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Lasseters Corp. Reports Operating Loss of $12.9 Million for Year Ending June 30

12 September 2001

ALICE SPRINGS, Northern Territory, Australia – (Press Release) -- Lasseters Corporation Limited today announced its annual results for the year to 30 June 2001 but advised they do not reflect the potential arising from its new structure and assets.

Lasseters Corporation was formed on 29 June 2001 through the merger of publicly listed Gocorp Limited with Lasseters Casino Pty Ltd, the operator of Australia's first regulated online casino.

Managing Director, Mr Peter Bridge, said that because of the late settlement of the merger, the company's 2001 financial results include only one day's contribution by Lasseters Casino, which separately, reported a strong financial performance for the year.

Lasseters Corporation reported revenue of $469,000 for the year to 30 June 2001 compared to $4,000 in the previous year. An operating loss after tax of $12.9 million was recorded for 2001 compared to a loss of $16.5 million in 2000.

Mr Bridge said the results reflect two major factors: the high operational costs incurred by Gocorp, particularly in the launch and marketing of its AusVegas online casino; and an 89 percent write-down in the carrying value of the company's fixed assets.

"The global marketing of AusVegas began in July 2000 so the result includes all the major expenses associated with operating and promoting a new e-commerce site," Mr Bridge said.

"Despite showing good early results, AusVegas only traded for six months before it was taken down to comply with the Federal Government's moratorium on online gaming."

Mr Bridge said the decision to write-down the carrying value of net assets from $6.0 million to $642,506 resulted from a review of the accounts following the merger, which found there were asset valuations within the Gocorp accounts that are unsustainable in the long term.

"We want to start 2002 with a clean balance sheet," he said.

"We would rather take the brunt of these major write-downs now so that future reports reflect only the benefit of the merged operations."

The major adjustments were 100 percent write-downs in the $4.0 million value of gaming software licences, and the $530,684 value of the Gocorp offices at Bundall, which the company has been unable to sub-lease due to the oversupply of commercial property in the Gold Coast market.

"We have also been unable to absorb all plant, equipment and computers from the large Gocorp operation. Lasseters Corporation operates with a lean base so anything that could not be used has or will be sold," Mr Bridge said.

Mr Bridge said the success of Lasseters Casino Pty Ltd during 2001 demonstrates the inherent value in the business.

Lasseters Casino increased revenue by 175 percent to $14.7 million in 2001 compared to $5.4 million in 2000. This revenue was driven by a 148 percent increase in turnover from $105.6 million to $262.2 million. The company ultimately recorded a net loss of $2.4 million including the expending of all costs associated with the merger transaction.

During 2001, the number of players registered with the company's online casino, Lasseters Online, rose by 67 per cent from 87,804 to 146,464 establishing a critical mass under the e-commerce business model.

Mr Bridge said the outlook for 2002 was for a period of consolidation with the company focused on driving revenues and containing costs.

"The first of July 2001 represented a new start for the company but this time, we are beginning with the benefit of a proven revenue stream from Lasseters Online of over $1.2 million per month," he said.

"Our initial priority is to now bed down the integration of the Gocorp and Lasseters Casino operations so we can start seeing the benefit of the synergies expected.

"We are also working on the relaunch of the AusVegas site and upgrades to Lasseters Online so that we have two highly competitive online casinos servicing the world market. That way, we have a better opportunity to capture greater market share."

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