Date: Fri, 19 Dec 1997 00:58:44 GMT Server: RapidSite/Apa-1.2.1 FrontPage Last-Modified: Mon, 17 Nov 1997 22:58:02 GMT ETag: "141df83-d277-3470cbfa" Content-Length: 53879 Accept-Ranges: bytes Connection: close Content-Type: text/html Florida Gaming Corp. Press Release


FLORIDA GAMING WINS OTB LAWSUIT

MIAMI--(BUSINESS WIRE)--Nov. 17, 1997--Florida Gaming Corp. (NASDAQ-Small Cap: BETS) announced today that a ruling was handed down Nov. 13, 1997 by Leon County, Fla. Circuit Judge George Reynolds III, which granted a Summary Judgement in favor of Florida Gaming Corp. against the Ocala Breeders Sales in Florida Gaming's contention that Ocala Breeders Sales was operating an Off-Track Betting facility without proper authority.

Florida Gaming Corp., owner of the Ocala Jai-Alai Fronton and Inter-Track Wagering (``ITW'') facility at Ocala, Fla., challenged the constitutionality of Florida Statute 550.615 (9) (a), which allowed Ocala Breeders Sales to operate an Off-Track Betting facility in direct competition with its Jai-Alai and Inter-Track Wagering facility at Ocala.

Judge Reynolds ruled the statute did comprise ``special'' legislation that allowed Ocala Breeders Sales to operate an Off-Track Betting facility which favored Ocala Breeders Sales--and was, indeed, unconstitutional.

Ocala Breeders Sales has been operating the only Off-Track Betting facility in the state of Florida since 1991. All other Florida pari-mutuel permit holders, including Florida Gaming Corp., operate Inter-Track Wagering facilities which are regulated by the State of Florida Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering.

``We are very pleased with Judge Reynolds' ruling -- we feel that this ruling confirms our contention that Ocala Breeders Sales has been operating about six years without proper authority,'' commented W. Bennett Collett, Chairman of the Board of Florida Gaming Corp.

Florida Gaming's Ocala Jai-Alai and Ocala Breeders Sales had previously shared that Ocala area Inter-Track Wagering market.

Florida Gaming Corp. is the largest Jai-Alai operator in the world and is now the largest card room operator in the state of Florida. The company owns and operates four Florida pari-mutuel wagering facilities located at Miami, Tampa, Ft. Pierce and Ocala which contain an aggregate of 425,000 square feet of gaming space with over 10,000 gaming positions. The company offers wagering on live Jai-Alai games and Inter-Track Wagering via simulcasting of horse racing (thoroughbred and harness) and dog racing. In addition, poker and dominoes are offered at the new Crystal Card Rooms located at the Miami and Tampa facilities.


November 14, 1997

FLORIDA GAMING CORP (BETS)
Quarterly Report (SEC form 10QSB)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS


GENERAL

Florida Gaming Corporation (the "Company") currently owns and operates four jai-alai and inter-track pari-mutuel wagering facilities (each, a "Fronton," and collectively, the "Frontons") located in South and Central Florida. The Company's business consists primarily of its operations at the Frontons, which include, among other things, live jai-alai, inter-track pari-mutuel wagering ("ITW") on jai-alai, thoroughbred racing, harness racing, and dog racing, poker, dominoes, and the sale of food and alcoholic beverages.

The Company's Fort Pierce, Tampa and Ocala locations provide audio, video and Inter-Track Wagering ("ITW") on live inter-track and interstate broadcasting of horse racing, dog racing and jai-alai from around the State of Florida as well as the rest of the country. The Miami location receives limited ITW broadcasts, but broadcasts its jai-alai performances to other gaming facilities in Florida, the rest of the United States, and Mexico. ITW provides significant additional revenue as well as providing additional entertainment for customers.

The term "pari-mutuel wagering," which refers to the betting by members of the public against each other, as used in this report includes wagering on both live Jai-Alai performances and ITW.

Since its inception, and before the acquisition of the Fort Pierce, Fronton in February 1994, the Company engaged in several other lines of business, none of which are currently in operation. In March, 1993, the Company sold 699,480 shares of common stock to Freedom Financial Corporation ("Freedom") and present management assumed operating control of the Company.

The Company's principal place of business and executive offices are located at 3500 NW 37th Avenue, Miami, Florida 33142. The Company changed its name from Lexicon Corporation to Florida Gaming Corporation on March 17, 1994. The Company was incorporated in Delaware in 1976.


ACQUISITION OF FRONTONS/DEVELOPMENT OF CARD ROOMS

ACQUISITION OF THE FT. PIERCE FRONTON. The Company acquired the Ft. Pierce Fronton from WJA Realty Limited Partnership ("WJA") pursuant to an agreement with WJA dated October 6, 1993. On February 1, 1994, the Company received approval from the Florida Department of Business and Professional Regulation, Division of Pari-Mutuel Wagering (the "DPMW") to transfer the pari-mutuel permit for the Ft. Pierce Fronton from WJA to the Company. The purchase transaction with WJA was also closed on that date. Consideration for the acquisition consisted of 200,000 shares of Company Common Stock and $1,500,000 in cash at closing, plus $1,000,000 in the form of a ten-year 8% mortgage.

ACQUISITION OF THE MIAMI, TAMPA AND OCALA FRONTONS. On September 12, 1996, the Company acquired secured notes (the "WJA Notes") of WJA, with balances aggregating $20,000,000 from the Bank of Oklahoma, N.A., Tulsa, Oklahoma. The WJA Notes were secured by real estate and improvements consisting of three jai-alai and ITW facilities located in Miami, Tampa and Ocala, Florida (the "WJA Frontons") plus other collateral. Consideration for the WJA Notes was a combination of $2,000,000 in cash, a $6,000,000 promissory note bearing interest at the prime rate, 703,297 shares of the Company's Common Stock and a $1,000,000 non-interest bearing note.

