Worldgaming News 2005

[Cabo]

WORLD GAMING plc ANNOUNCES FULL YEAR TRADING STATEMENT

LONDON , UK , February 16, 2005 - World Gaming plc. (OTC BB: WGMGY), a UK-based Internet-gaming software and e-business services group of companies (the Group), is pleased to announce a trading statement in respect of its year ended December 31, 2004.

The Company expects earnings before interest, depreciation and extraordinary gains of between $6.0m and $6.5m (2003: $4.5m) equating to basic earnings per ordinary share of between 18 and 20 cents per ordinary share for the year ended December 31, 2004.

During the fourth quarter of 2004, the Company completed a transaction with its then major licensee, Sportingbet plc, the full details of which were disclosed to Shareholders and voted upon at the Company's 2004 Annual General Meeting. Under the terms of the transaction the Company received certain consideration for enabling Sportingbet to acquire an interest in the Company's software for a period agreed under the terms of the transaction. In the fourth quarter of 2004 and for the full year to December 31, 2004, this transaction has resulted in an extraordinary one time gain expected to be in the region of $12.0m – 12.3m after charging associated costs. Therefore, the Company expects net profit after interest, depreciation and extraordinary items relating to the Sportingbet transaction of between $17.0m and $18.0m for the year ended December 31, 2004.

As discussed in the Company's SEC filing in respect of the 3rd quarter of 2004, effective October 1st, 2004 as a result of the transaction with Sportingbet, the Company no longer receives royalty fees from Sportingbet. However, it also no longer has the costs associated with the entire development group and is receiving hosting revenues equal to Sportingbet's usage percentage of the Company's hosting facilities with a 10% mark-up (estimated to be $2.5 million in the twelve months following the date of the transaction).

Fourth quarter royalty revenues from continuing licensees on a like-for-like basis (excluding Sportingbet) have grown approximately 28% when compared to the same period last year. Like-for-like operating costs after taking into account the hosting cost recovery have reduced approximately 66% despite one-off professional and other costs incurred in the quarter.

Basic earnings per share for the purpose of this announcement has been calculated with reference to approximately 32.4m shares. It should be noted that as a result of the transaction described above, shares previously held by Sportingbet plc of approximately 13.5m have no voting or economic rights all of which in aggregate can be acquired by the company for $1 at which time it has positive retained earnings to do so and have therefore been excluded.

The Company is pleased to report that the first quarter of 2005 has to date met with management's expectations and growth trends experienced in the fourth quarter of 2004 are continuing in 2005. In addition, the Company continues to make progress with the strategies outlined at its 2004 Annual General Meeting. In this regard, the Company expects to update shareholders over the coming weeks with progress in respect of its listing on the Alternative Investment Market (AIM) of the London Stock Exchange.

[Boni]

WORLD GAMING plc TO PROCEED WITH AIM LISTING, APPOINTS NOMINATED ADVISOR

LONDON , UK , March 01, 2005 World Gaming plc (OTC BB: WGMGY), is pleased to announce the appointment of a nominated advisor for its proposed listing on the Alternative Investment Market (“AIM”) of the London Stock Exchange.

As discussed with Shareholders at the Company's Annual General Meeting and subsequent Company announcements, an integral part of the Company's strategic direction is to list the Company's trading shares on a more stable and liquid trading platform. It is expected that a trading platform such as AIM will enable the Company to further its acquisition strategies, enhancing earnings for the Company and returning greater Shareholder value.

Accordingly, the Board of World Gaming is pleased to announce the appointment of Daniel Stewart & Co., a London based Investment bank, for the purposes of admitting the Company's shares to AIM. In addition, it is anticipated that additional capital may be raised through a limited placement of the Company's ordinary shares at the time of listing on AIM. The Board will therefore likely ask shareholders for approval of the raising of such additional capital in a circular to be sent to Shareholders. It is expected that these shares would be placed with institutional holders to create a more stable market for the Company's securities and establish a presence on AIM. The Board believes this new relationship with Daniel Stewart will also provide the Company with ongoing corporate financial advice and brokerage services.

The Company intends to maintain its listing on the OTC.BB market. It is expected that existing Shareholders will have the opportunity to trade on either the OTC.BB market or the AIM market on admission of the Company's shares. Shareholders will be updated in full on the mechanisms by which their shares may be tradable prior to the effective date of the AIM listing.

