Source: Playboy.com
By: Company Press Release
(NEW YORK and WYOMISSING, PA) — Playboy.com, Inc., a wholly owned subsidiary of Playboy Enterprises, Inc. (NYSE: PLA – news), today announced it has signed an agreement with Penn National Gaming, Inc. (Nasdaq: PENN – news) to develop PlayboyRacingUSA.com, an online pari-mutuel wagering site for horseracing. It is expected to begin operations in the third quarter of 2001.
Under the terms of the agreement, Penn National will be responsible for the service’s development, day-to-day operations and overhead, including hardware and software, management and customer support. Playboy will provide marketing, branding, user interface, design and content. The site will be licensed and operated in Pennsylvania. Penn National, through its wholly owned subsidiary, eBetUSA.com, Inc., has formulated a vertical marketing strategy that builds upon its existing authorization for account wagering.
PlayboyRacingUSA.com will use the expertise of Penn National, one of North America’s leading on- and off-track horseracing operators, to offer a wide variety of pari-mutuel wagering on horseraces in North America. Bettors from around the world will have access, through PlayboyRacing.com, to most of the great racing events originating out of the United States and Canada. Penn National, through its Pennsylvania Horseracing Commission and Pennsylvania Harness Racing Commission approved operation, gives Playboy the opportunity to launch their site with live racing and wagering on nearly thirty racetracks. The site will have safeguards to prevent accepting wagering from states and jurisdictions where online pari-mutuel wagering is prohibited.
Lawrence R. Lux, President of Playboy.com, said, “The site will bring Playboy’s unique brand of sexiness, excitement and fun to online horseracing. Our live Playboy Betting Bunny, Deanna, who consumers will already know from PlayboySportsBook.com, will serve as the site’s interactive hostess. In addition, PlayboyRacingUSA.com will offer a range of distinctive features, including real-time odds, scratches, race results, video event coverage and commentary.”
“PlayboyRacingUSA.com is our second online gaming initiative and the first that will be available to U.S. citizens due to the acceptance of horseracing wagering in many U.S. states,” said Christie Hefner, Chairman of Playboy.com. “This allows us to fully leverage Playboy.com‘s 4.4 million monthly unique visitors which combined with Penn National’s operational expertise will allow us to create a significant high-margin revenue addition to Playboy.com.”
Peter M. Carlino, Chief Executive Officer of Penn National, said, “By teaming with Playboy we are creating an exciting growth opportunity that leverages Penn National’s substantial pari-mutuel expertise, industry presence and systems, with Playboy’s tremendous brand and marketing strengths, including its large and demographically appropriate online and offline audiences. We look forward to a close working partnership and the formal launch of the service in the third quarter.”
Since 1993, industry sources have reported steady annual increases in total on-track and off-track handle (gross wagers) for the U.S. thoroughbred racing industry. Total handle in the U.S. alone was $14.2 billion in the year 2000, an increase of 3.6% over the prior year. Penn National estimates that online pari-mutuel betting amounted to only a few percentage points of total handle in 2000. However, given the rapid growth in online access and the availability of online betting in approximately 37 U.S. states, plus a fast- developing international market, the growth of online pari-mutuel wagering is expected to dramatically outpace the industry for several years.
In February, Playboy announced separate plans to launch PlayboySportsBook.com — which will provide fixed odds wagering on various world-wide sporting events — and said that it expects to add casino games to its online gaming initiatives in the coming year.
