Message from Executive Management
In fiscal 2008, GameTech International reached several milestones which culminated a long effort in transforming our company from a bingo business to a full-service gaming company. In fact, fiscal 2008 marked our first full year of operation as a Class III slot manufacturer, in addition to our traditional bingo operations, and also marked the installation of our first fully functional server-based gaming system.
The end of the year featured the most significant event for our company in fiscal 2008. In October we received four licenses from the Nevada Gaming Commission: Manufacturer of Gaming Devices, Distributor of Gaming Devices, Operator of Inter-casino Linked Systems, and Operator of Mobile Gaming System. This was a significant point in our business plan as it represented a full investigation of our company for suitability to operate in what is one of the most important gaming markets in the world. To continue along these lines, in the upcoming year we will begin the process of obtaining approvals for slot products, as well as server-based gaming, in the state of Nevada.
In 2008 we also installed several server-based gaming systems in foreign countries. With our server-based gaming system now operating in four countries, we continue to watch these installations as they develop and mature. Additionally, while in our first full year of operations as a slot manufacturer, we developed new platforms for introduction in the Nevada and California markets. At year end those products were in various stages of review by the regulatory agencies. For fiscal 2009, we expect to expand our presence in the slot machine/VLT markets, as well as the lucrative Louisiana market.
In the past year we also entered into a marketing distribution agreement with a major gaming equipment provider to distribute a very popular hardware platform in our prime VLT markets; Montana and Louisiana. The results from this arrangement should be significant in 2009. Our bingo operations remain steady although down slightly from prior years, as a result of a combination of factors, including increased competition, the economy in general, pricing pressures, and continued migration of commercial accounts to slot machine style gaming. The international market demand for our bingo products continues to show significant growth, however, the higher revenues have been unfavorably impacted by currency valuation fluctuations. By and large the economy affected many of the gaming sectors significantly, but bingo remained relatively stable with our company experiencing only single digit declines.
GameTech also took advantage of an opportunity to refinance our existing debt at a significantly lower interest rate, which allowed us to purchase a building for use as our new corporate headquarters. The resulting interest on the refinanced facility is lower than the interest under on our previous debt remaining from the Summit acquisition. We purchased an existing building, as this decision resulted in a lower monthly cost than constructing a new facility or leasing our prior facility would have afforded our company.
We believe that we are in an excellent position to grow our legacy bingo business and expand into foreign markets, as well as expand our slot machine/VLT business into new jurisdictions in the upcoming year. And at the same time we have multiple opportunities to prove the concept of server-based gaming in the critical major gaming markets around the world. Given the past economic conditions, we are still very optimistic and look forward to a successful 2009.