On November 25, 1996, the Company entered into an agreement with WJA and Florida Gaming Centers, Inc., a wholly-owned subsidiary of the Company (the "Subsidiary"), pursuant to which the Subsidiary agreed to acquire the WJA assets. The acquisition was consummated as of January 1, 1997. The WJA Frontons acquired were combined with the Fort Pierce Fronton into the Subsidiary.

The consideration for the acquisition included (i) the cancellation of WJA Notes and related obligations acquired by the Company from the Bank of Oklahoma, NA, (ii) the retention by WJA of 200,000 shares of the Company's common stock owned by WJA, and (iii) a profit sharing arrangement described in more detail below. The Company assumed all liabilities of WJA arising in the ordinary course of the business, subject to certain limitations and exceptions. The Company also assumed the principal amount outstanding under a $500,000 promissory note owed to Wheeler-Phoenix, Inc., with the terms amended to provide for repayment of principal over a ten year period following the closing in equal annual installments of $50,000 and an annual interest rate of 6%.

The profit sharing arrangement is based on the Subsidiary's net profits, as defined, before income taxes. The Company will pay WJA 20% of the cumulative net profits of the Subsidiary for each of the ten full calendar years 1997 through 2006, subject to a cumulative $1,000,000 per year cap described below. The cumulative $1,000,000 cap is equal to the product of $1,000,000 multiplied by the number of years in the ten-year period completed, minus the sum of all amounts previously paid under the 20% profit sharing arrangement. In addition, if the Subsidiary has net profits in any calendar year during the ten-year period in excess of $5,000,000, but does not receive a 20% payment on the entire amount because of the cumulative $1,000,000 per year cap, the Subsidiary shall pay WJA 5% of the portion of the net profits on which the 20% payment is not made. No net profit payments will be due after the ten year period. If during the ten year period, the Subsidiary disposes of any of its significant assets or operations, then WJA would be entitled to receive an amount equal to ten percent of the Subsidiary's gain, if any, on the disposition.

Two principals of WJA, Roger M. Wheeler, Jr. and Richard P. Donovan, have entered into consulting arrangements with the Subsidiary. Mr. Wheeler has entered into a ten-year consulting agreement with the Subsidiary, with annual compensation of $100,000 during the first five years of the agreement and annual compensation of $50,000 during the second five years of the agreement. Mr. Donovan has entered into a five-year consulting agreement with the Subsidiary, with annual compensation of $240,000, plus certain benefits.

In 1980, WJA and three other pari-mutuel permit holders formed Summer Jai-Alai Partners ("SJA"), a Florida general partnership, to conduct pari-mutuel jai-alai operations at the Miami Fronton during the summer months ("Summer Operations"). As part of the acquisition of the WJA assets, the Company acquired and currently owns a 21% interest in SJA. Under the terms of the partnership agreement, certain of the Company's costs and expenses will be allocated to Summer Operations based upon specific formulas set forth in the agreement. In addition, pursuant to a lease agreement which expires in the year 2004, SJA rents the Miami Fronton for the time in which the summer jai-alai season is conducted. The rental is based upon 1% of handle, plus applicable Florida sales tax. The Company's 21% interest in SJA is accounted for under the equity method.

CARD ROOM DEVELOPMENT. Florida House Bill No. 337 (now known as section 849.086 of the Florida Statutes) became effective June 1, 1996. This legislation authorized card rooms at licensed pari-mutuel facilities beginning in January, 1997. The card rooms are administered and regulated by the Florida Department of Pari-Mutuel Wagering ("DPMW"). Games are limited to non-banked poker games and dominoes. Card room authorization is also subject to approval by the county commission in which the pari-mutuel facility is located. This same bill also authorized full-card simulcasting of races from out of state tracks such as Belmont, Meadowlands, Philadelphia Park, and Santa Anita. The Frontons in Fort Pierce, Tampa and Ocala are currently carrying several of these signals. This legislation also reduced the pari-mutuel tax on handle from 5% to 4.25% at the Tampa, Fort Pierce, and Ocala frontons. The pari-mutuel tax at Miami was reduced from 5% to 3.85%.

In late 1996, the county governments of Dade County and Hillsborough County, Florida, passed legislation permitting card rooms to be operated by all pari-mutuel facilities located in those counties. As a result, the Company opened card rooms in Miami (on June 19th with 40 tables initially) and Tampa (on May 22nd with 30 tables initially) during the second quarter of 1997. Pursuant to Florida Statute 849.086 the Miami and Tampa facilities conduct low stakes ($10 per hand) poker and dominoes at these facilities two hours prior to, during and two hours following live jai-alai performances. A rake of $.25 per person is the pari-mutuel's revenue from each hand dealt. Domino tables are rented at the rate of $1.50 per half hour per player. Florida state taxes will be paid at 10% of this revenue and 4% of the revenues will be paid to the Jai-Alai players.

The Jai-Alai industry generally has declined in the last several years due to an industry-wide strike by jai-alai players and the passage of legislation authorizing a state-wide lottery in 1987. Average state-wide on-track handle per performance for the state of Florida fiscal years ended June 30, 1996 and 1995 was approximately $79,004 and $87,512, respectively. Aggregate

handle for the fiscal year ended June 30, 1996 decreased approximately $10 million or 5%. There can be no assurance that the jai-alai industry will improve significantly, if at all, in the future. Because the Company's jai-alai business is tied directly to many if not all of the factors which influence the jai-alai industry as a whole, another players strike or the enactment of unfavorable legislation could have an adverse impact on the Company's operations.

