Friday, August 24, 2012

Harness Racing: CAL EXPO SCORES!

Webis Holdings has announced that Watch and Wager ("W&W"), a US-incorporated wholly-owned subsidiary of European Wagering Services ("EWS", the Group's pari-mutuel operation), has unconditionally entered into an agreement with California Exposition & State Fair ("Cal Expo") in Sacramento, California.

It is for the lease and operation of standard bred harness race meetings at Cal Expo for a five year term to start next month. with effect from 1 September 2012.

As part of these arrangements, W&W's licence application to operate race meetings at Cal Expo has been approved by the Californian Horse Racing Board ("CHRB"). The approval was received on the basis that certain documentation of a standard nature is submitted by W&W to the CHRB.

The CHRB has also approved W&W's application to hold 16 race meetings in 2012, with the first meeting to take place on 2 November 2012. W&W's application for 2013 racedays will be considered by the CHRB in October in accordance with its standard raceday allocation procedures.

W&W has entered into an agreement to outsource the operation of the race meetings for the duration of the lease to Golden Bear, an independent organisation with expertise in this area. The majority of the funding required by W&W to operate the racetrack will be provided by cash flow generated from EWS's existing pari-mutuel business.

The Group's major shareholder, Burnbrae, has also indicated that it is prepared to provide further funding in support of the racetrack operation as required. The board anticipates that the Cal Expo business will at least break even at operating profit level in its first year of operation.

The Board believes that entry into these arrangements helps fulfil a key aspect of its strategy to extend EWS's presence in the US following the company's move to San Francisco. It also believes that increasing EWS's landbased as well as online presence in the US will help the business to secure additional racing content as well as provide further leverage in management's discussions with banking and other partners to find long-term customer payment processing solutions within the US.

Ed Comins, the Group's Pari-mutuel Operations Director, said: "The agreement with Cal Expo represents a significant milestone in EWS's development, both in terms of the existing business and other opportunities that we expect will arise from our involvement. We are also delighted to help secure the future of harness racing within the State of California."

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