The current timetable for the proposed listing of the Company's shares on AIM is the second quarter of 2005.

[Boni]

WORLD GAMING plc BOARD APPOINTMENTS
London, UK, March 14, 2005 - World Gaming plc (OTC BB: WGMGY), is pleased to announce the appointment of Mr. Michael R. Cumming and Mr. Jonathan C. Moss to the Company’s Board of Directors effective March 1, 2005.

In strengthening the depth and breadth of experience amongst the Board, Mr. Cumming has been appointed as a non-executive director. Mr. Cumming has over 35 years of experience in the field of Private Equity. Mr. Cumming’s experience includes 14 years as the Managing Director of Barclays Private Equity which he expanded from a London base into a company with nine offices worldwide. He is currently Chairman of a number of fund management and venture fund companies, both private and public. His qualifications include an MBA from the Stanford Graduate School of Business Administration, Palo Alto, California.

The Company recognises that strength in management is critical as it enters a new phase of growth in realising its strategic direction as described to Shareholders. One of those strategies that the Board continues to exploit is a flexible licensing model targeting both existing e-gaming companies and new white-label partners. The Company is therefore delighted with the appointment of Mr. Moss, who was appointed as Sales and Marketing Director in January of 2005. Mr. Moss previously held the position of Business Development Director at WagerLogic Limited, the licensing and services subsidiary of CryptoLogic Inc., where he was responsible for attracting brand-name clients to CryptoLogic's casino and poker solutions including Betfair, Littlewoods Gaming, The Ritz Club of London and ukbetting plc.

Commenting on the appointments, CEO Mr. Daniel Moran said:
“The Company’s ability to attract strong candidates to its Board of Directors is testament to the soundness of the Company’s strategic direction. I am delighted that Mr. Moss and Mr. Cumming are joining the Board; their participation will be invaluable as we enter our next stage of growth.”

[Casinonews]

WORLD GAMING plc ANNOUNCES LICENSEE UPDATE
London, UK, April 6, 2005 - World Gaming plc (OTC BB: WGMGY), is pleased to announce the addition of two new licensees together with a 5 year contract extension for one of its existing licensees.

The Company has signed two new licensees for its sports betting and casino solution. While these licensees are new entrants as operators, each has significant experience in direct and affiliate marketing within the online gaming industry. The Company does not expect any material revenues from these licensees until the commencement of the winter sports season.

In addition, the Company has signed a 5 year contract extension with one of its major licensees.

Commenting on the licensee update, CEO Mr. Daniel Moran said:

“Consistent with the Board's stated strategies of pursuing new licensees I am pleased that our sales and marketing efforts have begun to yield results. In addition, I am delighted that we have extended and solidified our relationship with one of our largest licensees.”

[Casinonews]

WORLD GAMING plc EXTRAORDINARY GENERAL MEETING STATEMENT

London, UK, April 8, 2005 - World Gaming plc (OTC BB: WGMGY), held its Extraordinary General Meeting on Thursday, 7 April 2005 at 10:00 a.m. at the offices of Reed Smith, 5 Montague Close, London, UK.

The Board of World Gaming announces that all resolutions proposed at the Company's Extraordinary General Meeting held on 7 April 2005 were approved by the shareholders by a majority in excess of 90 percent.

[Casinonews]

WORLD GAMING plc REPORTS RESULTS FOR THE YEAR ENDED DECEMBER 31, 2004

LONDON, UK, May 3, 2005 - World Gaming plc (OTC BB: WGMGY), a UK-based Internet-gaming software and e-business services group of companies (“the Company”), is pleased to report financial and operating results for the year ended December 31, 2004.