Inter-track wagering has grown significantly since its initiation in the State of Florida in August, 1990. The State-wide ITW handle for the State of Florida's fiscal year ended June 30, 1991 was approximately $109 million. The state-wide ITW handle for the State of Florida's fiscal years ended June 30, 1995 and 1996 increased to approximately $443 million and $480 million, respectively. ITW handle at the Company's Frontons (including the newly acquired Miami, Tampa and Ocala facilities) have demonstrated similar growth in recent years, increasing from $46.8 million in the year ended December 31, 1995 to approximately $50.3 million for the year ended December 31, 1996.


RESULTS OF OPERATIONS - THREE AND NINE MONTHS 1997 COMPARED WITH THREE AND

NINE MONTHS 1996

During the quarter and nine months ended September 30, 1997, the Company's operations reflects nine months' operation of live Jai-Alai performances at the Miami and Tampa. The Ft. Pierce Fronton conducted live jai-alai performances January through April. A full schedule of inter-track wagering was also conducted at all facilities with the exception of Miami, which offers limited ITW product due to blackouts imposed as a result of its close proximity to other South Florida pari-mutuels. The Miami facility, however, broadcasts its jai-alai performances to other gaming facilities in Florida, the rest of the United States, and Mexico. The Ocala Fronton only operated inter-track wagering during the first quarter and began its live season May 25th and concluded its live season September 1st.

HANDLE ANALYSIS Total Handle (amount of money wagered) for the quarter ended September 30, 1997 was $19,783,557 of which $6,070,069 was from live and host jai-alai wagering and $13,713,488 was from inter-track guest wagering. Total handle for the nine months ended September 30, 1997 was $103,175,222, of which $60,484,796 was from live and host jai-alai wagering and $42,690,426 was from guest inter-track wagering. These numbers do not include handle for the Miami facility for the period from July 2, 1997 through September 30, 1997, since the facility is operated by the Summer Partnership during this time.

Total handle for the quarter ended September 30, 1996 was $5,389,831 of which $0 was from live jai-alai wagering and $5,389,831 was from inter-track wagering. Total handle for the nine months ended September 30, 1996 was $20,548,983, of which, $3,665,582 was from live jai-alai wagering and $16,883,401 was from inter-track wagering.

HANDLE INCREASE Total handle for the quarter ended September 30, 1997 was $19,783,557, an increase of $14,393,726 over the same period in 1996. The increase consisted of an increase in live and host jai-alai handle of $6,070,069 and an increase of $8,323,657 in ITW handle.

Total handle for the nine months ended September 30, 1997 was $103,175,222, an increase over the same period in 1996 of $82,626,239. This increase was attributable to an increase in live and host jai-alai wagering handle of $56,819,214 and an increase in inter-track wagering handle of $25,807,025. These increases were primarily the result of the pari-mutuel operations acquired from World Jai-Alai as described above.

REVENUES Pari-mutuel revenues (net of state pari-mutuel taxes) for the quarter ended September 30, 1997 were $2,431,532, compared to pari-mutuel revenues of $490,704 for the same period in 1996. Pari-mutuel revenues for the nine months ended September 30, 1997 were $14,049,652 compared to pari-mutuel revenues of $2,439,110 for the same period in 1996. Revenues for the quarter ended September 30, 1997 ($2,431,532), consisting of $1,211,417 from live jai-alai wagering and $1,220,115 from inter-track wagering. Revenues for the quarter ended September 30, 1996 ($490,704) consisted of $-0- from live jai-alai wagering and $490,704 from inter-track wagering. Revenues for the nine months ended September 30, 1996 ($2,439,110) consisted of $807,805 from live jai-alai and $1,631,305 from inter-track wagering. These increases were primarily the result of the pari-mutuel operations acquired from World Jai-Alai as described above.

The Company opened two card room facilities, one at Tampa on May 22nd , and Miami opened their card room on June 19th. Card room Revenue for the quarter ended September 30, 1997 was $206,292, and the nine month period ended September 30, 1997, was $305,941. Revenues from the card room operations have not yet produced the results anticipated.

Admissions income, net of state taxes, for the three and nine months periods ended September 30, 1997 were $86,800 and $412,399 respectively. This compares to $26,779 and $104,113 for the three and nine month period ended September 30, 1996. Food, beverage and other income for the quarter and nine months ended September 30, 1997 were $826,130 and $3,113,007, respectively. This compares to the three and nine month period ended September 30, 1996 of $106,502, and $603,067, respectively. These increases were primarily the result of the WJA asset acquisition. Attendance for live jai-alai performances and ITW performances was approximately 169,858 and 836,174 for the quarter and nine months ended September 30, 1997, respectively. This compares to 227,819 and 866,956 for the same periods in 1996.

These numbers do not include revenues for the Miami facility for the period from July 2, 1997 through September 30, 1997, since the facility is operated by the Summer Partnership during this time. The Company recognizes income and losses on its 21% ownership in the Summer Partnership on the equity basis.


GENERAL AND ADMINISTRATIVE EXPENSES

The Company's general and administrative expenses were $1,852,863 and $6,645,907 for the three months and nine months ended September 30, 1997, respectively. This compares to $489,425 and $1,403,336 for the three months and nine months ended September 30, 1996, respectively. The increase of $1,363,438 for the quarter ended September 30, 1997, as compared to the same period in 1996 resulted from taking on the cost of administration for three additional Jai-Alai facilities in Miami, Tampa, and Ocala, Florida, net of staff reductions and consolidations.

