22nd Apr 2015 08:06
LONDON (Alliance News) - Online gambling and gaming company Sportech PLC on Wednesday said it has struck a deal to improve the terms of a contract it inherited in 2010 via the acquisition of Scientific Games Racing.
Sportech said that under the previous deal, Shoreline Star Greyhound and Entertainment Complex LLC was due to receive around 50% of gross gaming revenue from new forms of gaming in Connecticut in the US for 25 years following the start of its contract with Scientific Games, with Sportech then required to make any necessary capital investment in the joint venture.
Sportech said it considered the terms of this deal to be inequitable and started renegotiating the deal.
Under the terms of the new deal, Shoreline Star will now get around 50% of the profits after tax from the new forms of gaming for 25 years, with this to decline after the first five years of the contract. Any payments under the contract will only occur once Sportech fully recovers any capital investments made.
No consideration has been paid to effect the change to the contract, Sportech said, and no payments have been made to date under the previous or revised contract.
"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," said Sportech Chief Executive Ian Penrose.
"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," Penrose added.
Shares in Sportech were untraded Wednesday, having last traded at 65.00 pence.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
SPO.L