Castle Group,
gaming firm plan
hotel venture

By Russ Lynch
Star-Bulletin

A mainland company that conducts gambling and banking over the Internet said today it has signed a letter of intent to go into a South Pacific hotel venture with Hawaii-based Castle Group Inc.

The property is a resort in the Cook Islands, which the new investor, New Discoveries Publishing Corp., said will be worth $30 million when complete.

The plan calls for Nevada-based New Discoveries to be the majority owner and to pay for completing the project, which the companies said is 85 percent finished.

Castle would be a minority owner and manage the hotel, said Peter Michaels, chairman and chief executive officer of New Discoveries, which trades on the over-the-counter bulletin board.

Castle executives could not be reached for comment.

A recent financial disclosure by Castle said that in January the company leased the land below the under-construction luxury resort. Castle was in talks with a co-lessee that could bring in someone to finance the completion, said the report to the Securities and Exchange Commission.

If the talks succeeded, Castle would get a contract to manage the property, the filing said.

While the hotel is not directly connected with New Discoveries' casino on the Internet, www.netpirates.com, which started international credit card-based gaming last month, New Discoveries said it would be a good fit as an incentive to online casino customers.

"We need to send our casino players somewhere.We'll treat it like frequent-flier miles. Tourists will get more for their money than other vacation resorts," New Discoveries' Michaels said in a news release.

Michaels said the acquisition will help New Discoveries diversify into real estate in addition to its existing businesses, electronic commerce banking, providing software for Internet gaming, and operating the online casino. In his press statement, Michaels said New Discoveries is working with lenders to arrange funds to complete the resort and get it open.

Castle Group's financial statement said that its original lease on the Cook Islands property is conditional on finding a co-lessee to finish the project and if that isn't achieved the property owner could cancel Castle's lease.

Today's announcement of intent came only from New Discoveries and Castle had issued no statement as of late this morning.

New Discoveries was formed in 1993 and approved for public trading in September 1998.

Castle Group manages about 3,400 hotel rooms and resort condominium units. Most of them are in Hawaii but Castle also manages properties in Saipan, Guam and Chuuk in Micronesia and has an agreement to manage a property in New Zealand, still under construction.

New Discoveries describes the Cook Island resort as a 200-room luxury complex built on a 25-acre property, with lagoons in front of the rooms and the main dining areas. The Cook Islands are about 3,000 miles south of Hawaii and 2,000 miles northeast of New Zealand.