Company considers legal recourse
Attractions Hippiques issues formal demand
to Loto-Québec to meet its obligations
and compensate for damages
MONTREAL, June 9, 2008— Attractions Hippiques today sent a legal demand to Loto-Québec calling on the state-owned corporation to meet its obligations and compensate it for the significant financial damages it has suffered as a result of an important breach of the contract resulting from a public request for proposals. If Loto-Québec fails to resolve this matter, Attractions Hippiques will examine all avenues for legal recourse at its disposal.
Attractions Hippiques states that Loto-Québec has unilaterally changed the operating terms and conditions and the type of video lottery terminals (VLTs) at the Ludoplexes in Trois-Rivières and Quebec City, which have significantly reduced revenues. Specifically, Attractions Hippiques stresses that Loto-Québec has introduced a gaming card system that limits the time and total amount wagered on VLTs, a system that has not been applied anywhere else in Quebec..
Not only did Loto-Québec fail to make the necessary urgent improvements to the badly received concept, but the government agency recently dissolved its Ludoplex division. The Ludoplex restaurants at the Trois-Rivières and Quebec City facilities have been closed, without notification to Attractions Hippiques and in contravention of its operating obligations.
Attractions Hippiques also asserts that the government of Quebec and Loto-Québec neglected their obligation to work with its private partner in selecting a site north of Montreal to build a new Ludoplex. Michelle Courchesne, Minister of Education, Recreation and Sports, and Minister responsible for the Laval region, actually obstructed the project from the start in Laval and made a public statement in the May 18, 2008 edition of Courrier Laval, promising the public that no racetrack would be built in Laval or north of Laval.
At no time did Loto-Québec do anything to correct this position. In fact, it seemed to be satisfied, suggesting that it did not want to build a new Ludoplex either in Laval or north of Laval given the unsuccessful business model. Without a Ludoplex at this new racetrack, Loto-Québec is depriving Attractions Hippiques of annual royalties of $20 million from the 1, 300 VLTs that would be located in this facility and operated by Loto-Québec.
Since the 22% of the VLTs’ net revenues earmarked for Attractions Hippiques from the 1,900 machines promised by Loto-Québec has never materialized, racetrack operations have been seriously undermined. As a result, Attractions Hippiques has become unable to fulfill its contractual obligations and was placed in a situation that has caused it significant damages.
From the outset, Attractions Hippiques has always acted in good faith and has invested $74 million to improve its racetracks and in the purse amounts paid out to participants in race programs. It has used every means to advance the construction of a new racetrack in Laval or north of Laval. But it now finds itself with a partner that has no intention of developing a vibrant horse-racing industry in Quebec. Since Attractions Hippiques does not intend to bear the consequences of Loto-Québec’s bad choices and negligence and the government’s actual obstruction to the implementation of the RFP, it has no choice but to consider such legal action.
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Ian G. Wetherly
President & Chief Operating Officer
Attractions Hippiques
514-739-2741 ext. 2221
