DAVIDSON... there was an increase in betting during the quarter, but we were not able to determine why

Executives at Supreme Ventures Limited (SVL) still have not pinned down the reason why its flagship game - Cash Pot - saw an increase in prize payout during the three months ending July 31.

The average liability for prizes - 83 per cent during the quarter - was the highest on record and was largely responsible for the gaming firm's profit dropping to $4.7 million during the period under review, down from the $15.7 million during the comparative period last year.

"There was an increase in betting during the quarter, but we were not able to determine why," said Sonia Davidson, SVL's vice president of corporate communications, in an interview with the Business Observer. "Our best guess is that people are having an issue with the illegal games and are coming back to play registered games, where payment is assured."

Cash Pot is the largest revenue earner for SVL - 79 per cent or $11.4 billion of lottery games' revenue last year - and typically pays out 72 per cent to gamers.

The increase in average liability to 83 per cent, according to the firm, "resulted in additional prize payments and related fees of over $250 million".

Although the tighter margins on SVL's main product would have whittled down its profits, the formation of its new subsidiary, Supreme Ventures Lotteries, gave the gaming firm sufficient breathing room for actually making prize payments while meeting regulatory requirements.

SVL had breached its licence last year, when it appeared that less than 75 per cent of its liabilities were held in cash, due to the drain on its resources caused by heavy acquisitions, such as Prime Sports, and losses made by Acropolis - SVL's gaming lounge located in Barbican Circle - during the year.

Based on an approval granted last December by the Betting, Gaming and Lotteries Commission (BGLC), SVLotteries established a dedicated bank account into which funds were paid "to ensure that on a continuous basis throughout the terms of the licence, the credit balance on that account is not less than 100 per cent of the aggregate amount of SVLotteries liabilities", according to the firm.

The balance in the account was $345.5 million at July 31, 2007, or almost twice the aggregate liabilities held at that time.

SVL is continuing to diversify its income stream, with the latest addition - online bingo - slated to be launched next month.

The bingo game will operate as a pari-mutuel, although the payout forecast is expected to be lower than Lotto, while the odds are expected to be better.

For its franchise operations in Guatemala, which began operations in April and which is expected to bring in $250 million in franchise fees, over the three years 2007-2009, the central American online gaming company will make its first payment at the end of the year, but SVL says it has taken a cautious approach to the market.

"It is a unique market," added Davidson, who told the Business Observer that they now had over 300 terminals located there, compared to the more than 1000 operating in Jamaica.

Video Lottery Terminals, or slot machine earnings, continued to improve, with its revenue growing by 52.5 per cent to $602 million over the nine months to July 31, 2007 compared to the corresponding period last year.

Trousers in Denim

Cream of the 'Crop'

Cheeky's World