen, will assume the role of chief executive officer of the merged entity, and each of eBet and Penn will be entitled to nominate members to the TrackPower board of directors.
Mike Hale, Chairman of eBet, said, ?We have always believed there to be a significant worldwide market for our unique online technology. This joint-venture allows us to dramatically upscale our penetration into global pari-mutual race wagering opportunities?.
He added, ?The joint-venture will provide our shareholders with a major stake in an exciting US-listed company and allow our talented development team in California, USA to drive eBet technology faster and into wider areas. It will enable eBet in Australia to tap into significant technology and wagering developments it would not otherwise have had.?
The partners bring together strong affiliations in the racing industry in the USA, Canada, UK, Australasia and elsewhere. Their aggregation of assets and technologies will enable TrackPower to establish itself as a global satellite and betting player in the racing industry.
Recent industry and regulatory developments and the advent of new technologies has created the opportunity for USA racing to be rationalised and for integration to occur similar to the Australasian racing model. TrackPower?s long term strategy is to use this emerging business model and its US platform as the basis for entry into racing markets worldwide.
TrackPower will merge its US satellite broadcast operations with the telephone betting operations of Penn (by way of an exclusive management contract) and eBet?s global Internet racing operations (by sale and license). eBet will also provide TrackPower with an exclusive worldwide license to its Internet technologies for pari-mutuel race wagering operations. eBet will retain outright and exclusive ownership of its technology for all other gaming and wagering applications including its current Sportsbetting and lottery activities.
In consideration for its contribution to the joint-venture eBet will be issued with 18,000,000 fully paid ordinary shares and 5,000,000 warrants (exercisable at US$1.00) in the capital of TrackPower. Penn will be issued with 18,000,000 fully paid ordinary shares and 1,000,000 warrants (exercisable at US$1.00). Following the issue of shares to eBet and Penn, TrackPower will have on issue approximately 66,000,000 fully paid shares. On issue of shares and exercise of their warrants eBet will hold approximately 32% of TrackPower making it the single largest shareholder, while Penn will hold approximately 26%. TrackPower shares closed at US$2.04 (AU$3.35) this morning.
eBet has appointed Australia?s leading investment bank and gaming sector specialist Macquarie Bank Limited (Macquarie) to advise and assist it with respect to the venture.
On return from the US this morning, Keith Cullen, eBet?s managing director said, ?This joint-venture is unique. For the first time in the history of US racing, we will bring together satellite broadcasting, telephone betting, and Internet betting operations under a single seamless brand. The timing of this venture is ideal, as the industry there is set for a shift from a track-based, state-based wagering model to an at-home, nationwide and international model.?
Peter Carlino, chief executive of Penn, said, ?There is significant potential for growth in the worldwide pari-mutuel race wagering market through an integrated broadcast, betting and technology strategy. Each of the companies in the joint-venture is contributing relevant knowledge and technology allowing us to launch from a very strong base of existing operations, customer numbers and cashflows.?
Penn?s telephone operation covers betting on more than 70 leading US racetracks and services over 40,000 telephone account holders. Penn will be paid an ongoing telephone wagering fee from TrackPower. eBet?s Internet betting covers all New Zealand and many Australian races and has over 10,000 registered Internet users. TrackPower, broadcasting via the Dish Network, reaches more than 500,000 households with its free to air broadcasts of North American racing, and has recently entered into agreements that provide it with exclusive access to certain UK racing for the US market.
The partners consider that efficient video streaming of race broadcasts on the Internet is inevitable and that this will further enhance TrackPower?s Internet distribution and at-home wagering strategy by completing the e-commerce package for racing. eBet has also commenced development of new t-commerce (telecommunications commerce) applications to enable wireless wagering through PDAs (personal digital assistants) such as Palm Pilots and through mobile telephones.
John Simmonds, chairman and current chief executive of TrackPower, said, ?The combination of eBet?s unique online wagering technology, Penn?s broad pari-mutuel relationships and telephone wagering experience and TrackPower?s broad satellite footprint positions the new TrackPower to emerge as the leading in-home wagering service in the US, while providing the company with the resources to capitalise on similar opportunities worldwide.?
Keith Cullen concluded, ?Moving TrackPower to a NASDAQ listing will provide the venture with access to significant capital that it is intended will primarily be applied towards acquisitions as TrackPower pursues further consolidation and growth of the US racing industry. This agreement represents a significant expansion of eBet?s current racing interests and of the licensing agreement it signed last year with Penn Gaming to develop a US-based Internet race betting service.?
The agreement requires the parties to use their best endeavours to execute long form agreements and gain necessary regulatory, contractual and shareholder approvals to give effect to the consolidation of assets within 90 days. During this period each of the parties is subject to ?no shop? provisions with respect to their various asset contributions. eBet is finalising a notice of meeting, in preparation for an EGM to approve its participation in the venture in accordance with ASX listing rule 11.1, which it expects to issue to shareholders by late March 2000. If all necessary approvals are not gained in this 90 day period the agreement will terminate, and eBet will be released from it obligations under the agreement, unless otherwise agreed by the parties.
eBet Limited is listed on the ASX and NZSE (Symbol: EBT). eBet has operations in Australia, New Zealand, and the US. The eBet Group contains two key business units being, the eBet Online Division, which develops, markets and operates gaming & wagering technologies (with websites at www.ebetonline.com, www.ebetlotto.com and www.ebetonline.co.nz ) and the Gaming Systems Division, which develops networked solutions for gaming machines, and was this week issued a Gaming Machine Dealers? License in NSW, the world?s second largest gaming machine market, with approximately 100,000 gaming machines.
TrackPower, Inc. trades on the NASDAQ operated OTCBB (Symbol: TPWR). TrackPower launched its TrackPower satellite broadcast service in April 1999. The first of its kind, TrackPower utilises cutting-edge technology to deliver high-quality live video and wagering services to horseracing fans throughout the United States.
Penn National Gaming, Inc. is NASDAQ listed (Symbol: PENN). It is a leading operator of diversified gaming and pari-mutuel wagering. It owns and operates Penn National RaceCourse and Pocono Downs racetrack and nine off-track wagering facilities. Penn also holds 50% of Freehold and Garden State racetracks and 89% of the Charles Town Entertainment Complex, a racetrack and 1500 slot machine venue. Recently, Penn agreed to acquire Casino Magic Bay and Boomtown Biloxi casinos for US$195 million.
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Further Information:
Ian Westbrook, Westbrook Communications (02) 9231-0922
Keith Cullen, Managing Director, eBet Limited (02) 9439-7088
Penn National Gaming, Inc., Richard Ippolito, Chief Financial Officer, +1 610 373 2400
TrackPower, Inc., J. Graham Simmonds, VP & General Manager, +1 905 839 1430 ext. 352
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