Friday February 25, 8:11 am Eastern Time
Company Press Release
eLOT, Inc. to Acquire Virtgame.com Corp. eLottery Subsidiary to
Become Web-Based Retailer of Argentine Lottery Products
NORWALK, Conn.--(BUSINESS WIRE)--Feb. 25, 2000--eLOT, Inc. (NASDAQ:ELOT
- news) today announced
it has entered into an agreement to purchase San Diego based
Virtgame.com Corp. (OTCBB:VGTI
- news), a leading
provider of Internet enabling technology to the lottery and gaming
industries. This transaction further establishes eLOT as a leading
player in the Internet lottery industry and provides entry into an
important additional market through VGTI's agreement to be the web-based
retailer of Internet lottery products for the State of Chaco in
Argentina. In addition, VGTI brings the prospect of advanced border
control technology as well as an experienced team of software
developers.
Under terms of the agreement, VGTI shareholders will receive one
share of eLOT common stock for every three shares of VGTI common stock
held. There are approximately 10.5 million outstanding shares of VGTI,
including 233,333 shares acquired by eLOT in 1996 which will be
extinguished as a result of the transaction. It is anticipated that eLOT
will issue approximately 3.4 million shares to complete the transaction.
Pro forma, for the transaction eLOT will have approximately 66.4 million
shares outstanding. The agreement is subject to certain conditions,
including the discontinuation of operations of VGTI's Constellation
virtual casino, completion of due diligence and VGTI shareholder
approval.
VGTI is currently developing web-based instant lottery games for the
Argentine lottery with sales expected to commence in the second quarter
of this year. The Company has also established an Argentine Internet
site for lottery games at www.juegosoficiales.com
and the State of Chaco has agreed to secure licensing and distribution
agreements with up to seven other Argentine state lotteries allowing
Argentineans nationwide to access eLottery's web retail store from the
site.
In addition to web-based lottery ticket sales, eLottery will also
offer Argentine lotteries its IMARCS Internet marketing solution which
leverages the power of the Internet by delivering one-to-one marketing
messages that maximize ticket sales.
VGTI will also submit to the Nevada Gaming Control Board for approval
a working prototype of a border control technology to be used by the
Nevada gaming industry to offer Internet gaming access to Nevada
residents only. The VGTI Nevada prototype offers state regulators and
the licensed gaming industry a viable solution for intrastate
distribution of licensed and controlled gaming products.
Commenting on the acquisition, eLottery President Mike Yacenda
stated, ``eLottery's domestic lottery focus and broad range of products
and services will be complimented by VGTI's international marketing and
sales capabilities. We believe that Argentina will be a powerful model
that other South and Central American governmental lotteries will want
to emulate.''
Joseph Paravia, President and CEO of Virtgame.com stated, ``eLottery
has had a long standing interest in VGTI dating back to 1996 and has
served as a catalyst that has successfully guided us to the web-based
government lottery business model. We believe our Latin American
experience and contacts will be amplified by the eLOT purchase of VGTI
and we're pleased to have this opportunity to become a part of the
eLottery team.''
eLottery has already contracted to be the Internet retailer of the
Jamaica Lottery. eLottery has made progress on implementing the
web-based sale of Jamaica Lottery tickets with installation commencing
this month and ticket sales expected to begin during the second quarter.
The Company has also established an Internet marketing and promotions
system for the Idaho Lottery. About eLOT, Inc.
eLOT, Inc. is committed to leading the governmental lottery industry
into the e-commerce market. The Company has developed, installed and
operated systems that have processed ten million e-commerce lottery
ticket sales and transactions. It has operated Internet, Intranet,
telephone, communications, accounting, banking, database and other
applications and services that can facilitate the electronic sale of new
and existing lottery products worldwide. The Company has also developed
transitional e-commerce solutions for governmental lotteries, which
leverage the power of the Internet, while political, legal and social
issues are simultaneously addressed. eLottery's corporate web site is on
the World Wide Web at http://www.eLottery.com.
About eLotteryFreeWay.com (http://www.elotteryfreeway.com)
A reward-entertainment lottery portal, eLotteryFreeWay offers lottery
and entertainment games (for no consideration) with registered players
earning ePoints that are redeemable for cash and merchandise.
eLotteryFreeWay's mission is to build an Internet community whose
members are expected to be highly predisposed to purchase governmental
lottery tickets over the Internet.
This news release contains forward-looking statements. Such
statements are subject to certain factors, which may cause eLOT's plans
to differ or results to vary from those expected including the risks
associated with the development of new products and the uncertainty of
product acceptance, the competitive nature of the Company's industry,
rapid technological change, legal uncertainties, the Company's
dependence on key personnel, and a variety of risks set forth from time
to time in Company filing with the Securities and Exchange Commission.
Contact:
eLOT, Inc., Norwalk
Stanley J. Kabala, 203/876-7600
Chairman and CEO
or
Lippert/Heilshorn & Associates, New York
Vince Daniels, 212/838-3777
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