Highlights
Profit from operations for the year of $5,183,000 vs. $2,127,000 for the same period last year.
Royalty revenue from continuing licensees (excluding Sportingbet) up 41% percent in 2004 compared to prior year.
Operating expenses down 31% in 2004 compared to prior year.
Completion of Joint Venture transaction with Sportingbet resulting in extraordinary gain of $12,187,000 in 2004 and further minimum $16,000,000 committed development spend.
Net working capital of $14,866,000 at December 31, 2004 vs. ($126,000) at December 31, 2003.
Nil debt at December 31, 2004 vs. $2,944,000 at December 31, 2003.
Phased software re-architecture project expected completion mid-2005.
Company admission to AIM of the London Stock Exchange expected May 2005.
Fiscal results
Net income from operations for the year ended December 31, 2004 was $5,183,000 or $0.16 per participating ordinary share compared to net income from operations of $2,127,000 or $0.05 per participating ordinary share last year. Participating ordinary shares exclude the 13.6m shares effectively cancelled as a result of the transaction with Sportingbet as described to Shareholders in earlier announcements.

Revenue from continuing licensees (excluding Sportingbet) grew 41.0% during the year ended December 31, 2004 when compared to the year ended December 31, 2003. This organic growth made a significant contribution to the total royalty revenue in the year of $15,227,000 compared to royalty revenue of $15,856,000 in 2003. The overall decline in royalty revenue of 4.0% in the year was a result of the transaction with Sportingbet, where effective October 1, 2004, the Company no longer receives royalty revenues from this customer.

Gross wagering volumes on the Company's servers increased 63% during the year ended December 31, 2004 to $6.2 billion when compared to $3.8 billion in the prior year. Growth in wagering volume from continuing licensees (excluding Sportingbet) was 73% in the year.

Subsequent to the end of the year, growth in revenues from continuing licensees has continued to exceed the growth levels of 2004.

Total revenues for the year ended December 31, 2004 were $16,288,000 compared to $17,698,000 for the year ended December 31, 2003. Excluding revenues from transaction processing and hosting fees described below, this represented a 4.3% decline in revenues for the year. This decline is directly attributable to the cancellation of Sportingbet royalties in the fourth quarter of 2004 as a result of the Joint Venture transaction previously disclosed.

In February 2004 the Company closed its transaction processing and customer service divisions, migrating licensees that utilized these services to an industry leading supplier. For comparative purposes, $1,765,000 of transaction processing fee revenue was included in total revenues for the year ended December 31, 2003 compared to $423,000 in the year ended December 31,2004. Direct costs associated with these divisions exceeded fee revenue in every quarter up to the date of its closure.

Effective October 1, 2004 Sportingbet now pays the Company for its usage of the Company's hosting facility. The payment is on a cost plus 10% basis and amounted to revenue of $621,000 in the year compared to $nil in 2003.

The gross margin for the year was 88.5% compared to 87.9% for the year ended December 31,2003. The increase resulted in a more profitable revenue mix due to the closure of the transaction processing and customer service divisions in February 2004 and the recovery of hosting fees attributable to Sportingbet for continuing to host their data on the Company's servers.

As consideration for no longer paying the Company royalties, Sportingbet paid total cash consideration of $10m ($3m received on completion, $3m received on March 1, 2005 and $4m is due by November 1, 2005), cancelled its $900,000 convertible debt with the Company and effectively cancelled its interest in 29.6% of the Company's equity giving rise to an extraordinary gain in the year of $12,187,000. In addition, Sportingbet is committed to spending a minimum of $16,000,000 on development over a four year period commencing October 1, 2004 and will pay a further $3,000,000 if the Joint Venture arrangement is terminated. The Company retains its right to the most up-to-date version of the software throughout the term of the Joint Venture arrangement or at such time as it may be terminated.

- Operating expenses decreased 31.2% to $9,234,000 during the year ended December 31, 2004 compared to $13,421,000 for the same period last year. The primary contributors to this reduction were:

- The removal of development costs effective October 1, 2004 as a result of the transaction with Sportingbet. These costs were approximately $1.1m per quarter;

- Depreciation charges declined $513,000 or 26% when compared to the same period last year;

- An 18.8% reduction in other corporate overhead or a reduction of $1,914,000, when compared to the same period last year.

Selected statement of operations information (unaudited, in thousands)




Operational update
The Company remains committed to delivering a comprehensive and robust product suite to its licensees. Development during the first two quarters of the Joint Venture arrangement with Sportingbet have concentrated on a re-architecture of the Company's software expected to be phased in from mid-2005. This re-architecture will allow greater flexibility in product offerings to new licensees and greater ease for ‘plug-in' of new products. A single integrated player account will remain across the entire product suite. In addition, modularity across the Company's product suite will mean more flexible and efficient development efforts.

