SGR, California horse board reach agreement

The terms of the agreement include the following:

-- SGR implemented its software enhancements on BetJets and non-BetJet terminals under the supervision of the CHRB in order to disable the Quick-Pick betting function until such time, if ever, Quick-Pick betting is allowed by the CHRB;

-- SGR will reimburse the CHRB for the costs of the CHRB investigation into this matter;

-- SGR will make equal voluntary payments to the California Retirement Management Account (CARMA), the Permanently Disabled Jockeys Fund and the California Thoroughbred Health Foundation to support backstretch working family health services;

-- SGR will pay refunds to people who placed Quick-Pick bets at BetJet terminals in California between July 1, 2007 and May 17, 2008, as long as the person can establish through legitimate proof, including, but not limited to, a ticket stub, that they placed said bet. This commitment will extend until June 2, 2009;

-- SGR will report every month for six months, and again on July 3, 2009, to the CHRB on the status of the implementation of the software enhancements to correct the BetJet programming error and consumer claims, if any. To further protect the wagering public, SGR shall also conduct a quality assurance review of its systems and confirm to the CHRB annually the integrity of its systems and that such systems are in good working order;

-- No further administrative action arising from the foregoing facts will be taken by the CHRB against SGR or its affiliated companies, directors, officers or employees.

Richard B. Shapiro, Chairman of the CHRB, stated: "We have found no evidence of intentional misconduct in the programming glitch nor do we find any effort to conceal the error from the public. As SGR management became aware and involved, the Company cooperated with our review and helped bring this matter to closure. We are pleased that SGR will generously contribute to horseracing charities and believe this agreement is in the best interests of both consumers and racing in California."

Kirk Breed, Executive Director of the CHRB, added: "While Quick-Pick is not a popular form of wagering, it is our responsibility to ensure both the public confidence in all forms of wagering allowed and that everyone has a fair chance to win or lose in all forms of regulated gaming."

Brooks Pierce, President of SGR, stated: "We are grateful to the CHRB for working with us to help bring this matter to a close and we are confident in the integrity of our system."