BCL Betcorp

RNS Number:8561K
Betcorp Limited
23 October 2006


Friday 20 October 2006


                                BETCORP LIMITED
                          ("Betcorp" or "the Company")

                         DISPOSAL OF GAMING OPERATIONS


Betcorp announces that the Company has entered into an agreement, conditional
only on the approval of Shareholders, to sell the Group's gaming operations and
operating infrastructure in Antigua and Toronto in their entirety ("the Gaming
Operations") to Bodog Entertainment Group SA.


The consideration payable to Betcorp in respect of the Disposal comprises a
maximum cash consideration of US$9 million payable in five instalments. US$3
million is payable on completion and the balance of US$6 million in four equal
quarterly instalments during the 12 months following completion. In addition,
the Purchaser will be assuming the net current liabilities of the Gaming
Operations of US$2 million, implying an enterprise value of US$11 million.


The cash consideration will be reduced by the extent to which the net current
liabilities of the Gaming Operations at completion exceed $2 million. Currently,
these are expected to be approximately US$3 million. The final amount will be
dependent, inter alia, on the trading performance of the Gaming Operations
during the period through to the completion date.


Had the Group's Gaming Operations been closed down, the Board estimates that the
cost of severance and closure would have been approximately US$6 million.


Reasons for the disposal


In the United States, the passing into law of the Unlawful Internet Gambling
Enforcement Act on 13 October 2006, means that the receipt of funds from US
residents by online entertainment companies located in any other country of the
world in connection with internet gambling, has become a Federal offence.


The Board received legal advice and representations from its lawyers, bankers
and other advisors and concluded, in common with many other listed companies in
the sector, that it is no longer possible for the Group to provide its services
to United States residents. The two key issues which led to this conclusion are
the possibility of the extra-jurisdictional application of United States
legislation and the restrictions on financial transaction processing which are
following from the Act. As a result, the Group suspended the accounts of United
States residents on 13 October 2006.


Over the last 18 months, the Group has made good progress in increasing the
level of business from countries other than the United States, principally in
Europe. This has been achieved by a number of initiatives including the
introduction of European facing brands and the development of a proprietary
multi-currency operating platform. Despite this progress, however, the US market
still represented over 85% of the Group's revenues in the period from 3 July
2006 to 13 October 2006.


The Board has considered whether its non-US business could be profitable on the
basis of a substantially reduced cost base, but has determined that this would
not be possible without a major increase in trading volume. In the current
environment, such expansion would require substantial investment in marketing
and brand development, or the acquisition of existing non-US facing operators.
The Group does not have access to the funds required to adopt either of these
strategies and accordingly, the Board has concluded that it is in the best
interests of shareholders to dispose of the Group's entire gaming operations and
infrastructure.



The Board has considered approaches from a number of interested parties and has
concluded that the terms agreed with the Purchaser represent the best available
to the Group. In addition to the cash consideration receivable of up to US$9
million, the Purchaser is also assuming the net current liabilities of the
Gaming Operations and has undertaken to honour the existing employment rights of
employees and the Group's obligations to its customers.


The Purchaser has stated that it intends to invest in developing its own brand
into the European and Asian markets utilising the multi-currency shared purse
operating platform developed by the Group. The Purchaser has also undertaken not
to use any URL, trade mark, brand name or other intellectual property acquired
from the Group to provide services to United States residents, following its
purchase of the Gaming Operations.


Use of Proceeds and Post Disposal Strategy


The Group will have exited its gaming interests in their entirety, immediately
following the Disposal. As a result, the net assets of Betcorp will comprise
cash, the deferred consideration payable by the Purchaser and creditors. The
Board believes that shareholders' best interests will be served by the return of
funds to them and the Board's plans for this will be announced as soon as
possible. Shares traded on AIM and currently listed on ASX will rank pari passu
in any future dividend or distribution, both before and after the de-listing of
the Company's shares from ASX.


Extraordinary General Meeting


Completion of the Disposal is subject to the prior approval of Shareholders at
an EGM expected to take place within the next four weeks. A notice of EGM and an
explanatory memorandum will be sent to shareholders shortly.


Commenting on the acquisition, Colin Walker, Chief Executive Officer said:


"I am pleased that we have secured the sale of our operating subsidiaries to the
Bodog Entertainment Group, one of the leading companies in the digital
entertainment sector. In very difficult circumstances we have achieved a
satisfactory outcome for shareholders and have been able to safeguard the
interests of our customers and employees."


Enquiries:


CPR Communications, Sydney (Investor Relations/Media - Australia)
Martin Cole                                    m.cole@cprcomm.com.au
Tel: +61 2 8213 3082

College Hill Associates, London (Investor Relations/Media - UK)
Matthew Smallwood/Jamie Ramsay                 matthew.smallwood@collegehill.com
Tel: + 44 20 7457 2020


Information on Betcorp


Betcorp is an online gaming group offering customers a comprehensive range of
betting and gaming products. The Group's trading operation is headquartered in
Antigua, West Indies and its IT and marketing divisions are based in Toronto,
Canada. Betcorp is incorporated in Australia and holds a gaming licence in
Antigua and a bookmaker's permit in the UK. With effect from 13 October the
Group ceased to trade with United States residents but has continued to trade
with residents in the rest of the world.


The Company's shares are traded on the AIM market of the London Stock Exchange
under the symbol "BCL". They have also been listed on the Australian Stock
Exchange but that listing will be cancelled with effect from 31 October 2006.
Further details can be found at the Company's website www.betcorp.com.au or
www.betcorpplc.com.



                      This information is provided by RNS
            The company news service from the London Stock Exchange
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