Fairground Gaming's New Business Initiatives

Published: Monday, September 25, 2006 Online-Casinos.com

FAIRGROUND GAMING PUTS SPIN PALACE ONLINE GAMBLING ACQUISITION TO WORK

Two new business initiatives launched

London-listed online gaming investment company Fairground Gaming has been quick to put the Spin Palace group acquisition to work, announcing two new initiatives through the US$66.8 million business group that it purchased on 16 June 2006.

Spin Palace will provide back-office functionality for two new operations - a new 3-D Poker Room and a new Mobile Gaming platform - both of which will go live for real-money wagering later this (September) month. The two contracts, which are unrelated, are being operated on a revenue-sharing basis.

Playwize plc, the AIM listed developer of software for the entertainment industry, has contracted Spin Palace to run the back-end operations for its new 3-D poker room software Pokerwize.com, which enables gamers to play for both fun and for real money. Games developed under Pokerwize, the company's first new offering, give players a claimed revolutionary new way to enjoy the game, including real-time voice chat, full hands calculator, integrated player statistics and an in-depth 3-D tutorial with TV and poker celebrity Helen Chamberlain.

In the second contract, Zero36 Ltd has developed a suite of casino games specifically designed for mobile phone applications. The new software is integrated with the Microgaming-powered back-office platform operated by Spin Palace and is being marketed to major mobile phone companies both in the UK and Europe.

Commenting on developments, Evan Hoff, Chief Executive of Fairground Gaming Holdings plc said: "These are interesting and exciting developments, which demonstrate the prowess of The Spin Palace Group. Through Zero36 we now have exposure to the rapidly growing mobile-gaming sector, with a partner who is focused exclusively on mobile gaming, while with Playwize we have exposure to an exceptionally innovative and largely unique poker product that clearly has huge potential."

Hoff also announced financial results for Fairground's half-year for the period ending 30 June 2006. In addition to the $66.8 million acquisition of Spin Palace in mid-June, the following financial highlights were flagged:

* Proforma net gaming revenue of US$18.9 million, up 27 percent over the previous year
* Cash benefit of Spin Palace acquisition US$3.61 million
* Proforma EBITDA of US$3.86 million and Net Loss of: US$109 000

Hoff said that in a trading sense there were already tangible benefits being seen from ongoing Spin Palace integration. "We completed our first acquisition in mid-June and although the profits do not therefore reflect the benefits of the acquisition, as acquisition accounting rules only allow us to show 15 days of trading, the deal structure ensured that all cash since 1 January 2006, US$3.61million has accrued to Fairground - significantly improving our overall cash position.

"We continue to focus on our strategy of building a broad-based and diversified gaming portfolio, proceeding cautiously in evaluating acquisition opportunities. In light of volatile conditions within the sector, the board has also placed great emphasis on understanding the risks faced by the industry and is implementing appropriate strategies to mitigate such risks.

"The second half of the year will see a full contribution by The Spin Palace Group. Based on indications to date, we are satisfied with the current trading position of your company and expect trading to be in line with expectations for the full year."