bwin Interactive Entertainment AG

--------------------------------------------------------------------------------   Disclosure announcement transmitted by euro adhoc.   The issuer is responsible for the content of this announcement. --------------------------------------------------------------------------------

03.02.2006

BETANDWIN.COM PRESENTS PREVIEW OF PRELIMINARY RESULTS FOR FINANCIAL YEAR NOW ENDED IN THE FORM OF SELECTED KEY FIGURES

: NOTES ON SELECTED PRELIMINARY KEY FIGURES  This report contains statements about possible future developments that have been made on the basis of information currently available. These statements reflect the present 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. The figures reported here are preliminary, and as yet unaudited, as the consolidated financial statements as of 31 December 2005 are still under preparation. There is therefore a possibility that some changes may have to be made following the audit.

For the sake of better clarity, the selected key figures are pro forma consolidated and reported at equity. In the full consolidation, all the assets and liabilities, revenues and expenses of a subsidiary are included in the consolidated financial statements, and group receivables and liabilities are eliminated along with intra-group revenues and intermediate profits. During capital consolidation, any value of the investment exceeding the market value of its assets less liabilities is reported as goodwill and amortized over the usual period. In "at equity" consolidation the prorated profit/loss of a subsidiary is shown in a line of the income statement (profit/loss from investments in associated companies) after deduction of amortization of the goodwill shown for the investment and other prorated intermediate profits. This increases or decreases the value of the investment accordingly. This method of consolidation - also referred to as single-line consolidation - generally produces the same consolidated result as full consolidation. Due the use of automated methods of calculation, rounding differences may occur in the totals of rounded amounts and percentages.

In order to ensure better comparability with other publicly listed companies, and in line with internationally established practice, with effect from Q3 2005 turnover from the casino, poker and games sectors has been shown only as net winnings (betting turnover less customer winnings).

: HIGHLIGHTS

Q4 2005 (SELECTED PRELIMINARY KEY FIGURES PRO FORMA CONSOLIDATED)
•          Record quarterly turnover of EUR 380 million, up 170%
•          Gross gaming revenues of around EUR 47.7 million, up 145%
•          Successful marketing activities: 467,000 active and 185,000 new active
sports betting customers
FINANCIAL YEAR 2005 (SELECTED PRELIMINARY KEY FIGURES PRO FORMA CONSOLIDATED)
•          Turnover from sports betting of EUR 1.1 billion, up 187%
•          Gross gaming revenues of EUR 144 million in 2005 almost trebled compared
to 2004
•          Customer base of 2.1 million, including over 1 million new customer
registrations; activation rate over 50%

ONGAME TRADING UPDATE (SELECTED PRELIMINARY KEY FIGURES) •          FY
2005: Gross gaming revenues of EUR 107,8 million, up 135% •          Q4
2005: 355,300 active and 126,810 new active "real money" players

LEGISLATIVE DEVELOPMENTS •          Germany: Verbal judgement in
proceedings instituted by Westlotto  •          Italy: Contested Finance
Act to be implemented

: DEVELOPMENT OF BUSINESS

Development of business in fourth quarter of 2005: Gaming turnover, gross gaming revenues, customer acquisition and activation, bets placed

In Q4 betandwin increased gaming turnover from its sports betting and casino operations, poker and games to EUR 379.9 million, an increase of 170%. Turnover from sports betting in Q4 2005 came to EUR 361.9 million, up 168%; this represented an increase of EUR 109.7 million, or 43%, compared to Q3 2005. Casino operations, poker and games generated turnover (equivalent to gross gaming revenues) of EUR 18.1 million, EUR 11.6 million of which was attributable to casino operations (up 140%), EUR 4.0 million to poker (up 780%), and EUR 2.4 million to games (up 410%).

In Q4 2005, gross gaming revenues (total gross gaming revenues from betting operations, casino, poker and games) totalled EUR 47.7 million, an increase of 145%. In Q4 2005 the company reported gross gaming revenues (betting turnover less customer winnings) from sports betting of EUR 29.6 million, up 116%. This was equivalent to a gross winnings margin of 8.2%.

A total of 356,623 new registrations were recorded during the course of Q4 2005, an increase of 206%. The number of active sports betting customers rose to 467,437 in Q4 2005, up 211%. There was also a significant rise in the number of new active sports betting customers, to 185,403, up 238%.  The number of bets placed rose to 44,891,345 in Q4 2005. This was equivalent to an increase of 156%.

