bwin Interactive Entertainment AG

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03.05.2005

: NOTES In compliance with the requirements of the Prime Market of the Vienna Stock Exchange and beginning with the quarterly report for Q1 2003, BETandWIN.com Interactive Entertainment AG is publishing more detailed information including a complete, unaudited consolidated balance sheet, a consolidated income statement, a consolidated cash flow statement, and a consolidated statement of changes in shareholders’ equity. This policy aims to significantly improve the quality and transparency of the Group’s interim periodical financial reports. To ensure improved comparability with previous periods, selected key figures for betandwin are published in a pro forma consolidated form and also using the "at equity" method. However, the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, and consolidated statement of changes in shareholders’ equity are only presented using the "at equity" method.

This report contains statements about possible future developments that have been made on the basis of the information available. These statements reflect the current opinion of the Executive Board with respect to such future events, and should not be taken as a guarantee of future performance, since they entail risks and uncertainties that are difficult to predict. For many different reasons, actual events or circumstances may differ significantly from the assumptions made for such statements.

:HIGHLIGHTS Q1 2005 (PRO FORMA CONSOLIDATED) • Record quarterly turnover of EUR 437 million, up 220% • Record gross gaming revenues of EUR 24.7 million, up 167% • Despite significant rise in growth rates, positive EBITDA of EUR 2.4 million down 9% • 225,048 active sports betting customers, up 214% • Liquid assets of over EUR 35 million as of 31 March 2005, up 5% :DEVELOPMENT OF BUSINESS IN FIRST QUARTER OF 2005 • Record quarterly turnover of EUR 437 million, up 220% betandwin increased turnover from its betting and casino operations as well as games to EUR 436.507 million after a turnover of EUR 136.321 million in the same period the previous year. (Note: Due to the addition of further games to the games portfolio in November 2004, with effect from Q4/2004 reporting the former product area of Lottery Games with options such as bingo is now shown under "Games".) This represents a rise in turnover of EUR 300.186 million, or 220.2%.

Turnover from betting operations more then trebled compared to the same period the previous year, totalling EUR 196.828 million, a rise of EUR 138.390 million, or 236.8% (Q1 2004: EUR 58.438 million). Record turnover was once again achieved with both casino operations and the product area of "Games*". Turnover from casino operations amounted to EUR 230.518 million (Q1 2004: EUR 76.599 million, up EUR 153.919 million, or 200.9%), whilst turnover in the product area of Games* totalled EUR 9.161 million, up more than sevenfold (Q1 2004: EUR 1.284 million, up EUR 7.877 million, or 613.5%). (*) Due to the addition of further games to the games portfolio in November 2004, with effect from Q4 reporting the former product area of Lottery Games with options such as bingo is now shown under "Games".

• Record gross gaming revenues of EUR 24.7 million, up 167%

In the first quarter of 2005, gross gaming revenues from betting and casino operations and games* as well as poker totalled EUR 24.687 (Q1 2004: EUR 9.261 million, up EUR 15.426 million, or 166.6%).

Gross winnings from betting operations in the first quarter of 2005 of EUR 16.775 million were significantly above the previous year’s figure of EUR 7.193 million. This represented an increase of EUR 9.582 million, or 133.2%. Gross winnings from casino operations rose to EUR 6.022 million (Q1 2004: EUR 1.983 million, up EUR 4.039 million, or 203.7%). Gross winnings from the Games* sector of EUR 0.750 million were considerable up on the same period the previous year (Q1 2004: EUR 0.085 million, up EUR 0.665 million, or 782.4%). Poker revenues of EUR 1.140 million (reported under other gaming revenues) were generated by the multi-player poker application "Poker Lounge". This application has been online on select platforms since the third quarter of 2004. Due to the difficulty of comparing betting turnover generated by the product poker with that from other product groups, in line with international convention only net revenues are reported.

In the first quarter, total gaming revenues, gross winnings from betting and casino operations and games as well as poker after deduction of betting charges and third-party commission in the amount of EUR 1.744 million (Q1 2004: EUR 0.548 million) amounted to EUR 22.943 million (Q1 2004: EUR 8.713 million, up EUR 14.230 million, or 163.3%).

The gross winnings margin from betting and casino operations and Games* was 5.4% (Q1 2004: 6.8%). The gross winnings margin from betting operations was 8.5% (Q1 2004: 12.3%). A lower gross winnings margin from betting operations in the period under review was attributable to bets going in customers’ favour, particularly during the month of March, but this indicator recovered significantly in the following month of April. betandwin management expects to be able to achieve margins of around 10% again in the year 2005.

At 2.6%, the gross winnings margin from casino operations remained virtually unchanged compared to the same period the previous year. A gross winnings margin of 8.2% was reported for the Games* sector (Q1 2004: 6.6%).

The net winnings margin after commission and taxes from betting and casino operations and Games* for the first quarter of 2005 was 5.0% (Q1 2004: 6.4%). Revenues totalled EUR 23.882 million (Q1 2004: EUR 9.665 million, up EUR 14.217 million, or 147.1%). Apart from the above-mentioned gaming revenues, they also include revenues from billing of payment charges and capitalized in-house services.

Marketing expenses were increased significantly in the first quarter of 2005 in order to further accelerate the company’s rate of growth. Apart from traditional on- and offline marketing activities, the company invested increasingly in sponsorships of leading international sportsmen and major international sporting events.