About Playboy.com
Playboy.com; a wholly owned subsidiary of Playboy Enterprises, Inc. (NYSE: PLA – news), an international multimedia entertainment company; is the #1 lifestyle and entertainment destination Web site for men. Playboy.com operates Playboy-branded Web sites targeting the entertainment and lifestyle interests of young men, including: Playboy.com ( www.playboy.com ), an advertising and e-commerce-supported Web site that offers a range of entertainment, information and e-commerce; Playboy Cyber Club ( cyber.playboy.com ), a members-only subscription site featuring premium Playboy content and exclusive online events; the Playboy Store ( www.playboystore.com ), which sells Playboy-branded products; and Playboy Auctions (auctions.playboy.com), which auctions Playboy-branded merchandise and admission to exclusive Playboy events, and allows fans to auction their own Playboy memorabilia and collectibles. Playboy.com also operates SpiceTV.com ( www.SpiceTV.com ), a site featuring premium adult entertainment under the Spice brand.
This release contains “forward-looking statements” as to expectations, beliefs, plans, objectives and future financial performance, and assumptions underlying or concerning the foregoing. Such forward-looking statements involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The following are some of the important factors that could cause actual results or outcomes to differ materially from those discussed in the forward- looking statements: (1) government actions or initiatives, including (a) attempts to limit or otherwise regulate the sale of adult-oriented materials, including print, video and online materials or businesses such as casino gaming, (b) regulation of the advertisement of tobacco products, or (c) substantive changes in postal regulations or rates, (2) further increases in paper prices, (3) changes in distribution technology and/or unforeseen delays in the implementation of such technology by the cable and satellite industries that might affect the company’s plans and assumptions regarding carriage of its program services, (4) increased competition for advertisers from other publications and media or any significant decrease in spending by advertisers generally or with respect to the adult male market, (5) increased competition for transponders and channel space, and any decline in the company’s access to, and acceptance by, cable and DTH systems, (6) the effects of the consolidation taking place nationally in the single-copy magazine distribution system, (7) marketing issues facing direct marketing stamp sheet agents, (8) new competition in the adult cable television market, (9) uncertainty of market acceptance of the Internet as a medium for information, entertainment, e-commerce and advertising, an increasingly competitive environment for advertising sales, the impact of competition from other content and merchandise providers, as well as the Company’s reliance on third parties for technology and distribution for its online business, and (10) potential adverse effects of unresolved Year 2000 problems including external key suppliers.
About Penn National
Penn National has been a leader in development and operation of racetracks in the U.S. At the same time, Penn National has been on the leading edge of technology development in the pari-mutuel industry. Penn National’s groundbreaking achievements include being the first telephone account wagering company in the U.S., and the first company to simulcast its races to other jurisdictions for patrons to wager. In November of 2000, Penn National Gaming became one of the first major U.S. racing companies to launch an on-line wagering platform across the Internet at its ebetusa.com website. Penn National owns and operates two Mississippi casinos, the Casino Magic hotel, casino, golf resort and marina in Bay St. Louis, and the Boomtown Biloxi casino in Biloxi as well as three racetracks and eleven off-track wagering (OTW) facilities located in Pennsylvania (two tracks and eleven OTWs) and West Virginia (one track). The West Virginia track, Charles Town Races, presently features 1,974 gaming machines that will soon be increased to 2,000. Penn National is also currently in a merger agreement with CRC Holdings, Inc. where Penn National will be the surviving parent corporation owning the Casino Rouge in Baton Rouge, Louisiana and a management contract for the operation of a casino complex north of Toronto, Canada.
In addition to historical facts or statements of current condition, this press release may contain forward-looking statements that involve risks and uncertainties. You may identify some of these forward-looking statements by the use of words in the statements such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” or words and terms of similar meaning. The Company describes certain of these risks and uncertainties in its filings with the Securities and Exchange Commission, including its Annual Reports on Form 10-K, its most recent quarterly reports on Form 10-Q and its Current Reports on Form 8-K. These risks and uncertainties could cause the Company’s actual results and experience to differ materially from anticipated results and expectations expressed in any forward-looking statements. Given these risks and uncertainties, any or all forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward- looking statements. Furthermore, the Company does not intend (and is not obligated) to update publicly any forward-looking statements. The cautionary advice in this paragraph is permitted by the Private Securities Litigation Reform Act of 1995.