Development of business in financial year 2005: Gaming turnover, gross gaming revenues, customer acquisition and activation, bets placed

Gaming turnover for the financial year 2005 amounted to EUR 1,135.0 million, up 189%. Sports betting generated turnover of EUR 1,085.9 million in FY 2005, an increase of 187%. In FY 2005 casino operations, poker and games generated turnover (equivalent to gross gaming revenues) of EUR 49.2 million, EUR 33.8 million of which was attributable to casino operations (up 164%), EUR 9.9 million to poker (first offered to customers at the end of Q3 2004), and EUR 5.5 million to games (up 380%).

In FY 2005, gross gaming revenues (total gross gaming revenues from betting operations, casino, poker and games) totalled EUR 144.0 million, an increase of 177%. This included revenues generated as a result of free betting or promotion bonuses designed principally to reactivate already registered customers who had become inactive, and accounted for around 6% of gross winnings in FY 2005.

In FY 2005 the company reported gross gaming revenues (betting turnover less customer winnings) from sports betting of EUR 94.8 million, up 152% at a gross winnings margin of 8.7%.

As of the reporting date of 31 December 2005, the company had nearly 2.1 million registered users: 1,037,556 new registrations were recorded during the financial year 2005, an increase of 179%. The successful implementation of the company's aggressive growth course was clearly reflected in 719,725 active and 544,178 new active sports betting customers for the financial year 2005 now ended. This was equivalent to increases of 177% and 201% respectively.  A total of 126,956,260 sports bets was recorded in the financial year 2005, an increase of 160%.

: INFORMATION ABOUT ONGAME  As reported on 16 December 2005, betandwin is to acquire 100% of the shares of Ongame e-solutions AB ("Ongame") subject to certain conditions precedent. The transaction should be concluded in the first four months of the current financial year as planned, provided the conditions specified in the share purchase agreement - such as approval by the betandwin Supervisory Board and successful financing of the purchase price - are met.

According to the share purchase agreement the basis for the total consideration is defined as gross gaming revenues less prizes and bonuses. One of the closing conditions was a minimum of EUR 88.2 million of gross gaming revenues less prizes and bonuses using a predefined EUR/USD exchange rate of 1.1907.

The total consideration payable for 100% of Ongame will be calculated using the contractually agreed multiple of 5.37 times of Ongame’s gross gaming revenues less prices and bonuses. Based on preliminary gross gaming revenues less prizes and bonuses for 2005 of approximately EUR 95 million the total consideration payable is expected to amount to approximately EUR 510 million; the final consideration will be determined following the availability of Ongame’s audited financial statements for  2005.

SELECTED PRELIMINARY KEY FIGURES  Ongame is one of the top three in the online poker industry worldwide. The company’s business model is based on the one hand on a business-to-consumer approach ("B2C") with its primary transaction platforms PokerRoom.com, HoldemPoker.com and EuroPoker.com, and on the other on a business-to-business ("B2B") poker network with the customers of member companies such as Coral/Eurobet or Betsson.

In Q4 2005 Ongame reported gross gaming revenues of EUR 33.9 million, an increase of 103%. Of this amount, EUR 31.7 million, or 93.4%, was accounted for by gross gaming revenues on the B2C sector, and EUR 2.2 million, or 6.6%, on the B2B sector. For the full financial year 2005 Ongame’s gross gaming revenues increased by 135% to EUR 107.8 million.

Ongame’s customer base is made up of the company’s own customers on the one hand, and customers of the Ongame partner network on the other. Ongame had a total of 355,300 active customers ("real money") in Q4 (247,260 of them the company’s own customers, and 108,040 network customers). Using the same definition as betandwin an active customer is a customer who placed at least one bet in the reporting period.

Of a total of 126,810 new active customers ("real money") in Q4 2005, 67,816 were the company’s own customers; 58,994 new active customers were recorded in the partner network, predominately deriving from the addition of Coral/Eurobet during Q4 2005. Ongame had a total of 353,284 new active customers ("real money") in FY 2005 (238,780 of them the company’s own customers, and 114,504 network customers). A new active customer is defined as a customer being active the first time within the reporting period.

