AGTech closes China’s first international lottery hardware sale

John Sun, Chairman  & CEO of AGTech, said, “Today’s announcement marks a significant milestone in the development of the Group. We acquired GOT because we believed that its advanced technology would enable strong domestic and international growth. This announcement demonstrates that GOT is a world-class lottery hardware supplier and positions AGTech on the international stage. We are proud to be working with Gold Circle and look forward to securing many more international clients in the future.”

GOT and the C8 terminal
With a domestic market share of more than 50%, GOT’s new generation lottery terminals include the M6 Smart Terminal, A210 Portable Terminal and the C8 Terminal. The C8 Terminal is GOT’s most advanced model. GOT plans to broaden its product spectrum and is currently developing a range of Video Lottery Terminals (“VLT”s) suitable for domestic and international markets. The Group believes that GOT is well positioned to take advantage of the domestic lottery and sports terminal replacement cycle expected to begin in 2013 and also has the opportunity to generate a substantial international business. In addition to the South Africa contract announced today, GOT is in active discussions with a number of other potential international customers and distributors.

Progress update on other strategic initiatives
The initiatives to roll-out the highly successful Lucky Racing sports betting game nationally and to commence trials of more virtual fixed-odds sports betting games are progressing rapidly, in accordance with the Group’s expectations.

The national regulator (PRC Ministry of Finance) has approved Lucky Racing as an authorized game in China and Lucky Racing is now in live operations in Hunan Province where it has become the number one game and year to date has consistently achieved a market share of over 35% of total sports lottery sales. On the back of this proven success, the Group is now actively working with the national operator (China Sports Lottery) to build the necessary large-scale technical infrastructure suitable for wide scale rollout of the game from a central base in Beijing.

The Group’s virtual sports betting system and game technology has proven to be robust and capable and with the introduction of more games, the Group will confirm its position as the leader in this new and rapidly growing sector in China, one of the world’s largest and fastest growing lottery markets. The opportunity to extend the penetration of virtual sports into land-based retail operations is significant as is the opportunity to extend this sector into new forms of remote distribution such as mobile and internet betting as regulation permits.

The Group continues to strategically position itself for the introduction of mobile and internet gaming in China and has established the technical infrastructures, games, resources and international alliances to participate in these new and exciting opportunities.