NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: INTERNATIONAL THUNDERBIRD GAMING CORPORATIONTSE, VSE SYMBOL: INB
SEPTEMBER 30, 1998Thunderbird Provides Summary and Status on Operations
SAN DIEGO, CALIFORNIA--September 30, 1998 - International
Thunderbird Gaming Corporation (TSE & VSE - INB).
The following information updates the Company's various operations
and financial status: The actual and potential effects on revenue
and assets resulting from the cessation of activities related to
gaming on certain Tribal lands has been significant. As
previously disclosed in the Company's press release of August 17,
1998, the Company's operating results for the second quarter
ended June 30, 1998 reflect in part the cessation of revenue from
the California revenue share agreements as mandated by the U.S.
Attorneys in California to the effect that the Company could no
longer collect money from noncompacted tribes. Total revenues for
the second quarter ended June 30, 1998 were USD$5.1 million
compared to USD$7.8 million reflecting a USD$2.7 million decrease
from the same period in 1997. The decrease is attributable mainly
to the loss of revenue in California. The Company ceased its
revenue share agreement activities in California on May 13, 1998.
The Company was averaging USD$1,927,000 per month in revenue from
California revenue share operations for the period January 1, 1998
to May 13, 1998. The Company continues to collect revenue from
one of its five revenue share arrangements since May 13,
1998--that being the Table Mountain Tribe. Table Mountain entered
into a state compact on May 13, 1998 thereby avoiding any legal
confrontation with the U.S. Government. The Company averaged
USD$30,000 per month in revenue from the Table Mountain Tribe
during the six months ended June 30, 1998.
The current legal status of gaming on native lands, including any
action taken to date by the California Government: The Company
has issued numerous press releases disclosing the legal status of
gaming on native lands. The previous releases, including the
"Message to Shareholders" that was part of the 1997 annual report
as well as the Q1 and Q2 financial statements provide a thorough
background of the legal status at each juncture.
As previously stated in the press release dated March 9,1998,
California Governor Pete Wilson announced on March 6, 1998, that
he had reached an agreement on a Compact for gaming with the Pala
Band of Mission Indians, a non-gaming Tribe. The California
Tribes "engaged in gaming" fall under the jurisdiction of the
United States Federal Government. Back in May of 1998, the U.S.
Attorneys in California stated that Tribes who do not elect to
either enter into the Pala Tribe "model" Compact, or
alternatively, cease uncompacted gaming and enter into
negotiations with the State by May 13, 1998 would be subject to
enforcement action.
At the time of this press release, 11 California Indian Tribes
elected to sign the "Pala Tribe Compact", although only one of
these Tribes is a Tribe with which the Company does business.
The various Tribes in California are located on reservations in
four Federal Districts. The status of each District is as follows:
(1) Southern District: the three gaming Tribes in the Southern
District (the Barona, Viejas, and Sycuan Tribes) agreed to sign
the Pala-type compact in the face of defending forfeiture
procedures. Governor Wilson and the California legislature
approved these compacts.
(2) Central District: a significant portion of the Company's past
revenues was generated from revenue shares among Tribes in the
Central District. None of the tribes in the Central District have
signed a "Pala-type" compact although the Company understands that
the Tribes have continued to operate their gaming operations. On
July 22, 1998, Federal District Court Judge Letts tentatively
ruled that a permanent injunction would be issued, pending a final
ruling barring the nine Tribes in the District from operating
video gaming machines. Judge Letts agreed with the U.S. Attorneys
that Tribes could not operate gaming machines without a Compact
with the State of California. The Company will provide an update
on this ruling as soon as the Company is informed of Judge Letts' decision.
(3) Eastern District: On July 23, 1998, Federal District Judge
Ishii rejected the U.S. Government's attempt to confiscate video
gaming machines from seven Tribal Casinos. Judge Ishii indicated
that the Tribes in his Eastern Federal District should be allowed
to keep possession of the gambling devices while the State's
complex and murky debate over Indian gambling evolves.