: LEGISLATIVE DEVELOPMENTS Germany: verbal judgement in the case of Westlotto vs. BAW International Ltd.  On 1 September 2004, Westlotto, the state games of chance monopoly in Nordrhein-Westfahlen, instituted legal proceedings against Gibraltar-based BAW International Ltd., applying for an injunction against BAW International Ltd. to prevent it from offering and/or advertising games of chance and/or sports betting on the platform www.betandwin.com in Germany, and to desist from using the terms Supertoto and Supertoto XXL. In its defence, betandwin dealt extensively with the Gambelli judgement passed down by the ECJ, and with the advertising tactics of German betting providers in general and the advertising behaviour of Westlotto in particular. Westlotto had also instituted similar proceedings against other providers.

At the first instance, the Regional Court of Cologne passed down its verbal judgement on 2 February 2006, and its written judgement is expected to be delivered in the next few days. In its judgement, the Regional Court of Cologne forbade BAW International Ltd. via its platform www.betandwin.com and all the other betting providers concerned to offer and/or advertise games of chance and/or sports betting in Germany, to refrain from using the terms Supertoto and Supertoto XXL and requested BAW International Ltd. to disclose gaming turnover achieved in the region of Nordrhein-Westfahlen. betandwin is of the opinion that the relevant German laws are not in conformity with EU legislation. It therefore intends to appeal against this judgement, and will go through all the instances of appeal if necessary. Should betandwin incur any kind of financial loss whatsoever as a result of this judgement, the company reserves the right to claim damages from Westlotto.

Verdict of German Federal Constitutional Court probably delayed till April The verdict of the Federal Constitutional Court dealing with the lawfulness of the German gaming and betting monopoly will probably only be passed in April. From betandwin’s point of view, this verdict will be of significance in view of the fact that, in April 2005, the constitutional court questioned the conformity of German law with European law, ruling as follows: "However, the more difficult it becomes to predict criminal liability, the less justification there is for arguing solely for implementation in the public interest. This may be the case if the applicability of an act is questionable, for considerations of EU legislation, for example. In such a situation, in order for legislation to provide effective safeguards for fundamental rights, it is necessary to specify concrete risks to the public good over and above criminal liability."

Italy: contested Finance Act to be implemented Despite significant misgivings at both national and EU level about its conformity with existing EU legislation, on 23 December 2005 the Italian parliament approved a law establishing considerable barriers to foreign gaming providers wishing to access the Italian market. betandwin believes, the law infringes the fundamental EU right of the freedom of movement of people and services, and came into force on 1 January 2006 without the EU Commission being notified as required by Transparency Directive 98/34/EC.

In view of the fact that the Italian government has infringed existing EU legislation on several occasions recently, betandwin has taken the precaution of adding an Italian sports betting licence to its existing licence coverage.  In the autumn of 2005, BetandWin Italia S.r.l., a 100-per-cent owned subsidiary of BETandWIN.com Interactive Entertainment AG therefore acquired an Italian sports betting licence. BetandWin Italia S.r.l. also holds a provider’s licence entitling the company to broker bets between betting shops and the licenser, the Italian Ministry of Finance / Amministrazione autonoma dei monopoli di Stato (AAMS) in Rome.

However, this should not hide the fact that betandwin strongly advocates a regulated and liberalized European market for games of chance. betandwin is strongly against protectionist measures aimed at slowing down the process of European liberalization, such as are vehemently pursued by some European member states. To this extent, betandwin - in conjunction with other members of the European Betting Association - will be taking action against the Italian Finance Act at both national and EU level.

SELECTED KEY FIGURES

In order to ensure better comparability with other publicly listed companies, and in line with internationally established practice, with effect from Q3 2005 turnover from the casino, poker and games sectors has been shown only as net winnings (betting turnover less customer winnings).

Further Details: http://www.betandwin.ag/media/pdf/quartals_berichte/ pre_quartalsbericht_q4_2005_en.pdf

end of announcement                                                 euro adhoc 03.02.2006 08:00:00
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ots Originaltext: BETandWIN.com Interactive Entertainment AG
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Press:
Karin Klein
Corporate Communications
BETandWIN.com
Interactive Entertainment AG
Börsegasse 11/Top floor, A-1010
Vienna Phone: +43-1-585 60 44-2200
mailto:press@betandwin.com
http://www.betandwin.ag

Investors:
Konrad Sveceny
Investor Relations
BETandWIN.com
Interactive Entertainment AG
Börsegasse 11/Top floor, A-1010
Vienna Phone: +43-1-585 60 44-2208
mailto:investorrelations@betandwin.ag
http://www.betandwin.ag

Branche: Casinos & Gambling
ISIN:      AT0000767553
WKN:        936172
Index:    ATX, Prime.market
Börsen:  Wiener Börse AG / official dealing