SECURITIES & 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 (Date of earliest event reported): April 11, 2000
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AMERICAN BINGO & GAMING CORP.
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(Exact name of registrant
As specified in its charter)
Delaware 1-13530 74-2723809
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(State or other (Commission (I.R.S. Employer
Jurisdiction of File Number) Identification No.)
incorporation)
1440 Charleston Highway, West Columbia, South Carolina 29169
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (803) 796-7875
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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On April 10, 2000, the Company terminated its contractual relationship with Mims
& Dye Enterprises and has entered into a new contract with consolidated Gaming
Company. LLC of Columbia, South Carolina to operate a portion of the Company's
video gaming machines. The press release is attached as Exhibit 10.1.
On April 11, 2000, the Company announced that it had entered into a contract -
through wholly owned subsidiaries - with Prepaid Elite, LLP of Austin, Texas to
provide phone card dispensing machines with a sweepstakes promotional game at
all of its eleven bingo halls in Texas. Prepaid Elite paid the Company a
$100,000 non-refundable security deposit as a credit against future earnings of
the company. This amount is an approximation of the quarterly earnings
estimated to be received by the Company's wholly owned subsidiaries. The press
release is attached as Exhibit 10.2.
Item 7. Exhibits.
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10.1 Press Release dated April 11, 2000
10.2 Press Release dated April 11, 2000
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Exhibit 10.1
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AMERICAN BINGO ANNOUNCES CONTRACTUAL CHANGES
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American Bingo & Gaming Corporation (NASDAQ Sm Cap - BNGO) announces that
it has terminated its contractual relationship with Mims & Dye Enterprises and
has entered into a new contract with Consolidated Gaming Company, LLC of
Columbia, South Carolina to operate a portion of the Company's video gaming
machines. The effective date of both actions was Monday, 10 April 2000.
The Mims & Dye Enterprises contract (initiated in late 1998) originated to
convert the Company's wholly owned video gaming machine casino operations into a
"route" arrangement whereby the Company received a fixed percentage of revenue
and Mims & Dye was responsible for all operating expenses. This arrangement was
made unworkable by the South Carolina Supreme Court's Gentry Case ruling that
had the affect of diminishing revenue industry wide by approximately 30-35%.
This arrangement was altered in late 1999 whereby American Bingo received all
net operating income and Mims & Dye received reimbursement of their operating
expenses.
Michael Mims had been a Director of the Company when American Bingo and
Mims & Dye Enterprises entered into this contract in late 1998. At the time,
Mims was among the largest shareholders of the Company's common stock. Mims
resigned as a Director in July of 1999 and has subsequently disposed of the
majority of his shareholding in American Bingo.
The new contract with Consolidated Gaming Company, LLC provides for a
revenue sharing arrangement dependant solely upon Consolidated's ability to
increase revenue and reduce expenses.
Three important elements of Consolidated's contract are:
1. 1. a right granted to Consolidated to acquire all of American Bingo's
video gaming machines as they cease operations in South Carolina during the
period 31 May to 30 June 2000 on a basis determined by American Bingo to be
favorable to its shareholders;
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2. 2. a right to broker the sale of the Company's video gaming machines to
third parties on a "success fee" brokerage commission basis; and,
3. 3. the duty to secure, transport, deliver and store the Company's video
gaming machines as directed by American Bingo.
In commenting upon the contractual changes, Jeffrey L Minch, the President
of American Bingo said:
"THE TERMINATION OF THE MIMS & DYE CONTRACT IS A NATURAL CONCLUSION TO THE
IMPENDING CESSATION OF VIDEO GAMING IN SOUTH CAROLINA LATER THIS YEAR. THE
PRINCIPALS OF MIMS & DYE ARE UNDERSTANDABLY INTERESTED IN MOVING ON TO MORE
ATTRACTIVE BUSINESS OPPORTUNITIES. THIS ACTION IS NOT TAKEN BECAUSE OF ANY
PROBLEMS BUT RATHER A RECOGNITION THAT THE ABSENCE OF A PROFIT MOTIVE FOR
BOTH PARTIES SAPS THE RELATIONSHIP OF THE REQUISITE ENERGY NECESSARY TO
CREATE BUSINESS SUCCESS.