Consistent with the Board's strategies, the Company is continuing with its licensing efforts, is proceeding with listing the Company's shares on The Alternative Investment Market (AIM) of the London Stock Exchange and exploring business opportunities through acquisition.

In April 2005, the Company announced that two new licensees had been signed together with a five year extension to one of its largest licensees' license agreements. Due to confidentiality arrangements, the Company is unable to specifically refer to these licensees; however, the new licensees have significant experience in the on-line gaming sector. The Company expects that they will participate in the significant growth in wagering volumes that the Company's existing licensees are experiencing and will begin to return material revenues during the US winter sports season of 2005/2006.

Consistent with the Board's stated timetable, the completion date for admission to trading the Company's shares on AIM is expected to be May, 2005. The Board believes that the key benefit of trading the Company's shares on AIM would be demonstrated through execution of its strategy to potentially acquire operators or other related businesses within the industry. An AIM listing is expected to give the Company the opportunity to raise capital through institutional investment in the Company's shares together with the ability to use shares traded on the AIM as currency for its acquisitive strategy. It is expected that existing ADR holders will continue to trade their shares on the OTC.BB market; however, they would be invited to transfer their shares to the AIM market should they wish to do so. It is expected that existing ADR holders will receive an explanatory memorandum in this regard prior to admission of the Company to AIM.

Daniel Moran, World Gaming's CEO commented:

"The Company is profitable, debt free and has strong cash reserves. Together with the listing on AIM we believe the Company is well positioned to successfully execute our strategies. We have a proven management team that is highly motivated in taking the Company to the next stage of development. I am delighted with the progress made in 2004 which is demonstrated by results, both financial and strategic."

[Casinonews]

WORLD GAMING plc ANNOUNCES ADMISSION DATE TO AIM

London, UK, May 6, 2005 - World Gaming plc (OTC BB: WGMGY), a UK-based Internet-gaming software and e-business services group of companies ("the Company"), is pleased to announce its expected admission to trading its shares on the Alternative Investment Market ("AIM") of the London Stock Exchange commencing May 17, 2005.

Upon completion of an institutional offering, the Company has agreed a placing price of 52.5 pence per share on the placing of pnds stlg 2.5m worth of new ordinary shares with such institutional investors upon admission to AIM.

The Board believes that the key benefit of trading the Company's shares on AIM will be demonstrated through execution of its strategy to potentially find and acquire operators or other related businesses within the industry. The impending AIM listing has given the Company the opportunity to raise capital through institutional investment in the Company's shares together with the ability in the future to strategically use shares traded on the AIM as currency for its acquisitive strategy. It is expected that existing ADR holders will continue to trade their shares on the OTC.BB market; however, they will be invited to transfer their shares to the AIM market should they wish to do so. Existing ADR holders will receive an explanatory memorandum in this regard prior to admission of the Company to AIM.

[Casinonews]

WORLD GAMING PLC ANNOUNCES FIRST DAY OF DEALINGS ON AIM

London, UK, May 17, 2005 - World Gaming PLC (WGP.L, WGMGY.OB), an internet Gaming Software provider (the "Company" or "Group") offering a comprehensive suite of products and services for internet gaming Operators, is pleased to announce today the commencement of trading on AIM under the symbol WGP. The Company has raised a total of pnds stlg 2,499,000 at 52.5 pence (US$1.00) per share. Daniel Stewart & Company plc is acting as Nominated Adviser and Broker.

Placing Statistics

Issue Price: 52.5p;
Number of new Ordinary Shares being placed: 4,760,000;
Gross proceeds of the Placing receivable by the Company: pnds stlg 2,499,000;
Net proceeds of the Placing receivable by the Company: pnds stlg 2,029,000;
Proportion of the Enlarged Share Capital represented by the Placing Shares: 13 per cent.;
Number of Ordinary Shares in issue at Admission: 37,985,203; and
Market capitalisation at Admission at the Issue Price: pnds stlg 19,262,632.