Significant categories of general and administrative expenses and their comparison to the third quarter last year are as follows. Executive salaries were $327,133 for the third quarter of 1997 compared $152,912 for the quarter ended September 30, 1996. Advertising increased $106,841 to $137,138. Professional fees were $131,257 compared to $48,516 for the same three month period in 1996. Consulting fees increased from $6,500 to $86,200. Former executives of World Jai-Alai were paid $86,200, pursuant to the purchase agreement. Travel and entertainment expense totaled $101,946 for the third quarter of 1997, compared to $23,341 for the third quarter of 1996. Another significant cost included is approximately $256,993 in payroll taxes. Employee benefits increased to $235,442. Property and other taxes increased significantly to $161,559 as a result of the WJA purchase. Insurance also increased significantly to $188,589 as a result of the company's expanded operations. Public company costs including shareholder relations/information and filing fees increased to $39,596 from $27,882. Interest expense totaled $166,430 and $65,184 for the three month period ended June 30, 1997 and June 30, 1996, respectively. The $101,246 increase in interest expense was primarily the result of the bank debt incurred which was related to the purchase of the WJA facilities described earlier.

Significant categories of general and administrative expenses and their comparison on a nine month period in 1997 versus 1996 are as follows. Executive salaries were $869,832 for the nine months ended September 30, 1997, compared to $442,738 for 1996. Advertising increased $841,634 to $997,860, with approximately $250,000 utilized in the promotion and introduction of the new card room facilities. Professional fees were $281,987 compared to $139,271 for the same period in 1996. Consulting fees increased from $27,407 to $260,300. Former executives of World Jai-Alai were paid $257,633, pursuant to the purchase agreement. Travel and entertainment expense totaled $309,934 compared to $164,266 for the first nine months of 1996. Another significant cost included is approximately $934,456 in payroll taxes. Employee benefits increased to $617,326. Public relations expense increased to $233,912 as the result primarily of admission and other discounts at the expanded group of facilities. Property and other taxes increased significantly to $549,303 as a result of the company's expanded operations. Insurance also increased significantly to $427,832 as a result of the company's expanded operations. Public company costs including shareholder relations/information and filing fees increased to $121,067 from $85,973. Interest expense totaled $482,704 and $146,933 for the nine month period ended September 30, 1997 and June 30, 1996, respectively. The $335,771 increase in interest expense was primarily the result of the bank debt incurred which was related to the purchase of the WJA facilities described earlier.


OPERATING EXPENSES 3RD QUARTER

The Company's operating expenses for the three months ended September 30, 1997 and September 30, 1996 were $2,920,009 and $495,970, respectively. Depreciation and amortization expense for the three months ended September 30, 1997 and September 30, 1996, was $191,269 and $48,600, respectively. Player costs, which include salaries, benefits, and support staff, represent a significant portion of operational expenses. Player costs for the quarter ending September 30, 1997 and September 30, 1996, were $1,632,556 and $-0-, respectively, reflecting the expanded operation of schedules in Miami, Tampa and Ocala compared to ITW operations only during this period in 1996 at the only fronton owned by the Company (at that time) at Ft. Pierce. Rental and service costs for totalizator wagering equipment and satellite receiving/television equipment also represent a significant portion of operating expenses. These expenses totaled $270,643, for the three months ended September 30, 1997, compared to $49,851 for three months ended September 30, 1996. The components of the 1997 total ($270,643) were $58,034 in ITW tote, interface, and telephone charges; $164,298 in totalizator equipment rental; and $48,311 in satellite charges and camera/television rental. Utilities expense totaled $330,872 and $24,257 respectively, for the three months periods ended September 30, 1997 and September 30, 1996. Program costs totaling $114,318 and $24,800, respectively, are also included in the total operating expenses for the three month periods ended September 30, 1997 and 1996. Operating expenses, including payroll costs for the bar, restaurant, souvenir and concessions costs were $398,826 and $34,215 for the three month periods which ended September 30, 1997 and September 30, 1996, respectively. Operating payrolls and contract costs totaled $1,049,775 and $199,202 for the three month periods ended September 30, 1997 and September 30, 1996, respectively, excluding player costs and payroll costs included in the bar, restaurant, souvenir and concessions areas. Of the $1,049,775, $262,343 was mutuels payroll, $390,027 was maintenance and $302,982 was security. Maintenance and cleaning supply expenses for the three months ended September, 1997, totaled $121,236. These increases were primarily the result of the expanded pari-mutuel operations due to acquisition of the assets of World Jai-Alai.


