SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DATE OF REPORT: MARCH 11, 1998
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AMERICAN BINGO & GAMING CORP.
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(Exact name of small business issuer as specified in its charter)
DELAWARE 1-13530
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74-2723809
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(State or other jurisdiction of Commission
(I.R.S. Employer
incorporation or organization) File Number
Identification No.)
515 CONGRESS AVENUE, SUITE 1200, AUSTIN, TEXAS 78701
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(Address of principal executive offices)
(512) 472-2041
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(Registrant's telephone number)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
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On January 28, 1998, the Company reported on Form 8-K that it had dismissed
King, Griffin & Adamson, P.C. (KGA) of Dallas as its principal accountant. The
Company also reported at this time that it intended to hire BDO Seidman, LLP
(BDO) to replace (KGA), pending final acceptance procedures. The Company was
subsequently unable to reach a final agreement with BDO and thus did not enter
into an audit engagement with them. As a result, on March 6, 1998 the Company
signed an engagement letter re-appointing (KGA) as its principal auditor.
ITEM 5. OTHER EVENTS
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On December 19, 1997, the Company reported on Form 8-K that the Attorney General
of South Carolina had joined a civil suit testing the legality of video gaming
under South Carolina law. The Company also noted the possibility of future
legislative action to abolish the video gaming industry in South Carolina. The
Company stated that the abolition of this industry would have a substantial,
detrimental and material impact on the Company. Subsequent to this report, the
Governor of South Carolina publicly indicated his desire to abolish this
industry.
In February of 1998 the South Carolina House of Representatives passed a bill
that would abolish video gaming in June of 1999. This abolition bill has now
gone to the South Carolina Senate for consideration. Two senators, including the
Senate Majority Leader, have publicly declared their intention to filibuster any
bill in the Senate that would abolish video gaming. It is likely that a
filibuster will start within the next few weeks. A two-thirds vote of the Senate
is required to end a filibuster and bring a bill to a vote.
The Company believes that there are currently insufficient votes in the South
Carolina Senate to over-ride a filibuster to bring this bill to a vote. However,
there can be no assurance of the success of a filibuster, if one occurs. If a
filibuster were ended by vote of Senators, it is possible that a bill to abolish
video gaming would then pass.
Video gaming in South Carolina is a $2 billion annual industry that generates
substantial tax revenues for the state. Based on current poll results and
previous referendums, the Company believes that video gaming is supported by a
majority of voters in the state. The Company also believes that this issue may
not be finally resolved until June 4, 1998 when the South Carolina legislature
adjourns. If the South Carolina House and Senate cannot reach agreement on a
bill regarding video gaming regulation, it is possible they may decide to put
the issue to a referendum vote in November of 1998. Based on prior referendum
results, the Company believes the chances for maintaining the legality of the
industry are improved if this issue goes to a referendum, although there can be
no assurance of this result.
The Company currently derives approximately 70% of its revenues from its 700+
video gaming machines in South Carolina. Thus, if video gaming were abolished in
South Carolina, it would have a materially adverse effect on the Company. If the
bill passed in the House were enacted in its present form, management would
likely continue to operate its gaming business there through June of 1999, with
little additional investment and minimized operational costs there in order to
maximize profits during the year-plus phase-out period. Management would develop
and execute a transition strategy during this phase-out period to relocate its
machines to another gaming market or arrange a sale of the machines. However,
there can be no assurance of the success of any transition strategy or the
avoidance of a significant write-off of assets from the abolition of video
gaming in South Carolina. Management plans to continue to diversify the
Company's business into other gaming markets regardless of the outcome of this
issue.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN BINGO & GAMING CORP.
(Registrant)
March 11, 1998 By: /s/ John Orton
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John Orton, Principal Financial Officer