The focus of betandwin’s communications during the last quarter was on events such as the Nordic and Alpine Skiing World Championships in Oberstdorf / Germany and Bormio / Italy, the World Handball Championships in Tunisia and the "Moto GP" motorcycling grand prix world championships.

The company entered into sponsoring agreements with the Redbull Formula 1 racing team, for instance, and the French national handball team, as well as the Nordic skiing aces Martin Schmitt and Martin Höllwart, and Alois Vogl, the specialist in technical Alpine skiing events.

Against this background, expenses for personnel, marketing and other expenses rose in line with budget to EUR 21.439 million (Q1 2004: EUR 6.992 million, a rise of EUR 14.447 million, or 206.6%). Of this amount, marketing expenses in the first quarter of 2005 totalled EUR 13.237 million as against EUR 2.677 million in the comparable period the previous year, an increase of EUR 10.560 million, or 394.5%.

Personnel expenses accounted for EUR 3.026 million (Q1 2004: EUR 1.930 million, up EUR 1.096 million, or 56.8%). In line with betandwin’s need for qualified staff, the number of employees rose by 87, an increase commensurate with the company’s present growth course. As at the reporting date of 31 March 2005, the company employed 246 people, including freelancers (31 March 2004: 159 employees). Due to the accelerated growth that is already becoming apparent, further staff will be taken on board during the course of the year, mainly for customer service, payment transactions, product management and regional "country" managers. On the one hand, this will ensure that the present high standard of service is not only maintained, but also improved, and on the other it will make it possible to step up marketing activities in several additional continental European markets that have as yet not been tapped.

Other expenses include expenses for bank charges, IT services, external odds calculation, consulting and investor relations, and increased to EUR 5.176 million (Q1 2004: EUR 2.384 million, up EUR 2.792 million, or 117.1%). These increases were mainly directly attributable to a rise in expenses directly proportional to the expanding volume of business. Bank charges are an example, up EUR 1.254 million, or 214.7%, from EUR 0.584 million in the first quarter of 2004 to EUR 1.838 million. In line with the company’s proclaimed growth strategy, rental and leasing expenses as well as licences also rose by EUR 0.564 million, or 131.8%, from EUR 0.428 million in the fourth quarter of 2004 to EUR 0.992 million, whilst material expenses totalled EUR 0.908 million (Q1 2004: EUR 0.525 million, up EUR 0.383 million, or 73.0%).

• Despite significant rise in growth rates, positive EBITDA of EUR 2.4 million down 9%

Despite a rise in marketing expenses, betandwin reported positive EBITDA of EUR 2.443 million for the first quarter (Q1 2004: EUR 2.673 million, down EUR 0.230 million, or 8.6%).

EBIT amounted to EUR 1.330 million (Q1 2004: EUR 1.426 million, down EUR 0.096 million, or 6.8%). betandwin reported a quarterly profit before tax of EUR 1.321 million (Q1 2004: EUR 1.867 million, down EUR 0.546 million, or 29.3%).

After deduction of income taxes and taking minority interests into account, consolidated earnings after tax amounted to EUR 0.160 million (Q1 2004: EUR 0.745 million, down EUR 0.585 million, or 78.6%). (Minority interests relate to third-party shares in connection with past investments / betandwin e.K. and acquisitions / Playit.com Ltd., beteurope.com.).

• 225,048 active sports betting customers, up 214%

A record total of 200,071 new registrations were generated in the period under review. The number of active sports betting customers totalled 225,048, of which 103,683 became active for the first time (Q1 2004: 60,472 new registrations, including newly registered customers as well as customer migration as a result of two acquisitions, and 71,762 active sports betting customers, 24,554 of whom activated their accounts for the first time; this included 2,522 customers migrated as a result of acquisitions). The number of closed bets also rose to 24,047,366 (Q1 2004: 8,997,483), an increase of 167.3%. · Liquid assets of over EUR 35 million as of 31 March 2005 up 5%

Liquid assets including short-term securities totalled EUR 35.334 million as of 31 March 2005, as compared to EUR 33.513 million as of 31 December 2004 (up EUR 1.821 million, or 5.4%).

:OUTLOOK

In the next few quarters, betandwin intends to take advantage of the marketing opportunities arising in continental Europe as a result of the ongoing deregulation discussion of the European gaming market. As a result, the company expects to achieve a correspondingly high growth rate in the next few quarters. It is important to understand, however, that revenue-earning potential of newly acquired customers will be mainly realized during the course of subsequent quarters. For example, the targets for customer revenue activities and new customer acquisition were again significantly exceeded in April 2005.

Further Details: http://www.betandwin.ag/media/pdf/quartals_berichte/ad_hoc_quartal_03052005_uk.pdf

end of announcement                                euro adhoc 03.05.2005 14:27:21
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Further inquiry note: Karin Klein Corporate Communications BETandWIN.com Interactive Entertainment AG Babenbergerstrasse 9/17, A-1010 Vienna Phone: +43-1-585 60 44-260 mailto:investorrelations@betandwin.com http://www.betandwin.ag

Branche: Casinos & Gambling
ISIN:      AT0000767553
WKN:        76755
Index:    ATX, Prime.market
Börsen:  Wiener Börse AG / official dealing