THE NEW CONTRACT WITH CONSOLIDATED GAMING INJECTS A FRESH PERSPECTIVE AND
ENERGY INTO THE OPERATIONS AND PROVIDES AMERICAN BINGO WITH A POTENTIAL
PURCHASER OF ALL OF ITS VIDEO GAMING MACHINES AS WELL AS THE OPPORTUNITY TO
SELL ITS MACHINES TO THIRD PARTIES WITHOUT INCURRING UNDUE SELLING EXPENSE.
CONSOLIDATED GAMING WILL SECURE, TRANSPORT, DELIVER AND STORE THE COMPANY'S
VIDEO GAMING MACHINES AT THE DIRECTION OF AMERICAN BINGO THEREBY ALLOWING
THE COMPANY TO SAFEGUARD THESE ASSETS UNTIL CONVERTED INTO CASH OR
OTHERWISE DISPOSED OF."
American Bingo is engaged in the development and operation of charitable
bingo halls. Qualified charities are able to fund their worthy causes by
offering consumers entertainment in the form of bingo games - subject to strict
regulatory oversight - for which the charities pay rent to American Bingo for
the use of the facility subject to long standing leases. American Bingo has
relationships with over 60 such charities.
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Charities playing in American Bingo halls received approximately $3,200,000
in 1999 to fund their noble causes.
American Bingo is the only public company attempting to strategically
consolidate this $12,000,000,000 arcane, niche industry and is currently the
largest public company operating charitable bingo halls in the United States.
American Bingo operates twenty (20) bingo halls in Texas, Alabama and South
Carolina and is currently developing two (2) new bingo halls in Alabama that
will commence operations in 2000.
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Exhibit 10.2
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AMERICAN BINGO ANNOUNCES TEXAS CONTRACT
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American Bingo & Gaming Corporation (NASDAQ Sm Cap - BNGO) announces that
it has entered into a contract - through wholly owned subsidiaries - with
Prepaid Elite, LLP of Austin, Texas to provide phone card dispensing machines
with a sweepstakes promotional game at all of its eleven bingo halls in Texas.
Prepaid Elite is responsible for providing all machines, installation of
the machines, maintenance and servicing of all machines. Prepaid Elite paid
American Bingo a $100,000 non-refundable security deposit as a credit against
future earnings for American Bingo and its wholly owned subsidiaries. This
amount is an approximation of the quarterly earnings estimated to be received by
American Bingo's wholly owned subsidiaries.
In making this decision, American Bingo relied upon the representations of
Prepaid Elite and an opinion issued by the State of Texas Attorney General's
Office opining as to the legality of this type of machine in the State of Texas.
American Bingo has an option to acquire these machines at any time.
In commenting upon the new agreement, Jeffrey L Minch, the President of
American Bingo said:
"THE NEW CONTRACT WITH PREPAID ELITE WILL BE PROFITABLE FOR AMERICAN
BINGO'S WHOLLY OWNED SUBSIDIARIES. WE EXPECT TO SHARE THIS REVENUE IN PART
WITH OUR CHARITY PARTNERS."
American Bingo is engaged in the development and operation of charitable
bingo halls. Qualified charities are able to fund their worthy causes by
offering consumers entertainment in the form of bingo games - subject to strict
regulatory oversight - for which the charities pay rent to American Bingo for
the use of the facility subject to long standing leases. American Bingo has
relationships with over 60 such charities.
Charities playing in American Bingo halls received approximately $3,200,000
in 1999 to fund their noble causes.
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American Bingo is the only public company attempting to strategically
consolidate this $12,000,000,000 arcane, niche industry and is currently the
largest public company operating charitable bingo halls in the United States.
American Bingo operates twenty (20) bingo halls in Texas, Alabama and South
Carolina and is currently developing two (2) new bingo halls in Alabama that
will commence operations in 2000.
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