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Does Beneficial Holdings, Inc. (PINKSHEETS: BFHJ) Have What it Takes to Thrive in International Gaming Industry?

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After Beneficial Holdings, Inc. (PINKSHEETS: BFHJ) experienced massive trading volume on Wednesday and Thursday things have slowed down considerably for the international casino holding company but they have still seen more than 50 million shares move hands while climbing to a high of 0.0004 following yesterday’s close of 0.0002. That being said, it’s difficult to say that the activity surrounding BFHJ has anything to do with their business operations as been nearly two weeks since their last press release and that release was rather noncommittal in itself.

BFHJ announced on March 19, 2012 that that they intend to apply for a Nevada Intrastate Gaming License which they said would enable them, partnered with a licensed casino operator, to offer certain online games to residents of Nevada. They then stated “With a license under Nevada Regulation 5A, the Company may be able to offer non-gaming hotels access to the online casino in customer rooms in Nevada for people want to play the offered games.” This gives the impression that a lot of things need to go in BFHJ’s favor for this endeavor to really happen.

In the meantime BFHJ’s revenue is coming from a bar and casino they own in Managua, Nicaragua, a slot parlor in Masaya, Nicaragua, and a joint venture in Ticuantepe, Nicaragua as well as a pair of Internet domains that provide online live dealer casinos for non-U.S. residents. While gambling can generate significant revenue in Latin America, Nicaragua is not considered one of the most prolific gambling countries, standing well behind countries like Brazil, Costa Rica, Chile, Mexico, Argentina, Venezuela, Peru and Colombia.

Back in February BFHJ announced that through its Nicaraguan subsidiary, Grupo Beneficial, they would be applying for a new 20 year gaming license in Nicaragua following new regulations passed by the Nicaraguan Parliament that would stabilize the industry. BFHJ said the licenses would enable their affiliates to acquire locations throughout Nicaragua with relative ease and promote “rapid growth and additional locations in the second and third quarter of 2012.

What should be noted by investors is that BFHJ stated they would be making the application for this 20 year gaming license no later than March 31, 2012 yet they haven’t distributed a press release announcing the submission. Obviously this should cause some concern given the fact that the company’s revenue appears to be tied almost exclusively to Nicaragua.

Looking back at BFHJ’s most recent press release one may question what kind of opportunities exists for the company in Nevada. While the gaming industry remains a big draw in the state it has taken a significant hit over the past several years due to the economic climate. To think that BFHJ will step in and actually start producing meaningful revenue seems a bit naïve as they would be facing incredible competition as well as strict regulations if they were granted a license.

There is also the matter of the terms of their partnership with that licensed casino operator that they mentioned. Just how beneficial this agreement would be for shareholders of BFHJ is unknown as the company hasn’t disclosed much on the subject.

With so many unanswered questions still present it would be hard to consider BFHJ’s future as bright and the uncertainty about their gaming license in Nicaragua represents a serious risk to their operations.

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