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Australian Gaming Firms Posed for Stronger Profit

15 August 2002

SYDNEY, Australia – As reported by Reuters: "Gaming firms are set to come up trumps in the 2001/02 profit season as gambling mad Australians continue to bet on horse races and feed coins into "pokie" slot machines, undetered by tougher economic times.

"In a country where ardent gamblers can even bet on hopping cane toads or scuttling hermit crabs, the love of a punt should help ensure modestly higher profits for Jupiters Ltd (ASX: JUP), TAB Ltd (ASX: TAB), Tabcorp Holdings (ASX: TAH) and TAB Queensland Ltd TQL.AX, due to report results in the next two weeks.

"…Slot machine maker Aristocrat Leisure Ltd (ASX: ALL) is also due to report its first half profits.

"Australia's biggest gaming and wagering group Tabcorp is expected to show the healthiest profit growth in the sector, largely due to sharp cost cutting and improved margins at its glitzy Sydney Star City casino.

"…Many big spending Asian gamblers have opted to travel to Jupiters' Queensland casinos instead of the world's gambling capital Las Vegas in the wake of the September 11 attacks, helping support that group's earnings over the year.

"But Jupiters recently cautioned that delays in rolling out its Cougar gaming machine monitoring system would dampen its profit, with Multex tipping a A$71.2 million (US$38.6 million) net profit when Jupiters reports on Thursday, from A$77.1 million (US$41.8 million) a year ago.

"…Analysts say a positive surprise could come from its Centrebet sports wagering operation, which was set to benefit from betting on World Cup soccer matches.

"Good second half weather conditions reduced the number of race scratchings and helped improve earnings for betting agencies TAB and TAB Queensland, said analysts.

"…Few surprises are expected on August 19 from TAB Queensland which said in July its fiscal 2002 net profit will rise to about A$24.5 million (US$13.3 million)from A$20.3 million (US$11 million) a year ago, and earnings before interest and tax would rise to about A$36 million (US$19.5 million) from A$29.5 million (US$16.01 million)…"

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