OPERATING EXPENSES NINE MONTHS

The Company's operating expenses for the nine months ended September 30, 1997 and September 30, 1996 were $12,863,964 and $2,635,327, respectively. Depreciation and amortization expense for the nine month period ended September 30, 1997 and September 30, 1996, was $482,991 and $145,800, respectively. Player costs, which include salaries, benefits, and support staff, which represents a significant portion of operational expenses. Player costs for the nine months ended September 30, 1997 and September 30, 1996, were $4,943,119 and $670,838, respectively, reflecting the expanded operation of schedules in Miami, Tampa and Ocala compared to only four months of jai-alai operation at only the Ft. Pierce fronton during this same period in 1996. Rental and service costs for totalizator wagering equipment and satellite receiving/television equipment also represent a significant portion of operating expenses. These expenses totaled $1,414,027, for the nine months ended September 30, 1997, compared to $266,908 for nine months ended September 30, 1996. The components of the 1997 total were $210,311 in ITW tote, interface, and telephone charges; $615,929 in totalizator equipment rental; $286,893 in satellite charges and $300,893 in camera/television rental. Utilities expense totaled $853,876 and $91,139 respectively, for the nine months periods ended September 30, 1997 and September 30, 1996. Program costs totaling $470,314 and $92,974, respectively, are also included in the total operating expenses for the nine month periods ended September 30, 1997 and 1996. Operating expenses, including payroll costs for the bar, restaurant, souvenir and concessions costs were $1,875,315 and $279,638 for the nine month periods which ended September 30, 1997 and September 30, 1996, respectively. Operating payrolls and contract costs totaled $3,576,806 and $775,108 for the nine month periods ended September 30, 1997 and September 30, 1996, respectively, excluding player costs and payroll costs included in the bar, restaurant, souvenir and concessions areas. Of the $3,576,806, $1,152,305 was mutuel payroll, $1,085,890 was maintenance/janitorial and $923,605 was security. Maintenance and cleaning supply expenses for the nine months ended September 30, 1997, totaled $428,265. These increases were primarily the result of the expanded pari-mutuel operations due to acquisition of the facilities of World Jai-Alai.


OTHER INCOME

The Company had net interest and other income of $55,517 and $267,078 for the three and nine month period ended September 30, 1997, respectively, as compared to $535,536 and $640,441 for the three and nine month periods ended September 30, 1996. The decreases of $480,019 for the quarter and $373,363 for the nine months are due primarily to the cancellation of the WJA Note. For these same periods in 1996 and Company recorded $470,882 in interest income from this note. Approximately $58,000 in allocation income related to the operation of the Summer Jai-Alai Partnership in Miami is included in the nine moths results.


TAX LOSS CARRYFORWARDS

At December 31, 1996, the Company had approximately $11,752,000 in net operating loss carryforwards. However, because of IRC section 382 limitations due to the change of control that occurred in March, 1993, the bulk of these carryforwards are limited to approximately $95,000 per year. Operating losses of approximately $1,381,000 attributed to the period after the change of ownership are not subject to the Section 382 limitation.


SUMMARY OF OPERATIONS

The Company had a net loss of $1,711,975 or $0.32 per common share, for the three months ended September 30, 1997, compared to a net income of $125,526 or $.04 per common share for the three month period ended September 30, 1996. The Company had a net loss of $2,221,225 or $0.45 per common share, for the nine months ended September 30, 1997, compared to a net loss of $397,732 or $.12 per common share for the three month period ended September 30, 1996. The increased loss for the quarter and nine ended September 30, 1997 was primarily caused by the factors discussed above. The most dramatic being the business expansion due to the acquisition of the World Jai-Alai properties and costs associated with the card room introductions. The Company also recorded a non-recurring loan reserve totaling $322,193 related to an expired gaming contract with the Rincon Tribe of California.

The Company has expended approximately $2,628,000 for the period ended September 30, 1997 in capital improvements related primarily to the construction of Poker Room facilities at Miami and Tampa ($2.5 million).


LIQUIDITY AND CAPITAL RESOURCES

The balance of the Company's cash and cash equivalents at September 30, 1997 was $803,025. At September 30, 1997 the Company had a decrease in working capital of approximately $5,410,423 from December 31, 1996. The decrease was primarily the result of the construction and pre-opening costs associated with the card rooms in Tampa and Miami (approximately $2.5 million), growth in accounts payable (approximately $2 million), and a $4,411,000 increase in the current portion of long term debt maturing within one year ( primarily as the result of the Bank of Oklahoma's ("BOK") September 1998 balloon payment. The decrease in liquidity is also net of $4,130,000 in additional funds received in connection with Regulation D and Regulation S Convertible Preferred Stock and Bond offerings.

During the nine months ended September 30, 1997, net cash used by in the Company's operating activities was $ 239,139. The Company's continuing operating expenses consisted principally of office expenses, general and administrative expenses, and costs associated with Fronton operations. Principal revenues were from net pari-mutuel wagering commissions on live jai-alai and ITW events. The Company expects that net cash flows from the operation of current business activities will be adequate to meet operational needs.

During the nine months ended September 30, 1997, cash flow used by investing activities was $3,555,643. Of this $2,627,677 was the result of additions to plant and equipment, the bulk of which was attributable to card room construction. During the fourth quarter of 1995, the Company lent an affiliated company (Freedom Financial) funds on a demand secured credit line, which bears interest at the prime rate plus 2% (10.50%). Funds advanced during the nine months ended June 30, 1997 under this agreement totaled $927,966. As set forth on its Current Report on Form 8K dated September 24, 1997, and subsequent amendment filed October 10, 1997, Florida Gaming has agreed to purchase from Interstate Capital Corporation (a wholly owned subsidiary of Freedom Financial) certain unimproved properties and a residential real estate development called Tara Club Estates (collectively, the "Properties") situated in Loganville, Walton County, Georgia. As consideration for the purchase, Florida Gaming will pay Interstate the sum of $6,373,265 payable as follows (i) the issuance of 2,084 shares of proposed Series F 8% Convertible Preferred Stock (the "Series F Preferred Stock"), (ii) the assumption by Florida Gaming of $1,081,102 of first mortgage promissory notes to certain lenders secured by the Properties, and (iii) the cancellation of $3,208,163 including accrued interest owed by Freedom Financial under the secured credit line. Florida Gaming has received an opinion from an investment banker that the consideration for the Properties is fair, from a financial point of view, to the public stockholders of Florida Gaming. The Properties consist of a residential and commercial development of over 100 fully developed, and 150 partially developed single-family residential home sites, a swim and tennis club facility and 23 acres of commercial property. The company anticipates hiring a professional management company and that income generated from lot sales should augment cash flow given the large inventory of lots ready for sale.

