Cirsa Italia to appeal latest italian Corte Dei Conti ruling

The CdC first commenced proceedings against Cirsa Italia (and the nine other Italian network operators of slot machines) in 2007 for an alleged failure to comply with certain of its obligations arising from its role as an authorized network operator in Italy and for failure to provide a minimum level of service. The CdC alleged at the time that Cirsa Italia’s noncompliance had resulted in economic damages to the Italian state, and calculated the fines due by Cirsa Italia for all of its alleged violations as 3.3 billion euros (and 98 billion euros in the aggregate for all ten Italian network operators). Cirsa Italia and the other Italian network operators have challenged these CdC proceedings on a number of grounds.

In the latest CdC ruling, announced on February 17, 2012, the CdC determined that Cirsa Italia’s liability is for 120 million euros. Cirsa Italia will appeal this ruling on a number of grounds. The appeal will suspend the execution of the CdC’s fines until the appeal is resolved.

Among other things, Cirsa Italia believes that the CdC ruling fails to take into account the findings of a report by a technical consultant designated by the CdC to determine whether Cirsa Italia and the other network operators are entirely responsible for the damages to the Italian state. Cirsa Italia also believes that the CdC’s methodology for determining the purported amount of economic damages to the Italian state are without basis.

As Cirsa Italia has previously stated, while Cirsa Italia is vigorously challenging the claims that are the subject of the CdC proceedings, there can be no assurance that the CdC’s claims will not be successful and Cirsa Italia will be found liable for some amount of damages, or as to when the proceedings relating to the CdC’s claims will be finally resolved.

For further information with respect to the history of the CdC proceedings and related proceedings, refer to Cirsa’s Annual Report for 2010.