Supreme Ventures takes on new gaming partner
Supreme Ventures Limited (SVL) has taken on a new business partner, which will manage what the company refers to as its new 'route gaming system' now being tested in select locations.
Under a US$5 million partnership with local company, ICE Jamaica Limited, SVL has acquired an additional 250 video lottery terminals (VLTs) which it plans to deploy to establishments across Jamaica.
This new project is a signal that SVL has no plans to give up on the gaming segment of the market, which has been a loss-maker for the lottery company over several years, forcing it to downsize its network of shops over time.
The new route gaming project is being executed through subsidiary Prime Sports Jamaica Limited.
Under the arrangement, SVL hopes to eventually deploy some 2,000 VLTs, president and CEO Brian George told Wednesday Business in an exclusive interview.
The gaming machines will be deployed in bars and taverns, selected by ICE Jamaica. The machines will be interconnected through a computer platform manned by Intralot, SVL's gaming machine and IT partner. Intralot is the single largest owner of SVL with a stake of just under 50 per cent.
"The machines will be connected, just like the lottery machines are online, real time," said SVL vice-president of group corporate communications, Sonia Davidson.
SVL has outsourced the management of the gaming machines to ICE Jamaica.
"We have an operating agreement with them. They will be the ones who will be bringing in the machines, deploying them and selecting the sites. We will be working with them, but they will essentially be operating it under our umbrella," George said.
Pressed on the business arrangement between the parties, Davidson said the deal will likely see a split in the revenues between ICE Jamaica and SVL, with the bar operators getting their revenues "either by commission or a split in net wins".
Just last December, SVL closed another two gaming operations and cut 20 jobs, saying the closures were meant to stem losses amid falling revenue. Sports betting and core revenue from lottery games, however, have held their own.
At yearend December 2014, the company reported a doubling of sports betting revenue from $266 million to $587 million year on year. VLT income slipped from $529 million to $409 million, while the hospitality segment served up just $1.7 million, down from $4.9 million.
The year 2014 was strong overall for SVL, whose total revenues jumped from $34 billion to $41 billion - only its Instant Win and Pick 2 lottery games did not make gains - while profits doubled from $482 million to $930 million.
SVL plans to share some of its takings with shareholders to whom it will pay ordinary dividend of 8 cents per share and total dividend of 23 cents per share in March and May - a distribution of more than $817 million overall.
The latest gaming operations to be shuttered in December were the short-lived Odyssey Gaming Lounge at Market Place in Kingston and the Castle Gaming Lounge and Video Lottery Terminal operations in Portmore, but SVL has kept its flagship Acropolis gaming lounge at Barbican in Kingston.
George said SVL recognised that it was spreading itself too thin and so decided to contract its gaming operations and refocus its energies on social gaming, a revised model he first hinted at during the company's annual general meeting nearly a year ago.
George said a route system by its nature, utilises bars and taverns, for which gaming machines is an added service for their patrons.
What will be different for SVL, he said, is that "we are outsourcing the management of them, so that will not be a drain on our management resources as the lounges would have been".
With the first 250 machines of the projected 2,000 already landed, SVL began its testing phase just two weeks ago.
"The machines are already in Jamaica but not yet fully deployed. We have three locations in testing at this point in time and depending on what we see after the testing then we will roll out from there," Davidson said
SVL estimates are that there are about 10,000 to 12,000 amusement boxes locally, and hopes to claim market share by offering even bigger payouts, he said.
The interconnectivity of the route system will allow players to tap a progressively bigger jackpot, the SVL boss said.
"If I'm sitting at a machine in May Pen or Portmore, I could be playing for the same jackpot at a slot machine as the person who is playing in the lounge. And because you are now making this available to the wider community, it means the jackpot gets
bigger," he said.
George adds that the system is modelled somewhat off casino jackpots.