During the nine months ended September 30, 1997, cash flow from financing activities was $3,690,280. Cash flow from financing activities consisted of approximately $2,930,646 in net funds generated from the sale of convertible preferred stock; and including $531,250 generated when Freedom Financial exercised options for 425,000 common shares. The company had a net reduction of $440,366 in borrowings for the nine months ended September 30, 1997. Subsequent to June 30, 1997, the Company raised another $1.2 million in funds via the sale of convertible debenture as described in its Current Report on Form 8K dated July 14, 1997.

The Company has terminated discussions the Rincon Luiseno Band of the Mission Indians in San Diego County, California. Due to adverse decisions in other Courts in related cases in California and the opinion issued by the U.S. Supreme Court in the Seminole case and continuing delays in the opening of the Rincon Casino with gaming machines, both Florida Gaming and the Rincon tribe have requested arbitration relative to the Company's Loan Agreement. The outstanding balance on the loan to the Rincon tribe and costs totaling $322,193 was reserved for during the third quarter.

Additional capital will be required for the recently announced expansion concerning the potential acquisition of a 200 room hotel and casino in Las Vegas, Nevada, as described in Exhibit 99.1 in Part II of the June 30, 1997, 10QSB. Although the Company is in the process of due diligence and no definitive agreement has been reached , the casino bank and purchase price could require a much as $18 million in cash. Florida Gaming is in the process of trying to obtain approval for a card room at its Ft. Pierce facility. The company also has substantial mortgage debt repayments of $5.8 million due over the next twelve months with $5.6 million of this due to the Bank of Oklahoma as described in the opening paragraph of this section.

In light of items described in the preceding paragraph the Company is currently evaluating sources of funding including long-term equity and debt financing, including discussions with investment banking firms. These include mortgage debt utilizing the values of the existing and recently acquired real estate (see Note 8 to the Financial Statements - Acquisition of WJA Assets), recently appraised at $25,000,000. On May 1, 1997 Freedom exercised 300,000 of its options for $375,000, on August 1, 1997 Freedom exercised options for an additional 25,000 shares ($31,250) and on August 21, 1997 Freedom exercised options for an additional 100,000 shares ($125,000). Additional equity funding may not be sold pursuant to the Securities Act of 1933 or in the U.S. absent registration or applicable exemption. The company anticipates using the proceeds of such funding to payoff the $1.2 million debenture issued in July on this year, make additional improvements to jai-alai and ITW facilities and to augment working capital. The company believes that its current financial condition provides adequate capital reserves and liquidity and that this will be enhanced by the upcoming seasonal increases in handles and revenues at the Miami and Tampa frontons.



--Sept. 25, 1997--Florida Gaming Corp.
(NASDAQ Small Cap:BETS) today announced that it has entered into a
definitive agreement with its upstream affiliate, Freedom Financial
Corp., to acquire Tara Club Estates, a residential real estate
development and unimproved commercial properties situated near
Atlanta in Loganville, Walton County, Ga.
          The aggregate purchase price of $6,526,000 payable by Florida
Gaming consists of the assumption of $1,081,000 of first mortgage
notes secured by the properties, the cancellation of $3,208,000 of
indebtedness owed to Florida Gaming by Freedom Financial Corp., and
the issuance of 2,237 shares of Florida Gaming's 8% convertible
preferred stock.
          The purchase was approved by a committee of the board of
directors of Florida Gaming Corp. who do not have a financial
interest in the transaction.  The closing of the purchase is
conditioned upon the receipt of an opinion from an investment
banking firm that the transaction is fair, from a financial point of
view, to the public stockholders of Florida Gaming, the receipt of
title opinions on the properties, and the approval of the two
lenders whose notes are secured by the properties.
          W. Bennett Collett, chairman of the board of Florida Gaming,
said, "The purchase of Tara Club Estates will increase Florida
Gaming's consolidated assets by approximately $3.3 million and its
total shareholders' equity by approximately $2.2 million.  He also
said that the transaction will increase the per-share book value and
is expected to increase per-share earnings on the common stock."
          Tara Club Estates is an upscale residential and commercial
development located (near Atlanta) in Loganville, Ga.  The Tara
property consists of over 100 fully developed and 150 partially
developed single-family residential home sites, a swim and tennis
club facility, and 23 acres of commercial property.  Forty-five
homesites have already been sold to builders.  The sites are
presently selling at an average in excess of $40,000 per site.
Thirty-nine homes have been constructed and sold at an average price
of $250,000 each.
          Florida Gaming Corp. is the largest Jai-Alai operator in the
world and the largest card room operator in the state of Florida.
Florida Gaming offers pari-mutuel wagering on live Jai-Alai games,
simulcast horse racing and dog racing at its four pari-mutuel
facilities - Miami, Tampa, Ft. Pierce and Ocala, Fla.  In addition
it operates 70 poker and domino tables at its recently opened
Crystal Card Rooms at Miami and Tampa.
      CONTACT:
      Florida Gaming Corp.
      W. Bennett Collett, 502/589-2000
      Fax:  812/945-7717
      Timothy L. Hensley, 305/633-6400
      Fax:  305/634-7013

For Immediate Release

FLORIDA GAMING CORPORATION ANNOUNCES SECOND QUARTER RESULTS

Miami, FL- August 12, 1997- Florida Gaming Corporation (NASDAQ-SMALL CAP- "BETS"), released today unaudited operating results for the second quarter and six months ended June 30, 1997. The Company had a Net Loss for the three months ended June 30, 1997 of $717,753 ($.15 per common share) compared to a Net Loss of $380,047 ($.11 per common share) for the three months ended June 30, 1996. Net loss for the six months ended June 30, 1997 was $509,250 ($.11 per common share), compared to net loss of $523,258 ($.16 per common share) for the same period ended June 30, 1996.

