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NEW Casino City Times newsletter! to Close IRG on February 15

14 February 2008

WOODLAND HILLS, California -- (PRESS RELEASE) --, Inc. (NASDAQ: UBET) announced today that on or before February 15, it would be discontinuing the operations of International Racing Group (IRG Business), which it had purchased in June 2005. The IRG Business has been adversely impacted due to a severe reduction in wagering activity, which was tempered modestly by significant staff reductions since the commencement of the previously reported investigation involving the IRG Business by the U.S. Attorney's Office in Las Vegas, Nevada. The decision was made by Youbet to discontinue these operations because IRG has become unprofitable and shows no sign of altering that status in the near term.

In light of the future outlook for the IRG Business under the continuing investigation, Youbet presently estimates the total amount of the fourth quarter impairment associated with the IRG Business to be approximately $9.9 million, consisting of $6.7 million in the unamortized balance of prior earn-out payments as of November 30, 2007 and $3.2 million of earned but unpaid earn-out payments due August 31, 2008. This future earn-out payment will be subject to any rights of offset or claims that may arise prior to that date which Youbet may assert in order to reduce the obligation to make this potential earn-out payment. This impairment charge will be reflected in Youbet's fourth quarter and year-end 2007 financial results and is subject to further review by Youbet's independent registered public accounting firm. The company will record a charge of approximately $0.5 million for severance costs associated with exiting the IRG Business. In addition, the IRG Business will incur other shutdown costs estimated to range from $0.2 million to $0.3 million to cover lease obligations, outside services, asset disposals and other miscellaneous costs. In addition, the company expects to incur ongoing and possibly material costs associated with its continued cooperation with, and eventual resolution of, the ongoing government investigation, although the precise amount or timing cannot be predicted at this time and such costs are not related to the company's decision to shutdown the IRG Business.

"The decision to close IRG was necessary as we continue to focus our management priorities on improving profitability and shareholder value," said interim Chief Executive Officer Gary W. Sproule. "We would like to thank all of our IRG employees for their hard work and dedication over the past several years."

< Gaming News to Close IRG on February 15 is republished from