The shock news that Fairground Holdings is to terminate business as a result
of having to abandon US-facing online gambling activities arrived as the
week ended, a sad close to a brief but promising business future for the
agglomerator. In a public announcement Fairground reports that it is
voluntarily winding up its affairs following the need to halt US-facing
online gambling activities in the wake of the enactment of the Unlawful
Internet Gambling Enforcement Act. Before taking this drastic course, the
directors of Fairground Gaming focused on finding ways of maximising
shareholder value and in doing so has considered a wide range of alternative
strategies. The board has now unanimously agreed that the best way forward
is to dispose of its gaming operations and infrastructure, notably the Spin
Palace group of online casino and poker venues, says the announcement. The
company has therefore entered into an agreement, conditional on shareholder
approval, to dispose of The Spin Palace Group in its entirety to Seahouses
Holdings Limited, the original owner and seller of the business, and a major
shareholder in the company. The main features of the proposed transaction
are a total selling price of GBP 11 095 000 satisfied by a cash payment of
GBP 5 090 000 and a complicated rearrangement of shares already held within
Fairground by the buyer. Once completed, these arrangements will enable
Seahouses to acquire The Spin Palace Group with all liabilities including
player balances, all leases and the group’s obligations to all employees.

The Executive Directors of Fairground Gaming will not remain with the
operations which are being disposed of, but in any case Seahouses has
advised the Fairground that it has no intention to operate the business of
the Spin Palace Group in the United States.

The deal must be approved by Fairground shareholders, and to this end an
Extraordinary General Meeting is to be held on December 11 this year.

Effective from the date of the announcement, announcement, Fairground has
received irrevocable undertakings to vote in favour of the sale resolutions
from shareholders representing approximately 9.7 percent of shareholders
eligible to vote.

Fairground intends to liquidate Fairground Gaming and to distribute the cash
balance to the remaining non-Seahouses shareholders, who in aggregate will
hold 28 626 324 ordinary shares in the company, as a return of capital.
Once the sale has gone through Fairground expects that it will be left with
approximately GBP 6 160 000 in cash after providing for winding-up costs and
fees related to the sale.

It is estimated that this will yield approximately 21.5p per ordinary share
in the company and it is expected that this liquidation distribution will
take place by the end of February 2007. This payment would represent a
premium of approximately 68 percent to the average weighted price of an
ordinary share in the company from the period of 13 October 2006 when the
Unlawful Internet Gambling Enforcement Act was signed into law to 16
November 2006 being the latest practicable date prior to the date of this
announcement.

Commenting on developments, Evan Hoff, CEO of Fairground Gaming said: “The
closure of our US-facing activity and the impact of that legislation on the
listed company environment continues to be deeply felt, with our business
now only marginally profitable. Accordingly, in the interests of maximising
value for our shareholders, we believe it is in the best interests of all
our shareholders to accept this offer for The Spin Palace Group and for the
Company to proceed along the lines announced today.”