Operating Revenues for the three months ended June 30, 1997, increased 636% to $6,644,329 compared to $902,681 for the same period in 1996. Operating Revenues for the six months ended June 30, 1997, increased 468% to $14,330,245 compared to $2,522,305 for the same period in 1996.

Total Handle (money wagered) for the second quarter ended June 30,1997, increased 541% to $39,511,535 compared to $6,163,885 for the same period in 1996. The Total Handle for the six months ended June 30, 1997, was up 450% to $83,391,665 compared to $15,159,152 for the same period in 1996.

Although the Company experienced record handle and record operating revenues for the second quarter, total costs and expenses were unusually high-- resulting in a loss for the six-month period. The Company had non-recurring costs totaling approximately $155,000 related to the acquisition of the World Jai-Alai facilities. Other non-recurring costs and expenses totaling approximately $356,000 were primarily related to the training of over 200 dealers and supervisors needed for staffing the two new Crystal Card Rooms. Total marketing costs incurred for launching the card rooms exceeded $200,000. Both rooms were designed, constructed, and equipped during the six-month period ended June 30, 1997. The Tampa card room opened in late May and the Miami card room opened in late June. The total revenue for both card rooms for 21% of the available days during the second quarter was $99,649.

Florida Gaming Corporation is the largest Jai-Alai operator in the world and is now the largest Card Room operator in Florida. The Company has four Florida facilities located at Miami, Tampa, Ft. Pierce, and Ocala which contain an aggregate of 425,000 square feet of gaming space with over 10,000 gaming positions. The Company offers live Jai-Alai games and Inter-Track Wagering (ITW) via simulcasting of dog racing and horse racing. In addition, poker and dominoes are played at the Crystal Card Rooms at the Miami and Tampa facilities.

For information about Florida Gaming Corporation contact:

W. Bennett Collett, 502/589-2000
Fax: 812/945-7717

Timothy L. Hensley, 305/633-6400
Fax: 305/634-7013

Barretto Pacific Corp.
Landon Barretto, 206/583-8370


Thursday, August 7, 1997
9:51 AM EDT

Florida Gaming Corp. Announces Letter of Intent to Acquire Hotel and Casino in Las Vegas

Florida Gaming Corp. (NASDAQ Small Cap:BETS) today announced that it has signed a Letter of Intent with Flamingo Street, LLC to purchase the Bourbon Street Hotel and Casino located at 120 East Flamingo Road which is 1/2 block east of Las Vegas Boulevard (The Strip) and 2-1/2 miles from McCarran International Airport and the Las Vegas Convention Center.

The purchase price is $13,000,000 in cash, plus 200,000 shares of Florida Gaming Corp. stock valued at $7.50 per share.

The transaction is subject to a satisfactory due diligence by Florida Gaming Corp. and the execution of a Definitive Agreement between the parties.

Florida Gaming Corp. is the largest Jai-Alai operator in the world and the largest card room operator in the state of Florida. Florida Gaming offers pari-mutuel wagering on live Jai-Alai games, simulcast horse racing and dog racing at its four pari-mutuel facilities located at Miami, Tampa, Ft. Pierce and Ocala.

In addition, the company operates 70 poker and domino tables at its recently opened Crystal Card Rooms at Miami and Tampa.


Contact:

W. Bennett Collett, 502/589-2000
Fax: 812/945-7717

Timothy L. Hensley, 305/633-6400
Fax: 305/634-7013

Barretto Pacific Corp.
Landon Barretto, 206/583-8370


Tuesday, June 24, 1997

Florida Gaming Corporation Announces Largest Poker Operation in Florida

MIAMI--(BUSINESS WIRE)--June 24, 1997--Florida Gaming Corporation (NASDAQ:SMALL - news) announced today the opening of a second Crystal Card Room at its' Miami Jai-Alai and Inter-Track Wagering (ITW) facility in Miami.

The new Crystal Card Room contains about 16,000 sq. ft. of gaming space and will begin operation, initially, with 50 poker tables and 10 domino tables with a total of 420 gaming positions. The new card room is large enough to accommodate about 120 tables with 800 gaming positions.

W. Bennett Collett, Chairman of Florida Gaming, stated, ``Opening the new Crystal Card Room in Dade County (Miami) is a very significant positive event for Florida Gaming shareholders. Attendance and handle (money wagered) have been far above expectations for the Miami and Tampa locations since opening the card rooms. For the week ended June 21, 1997, the total handle, company wide, without poker, was $3,070,000, which is excellent for this time of the year.''

In May, 1996, the Florida State Legislature enacted House Bill 337, which authorized card rooms at all licensed pari-mutuels in Florida -- Jai Alai Frontons, Dog Tracks, and Horse Tracks. The card rooms are regulated by the State of Florida, Department of Business and Professional Regulation.

