Supreme going after $20-b gaming lounge market - Tuesday 12th of July 2005

The gaming lounge market into which Supreme Ventures is aggressively expanding has been estimated by the Betting Gaming & Lotteries Commission to attract a potential annual spend of $20 billion -more than the $16 billion that Jamaicans are expected to spend on lotteries this year.

Yesterday, Walter Scott, the chairman of the commission, confirmed the agencys assessment of the market size, but referred the Business Observer to Derek Peart, the executive director of the agency, for additional details. Peart was out of office.

However, Alexander Melville, the chairman of Prime Sports - the islands largest gaming lunge - that Supreme recently acquired, said he was not surprised by the estimate, given that there were about 10,000 machines in Jamaica, and the nature of this form of gambling.

It is this potentially lucrative market to which Supreme will bring technology, and formality, in order to diversify its income stream away from lottery, and maximise the return to its shareholders.

In fact, the company, which announced on Monday that its $1.8 billion private placement was heavily oversubscribed, will use nearly $800 million of the money raised to pay for Prime Sports and the Coral Cliff Hotel in Montego Bay, for which it has been negotiating for some time. The Coral Cliff has a sizeable gaming lounge.

The balance of the proceeds will go towards retiring the companys debt.

With 450 gaming machines, including those at the recently opened Acropolis in Kingston, Prime Sports is the islands largest operator of its kind. Another big operator is the Terra Nova Hotel in Kingston, which has over 150 machines.

Terra Nova, which is owned by the Hussey family has been expanding its gaming lounge, and is now constructing a new one at the building adjoining the family-owned Liguanea Pharmacy in Kingston.

Thousands of gaming machines are to be found in hundreds of bars and other spots across the island. However, the precise numbers are not known because a licence is required only for operations with a minimum of 20 machines.

Supreme Ventures, which expects sales of nearly $16 billion this year, will undertake a public offer for 10 per cent of its shares later this year, ahead of its listing on the Jamaica Stock Exchange. The original owners sold 20 per cent of their shares in the private placement.

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