Brian George, CEO of Supreme Ventures Limited.- Rudolph Brown/Chief Photographer

Ashford W. Meikle, Business Reporter

Plans by Supreme Ven-tures Limited to participate in the U.S. lottery, Power-ball, have been cancelled because of restrictions imposed by the three member states of the Multi-State Lottery Association barring lotteries outside United States, according to SVL president and CEO, Brian George.

This is the second snag the company has experienced in its overseas expansion, having put on pause its plans to introduce the West Indies Cricket Board-sponsored lottery because of the decision of Trinidad and Tobago last October to curtail gambling.

"We have stopped our planned VLT expansion into Trinidad," George said at the company's annual general meeting Tuesday.

But the CEO, shrugging off the latest developments, was upbeat about the gaming company's prospects, highlighting the restructuring of its operations, equity injection, and expansion plans, both locally and overseas.

SVL's profits have not performed as well as revenues in its last financial year ended October 31, 2006. Turnover was up 11 per cent to just under $16 billion, but net profit fell 13 per cent, to $165 million, significantly below the $438 million which the company had projected in its prospectus for its initial public offering, and which George attributed to the $110 million in VLT losses at the Acropolis gaming lounge.

The CEO explained that the low net win with VLT gaming was due mainly to the lack of acceptance of the games and, as such, expectations of 'leapfrogging' the market were not met.

Reorganise, restructure

"We realised that we had to reorganise and restructure the operations at Acropolis at the end of the second quarter in 2006," he told shareholders, adding that the changes implemented "resulted in a 58.8 per cent increase in VLT revenues at the Acropolis in the second half of 2006."

In fact, the CEO said SVL plans to expand its VLT lounges and has wrapped up lease agreements with three resort properties, expected to be completed over the next year and a half.

"The lessons from Acropolis have significantly improved (our) method of implementation," he noted.

Reviewing the environment in which the betting company operates, the CEO said the worldwide gaming market was facing challenges associated with changing customer expectations.

"Old games do not hold the same appeal to the emerging generation of players, and (we have) to diversify out of traditional lottery games to ensure long-term sustainable growth and profitability."

In the case of Jamaica, George pointed out that the SVL has to contend with "the existence of a very active competition from illegal gaming operators", as well as religious opposition to gambling, which has an effect on the political directorate.

Shortly materialising

Outlining additional revenue generating initiatives, the CEO told shareholders that the planned expansion into Central America would shortly materialise, and that online bingo would be introduced in November.

"Lottery operations in Guate-mala are scheduled to begin April 2007 with a 15-year licence, and we are currently finalising negotiations in El Salvador and Nicaragua, with GTECH as the technology provider," said George.

He projects revenues of US$119 million over the life of the contract in Guatemala, and US$26.7 million ($1.82 billion) in franchise fees, over the next five years.

ashford.meikle@gleanerjm.com