Florida Gaming Corporation is the largest Jai-Alai operator in the world and is now the largest Card Room operator in Florida. The Company has four Florida facilities located at Miami, Tampa, Ft. Pierce, and Ocala. All locations contain an aggregate of 425,000 square feet of gaming space with over 10,000 gaming positions. The Company offers live Jai-Alai games and Inter-Track Wagering (ITW) at all four locations. In addition, the company offers poker and dominoes at its' Crystal Card Rooms at Miami and Tampa.


Contact:
   Florida Gaming Corporation
   W. Bennett Collett, 502/589-2000
   Timothy L. Hensley, 305/633-6400
   or
   Barretto Pacific Corporation
   Landon Barretto, 206/583-8370

FOR IMMEDIATE RELEASE

FLORIDA GAMING CORPORATION OPENS LARGEST CARD ROOM IN FLORIDA

Miami, Florida, May 27, 1997.

Florida Gaming Corporation (NASDAQ Small Cap-"BETS") announced today the opening of The Crystal Card Room at its Tampa Jai-Alai and Inter-Track Wagering (ITW) facility in Tampa, Florida.

The new Crystal Card Room contains about 12,000 sq. ft. of gaming space and will begin operation, initially, with 40 poker tables with 300 gaming positions. The new room is large enough to accommodate about 80 tables with 500 gaming positions.

W. Bennett Collett, Chairman of Florida Gaming, states "In the past year we have visited dozens of card rooms in this country and abroad. In my opinion, the Crystal Card Room is the most beautiful card room in the world-- it is the epitome of elegance. We are looking forward to another substantial source of revenue for our shareholders."

In May, 1996, the Florida State Legislature enacted legislation (House Bill 337) which authorized card rooms at all licensed pari-mutuels in Florida-- Jai-Alai Frontons, Dog Tracks, and Horse Tracks. The card rooms are administered and regulated by the State of Florida, Department of Business and Professional Regulation.

Florida Gaming expects to open another Crystal Card Room at its Miami Jai-Alai facility before the end of June, 1997. The Crystal Card Room in Miami contains about 15,000 square feet of gaming space and will begin operations, initially, with 60 poker tables with 400 gaming positions. The Crystal Card Room at Miami can accommodate about 120 poker tables with 800 gaming positions.

Florida Gaming Corporation is the largest JAI-ALAI operator in the world with four facilities located at Miami, Tampa, Ft. Pierce, and Ocala, Florida. These four facilities contain an aggregate of 425,000 square feet of gaming space with over 10,000 gaming positions. The Company offers live Jai-Alai games and Inter-Track Wagering (ITW) at all locations, and Crystal Card Rooms at the Tampa and Miami facilities.


FOR IMMEDIATE RELEASE

FLORIDA GAMING ANNOUNCES RECORD HANDLE, REVENUES AND INCOME

Tampa, Fl. - April 16, 1997 - Florida Gaming Corporation (NASDAQ-SMALL CAP - "BETS"), released its unaudited first quarter results.

Total Handle (amount wagered) increased 388% to $43,880,000 for the period ended 3-31-97 compared to $8,996,000 for the same period in 1996. The $34,884,000 increase consisted of an increase of $26,300,000 in live Jai-Alai handle and $8,584,000 in ITW handle.

Operating Revenues for the quarter ended 3-31-97 increased $6,066,000 (374%) to $7,686,000 compared to $1,620,000 for the same period in 1996.

Net income for the quarter ended 3-31-97 was $208,503 or $.05 per share ($.03 per common share on a fully-diluted basis) compared to a Net Loss of $143,211 ($.04 per common share) for the same period in 1996.

These increases are due primarily to the expansion of pari-mutuel operations as the result of the previously announced acquisition of the World Jai-Alai operations in Florida.

Florida Gaming expects to open two Card Rooms in Miami and Tampa, Florida in May, 1997. The Card Rooms will have initially 100 poker tables with about 700 gaming positions.

Florida Gaming Corporation owns and operates Jai-Alai and Inter-Track Wagering Pari- Mutuel facilities in Miami, Tampa, Ocala and Ft.Pierce, Florida.



FLORIDA GAMING CORPORATION


CONSOLIDATED STATEMENT OF OPERATIONS


For three (3) months ended March 31, 1997 and March 31, 1996
For the Three Months Ended
March 31, 1997 March 31, 1996

HANDLE:

Jai-Alai $ 29,189,610 $ 2,870,125
Inter- Track Wagering (ITW) 14,690,520 6,126,142
Total Pari-Mutuel Handle 43,880,130 8,996,267

REVENUE:

On Site Mutuel Revenue, Net of
Pari-Mutuel taxes to State of Florida $4,878,415 $631,983
Inter Track Mutuel Commissions 1,366,829 606,750
Net Pari-Mutuel Revenue 6,245,244 1,238,733
Admissions Income 176,775 44,513
Program, Food,Beverage and Other 1,263,897 336,379
Total Operating Revenue $7,685,916 $1,619,625

COSTS AND EXPENSE:

Operating 5,134,468 1,381,307
General and Administrative 2,410,114 426,227
Total Costs and Expense 7,544,582 1,807,534
Net Income (Loss) From Operations $141,334 ($187,909)

OTHER INCOME (EXPENSES)

Interest and Dividend Income 67,169 44,698
Net Income (loss) $208,503 $(143,211)
Earnings (loss) per Common Share $ 0.05 $ (0.04)
Earnings (loss) per Common Share (fully diluted) $ 0.03 N/A
Weighted Avg. Common Shares Outstanding 4,458,166 3,199,518

Contact: W. Bennett Collett, Chairman, or

Timothy Hensley, CFO, (502) 589-2000 or (305) 633-6400