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Sportech Improves Scientific Games COntract
Wednesday April 22,2015 : SPORTECH IMPROVES CONTRACTUAL OBLIGATIONS IN CONNECTICUT
Material improvement for contract that was inherited from Scientific Games Racing business in 2010.
Sportech plc has announced 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, a company owned and controlled by the Zeff family interests, were due to receive approximately 50 percent 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. Sportech was also responsible for any required capital investment.
Sportech considered that this contract would deliver inequitable financial returns, and accordingly commenced its renegotiation, the announcement revealed Wednesday.
"Under the terms of the amended contract, Shoreline Star shall now receive approximately 50 percent 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 recovers any capital investment from additional cash flows generated," the statement explains, adding that no consideration was paid to effect this change, and no payments have been made to date under the previous contract.
Sportech CEO Ian Penrose 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."
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