Magnum to manage Indon game

  • Business
  • Thursday, 08 Jan 2004

MAGNUM Corp Bhd unit Magnum Investment Ltd (MIL) has been appointed as sole manager to develop and promote a game, known as the Sports Welfare Game, in Indonesia. 

Magnum Corp said in a statement that MIL, together with P.T. Multi-Magnum (PTMM), had entered into a management agreement that allowed MIL to be the sole manager until Oct 27, 2010, with an automatic extension of a further three years thereafter, subject to the yearly renewal of the license for the numbers game. 

Under the agreement, MIL will receive a management fee equivalent to 35% of the monthly profit before tax derived from the Sports Welfare Game, which would be launched in the first quarter of this year. 

The Indonesian government had on Dec 16 last year granted a license to P.T Metropolitan Magnum Indonesia to operate the Sports Welfare Game as a means to obtain funds to develop and promote sports and welfare activities in that country. PTMM was appointed by P.T. Metropolitan Magnum as sole operator of the game. 

In the game, a participant purchases a ticket in conjunction with identified sports events. In addition to attendance at the identified sports events, each ticket entitles the holder to participate in a draw offering various pre-determined prizes or their cash equivalent. 

Magnum Corp said MIL's appointment as the sole manager of the game was expected to contribute positively to Magnum Corp's earnings in the medium- and long-term. 

Magnum Corp's share price surged in late afternoon trade yesterday, rising 27 sen or nearly 10% to close at RM3 – its highest level since May 2002 – on volume of 16 million shares. 

Analysts who track the gaming counter found it difficult to quantify the financial impact of the group's venture into Indonesia, where all forms of gambling activities had been prohibited since 1995. 

“There isn’t information on the duty structure, the number of games being held per month or year, and the prize payout. At this junction, it is hard to assess the profitability of the venture,'' said an analyst. 

Some analysts are sceptical that the 'draw with prizes' game might not be able to attract enough interest because its mechanism differed from the 4-digit games concept in Malaysia.  

Nonetheless, others believe that the game would be well received since winners of the games could get either pre-determined prizes, or a 'cash equivalent'. 

Furthermore, they said, the venture would allow Magnum to establish a foothold in a promising market with a population of 234.9 million, 65% of whom was in the 15 to 64 years age group. 

 Stock Watch On MAGNUM

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