(4) Northern District: There have been no new developments in the
Northern District of California with respect to the issues.
The Company recently sold and assigned all of its rights in its
California based Revenue Share Agreements with the various Tribes
to Support Consultants, Inc., a California corporation ("SCI"), in
furtherance of its commitment to honor the mandate set by the U.S.
Attorneys in California. The assignment included transfer of the
Company's rights to revenue from the revenue share arrangements
with the various tribes as well as assignment of loans. Title to
the machines was not transferred to SCI. In consideration for the
assignment to SCI, the Company accepted a note payable in the
amount of USD$4,500,000 to be paid in installments over three
years, contingent upon SCI's success in collecting such sums from
the various Tribes. The amount of consideration was based upon
numerous factors, including the present value of the revenue
stream, the assumption of all support and maintenance obligations
by SCI, and the likelihood that any revenue and loans will be
collected by SCI. Depending upon whether a favorable settlement
is reached with the non-compacted tribes and the state government,
the Company may receive a partial recovery on its California contracts.
On November 3, 1998, the voters in California will decide whether
to approve Proposition 5, the California Gaming Initiative. The
initiative sets up a battle between the pro-Indian gaming
constituents and the opposition, which is composed of various
interests against Indian gaming in California. If a majority of
the voters vote "yes" on the initiative, then the various Tribes
will be able to continue to conduct gaming in the form that exists
today--that is, the gaming machines that Governor Wilson has been
attempting to outlaw will be legal. Furthermore, in that event,
the Company will likely recover revenue from the SCI transaction
described above.
The current status of operations in Panama: Operations in Panama
have commenced as disclosed in the Company's previous press
releases. By way of background, on January 29, 1998, the Company
announced that it had successfully bid USD$3,550,000 on an
administrative contract to own and operate four casinos in Panama.
The Company announced that one-half of the bid price was financed
by a local Panamanian group that was granted the right to convert
the loan into a 50 percent equity position in the Thunderbird-
Panama subsidiary subject to approval of the Panama Gaming Control
Board. This approval has not yet been received by the local
Panamanian group, although application for approval has been
submitted and the process is ongoing. The local Panamanian group
continues to provide its share of additional financing for the
development and operating costs that are required to open the
facilities. The Company issued two recent press releases on the
Panama operations. The Company is now operating the Fiesta Casino
at the El Panama Hotel and at the Hotel Soloy, both located in
Panama City, Panama. The Company continues to remodel its
casinos in two locations within the country of Panama--the Hotel
David and the Nacional. The Company has financed the development
and remodeling of the casinos through local financing. The
remaining two casinos are scheduled to open by October 15, 1998.
The initial operating results (revenue and operating expenses) on
the Panama operations will be disclosed in the Company's interim
financial statement and Message to Shareholders for the third quarter.
Operations in Guatemala: The Guatemala location of 254 machines
has won all of its legal challenges and is operating
profitability. Although the Company's operations are in
compliance with all government regulations, the Company intends to
cautiously investigate expansion in Guatemala.
Operations in Aruba: The Company's subsidiary, Calsino, Inc.
renovated the Company's Aruba Casino--the Casino Merengue in March
of 1998. Unfortunately, the operation has been losing USD$159,000
per month during the off-season in Aruba which began in April and
ends in October. The Company intends to dispose of the Aruba operation.
Current status and percentage of ownership in Winstreak: The
Company has entered into negotiations to sell its 7.55 percent
ownership interest in Winstreak back to IGN for a price yet to be
determined subject to certain terms and conditions that are in the
process of being documented.
International Thunderbird Gaming Corporation is an owner and
manager of international gaming facilities. Additional
information about the Company is available on its World Wide Web
site at www.intltbird.com. On behalf of the Board of Directors
Jack R. Mitchell, President and CEO |