The Business
World Gaming is an internet Gaming Software provider offering a comprehensive suite of products and services for internet gaming Operators and white-label partners. World Gaming offers a wide range of integrated online gaming solutions including sportsbook, racing, casino and poker, supported by comprehensive e-commerce, customer service and back-office management systems.

Through its wholly-owned subsidiaries, the Group licenses the Gaming Software and provides a complete package of related services for which it charges a royalty and other fees to Operators.

Prior to October 2004, the Gaming Software was owned and developed solely by the Group through its wholly-owned subsidiaries. A joint venture agreement with Sportingbet Plc ("Sportingbet") was entered into in October 2004, pursuant to which the Gaming Software was transferred to an equally owned exempt liability partnership with Sportingbet.

The Gaming Software is an established and reliable product which provides internet gaming Operators with a user-friendly, fully integrated, high quality interactive platform. World Gaming, through its wholly-owned subsidiaries, can provide flexible offering for Operators, varying from full service white-label solutions to simply providing software and hosting. Such flexible solutions enable the Group to reach a wider spectrum of on-line Operators and meet their customised on-line gaming site requirements.

The Gaming Software, supplemented in certain cases by integrated third party products, provides a suite of software to allow Operators to design, operate and manage on-line gaming websites. The full suite covers sports betting, horse racing, casino, virtual games and on-line poker. The Group sublicenses virtual games to enhance its casino offering and also sublicenses an on-line poker product from a supplier who has a specialist product in that area.

The Directors believe that few rival providers offer such a comprehensive suite of integrated products. World Gaming currently licenses the gaming Software to eleven Operators. The Group is now actively seeking to add further quality licensees and white-label partners.

In May 2001, ADRs representing Ordinary Shares of World Gaming began quotation on the OTC Bulletin Board. The OTC Bulletin Board is a quotation service for over-the-counter securities operated by NASDAQ, although such securities are not actually listed on The NASDAQ Stock Market.

Results For The Year to December 2004
After a reorganisation of the Group's operations in the year, turnover of $16.288m (2003: $17.698) was achieved, resulting in an operating profit of $5.080m (2003: $2.330m). After exceptional items of $12.187m in respect of a transaction with Sportingbet in the year, profit before tax grew to $17.370m (2003: $3.108m).

Corporate Strategy
The Directors believe that the Group's current Management has been successful in reorganising and turning around a business which, despite valuable assets, relationships and market position, had been experiencing difficulties. The Directors believe that the Group now has strong relationships with its Licensees and suppliers, an attractive product offering and a strong financial and operational base from which to exploit further growth opportunities in its core software licensing model. In addition, the Group has strong cash reserves and a positive cash flow. Accordingly, the Directors will continue to examine business opportunities and potential corporate transactions which they believe will broaden as well as increase revenue streams, enhance shareholder value and reduce risk in the business.

Amendment
The number of shares being applied for is 37,985,203 rather than 37,585,203, as disclosed in the Admission document published on 12 May. This is due to the exercise of 400,000 options, on both 15 and 25 April 2005.

Accordingly, the number of Options outstanding prior to the Placing is 10,088,433, rather than the 10,488,433 as disclosed in the Prospectus.

The Board
The Group's strong Board brings with it a wealth of experience in both the internet gaming sector and senior management.

The Directors of the Company are:

James Grossman, Non-Executive Chairman

James is an attorney with experience in the international business, corporate, and venture capital areas.

Daniel Moran, Chief Executive Officer

Daniel has over 15 years of international business experience, primarily in the technology and Internet sectors. Most recently, he was the Managing Director for Sportingbet Australia.

David Naismith, Chief Financial Officer

David is a qualified chartered accountant with several years experience in Internet gaming in various jurisdictions, most recently holding a senior finance role with Sportingbet.

Jon Moss, Sales and Marketing Director

Jon has 8 years senior management experience in the e-gaming sector. Immediately prior to his appointment at World Gaming, Jon held the position of Business Development Director at WagerLogic Limited, the licensing and services subsidiary of CryptoLogic Inc., one of the industry's leading e-gaming software providers.

Clare Roberts, Non Executive Director

Mr Roberts has served as a Director of the Company since 18 October 2000 and was Chairman of the Board from 20 November 2002 to 11 April 2003.

Michael Cumming, Non Executive Director

Michael has over 35 years of experience in the field of Private Equity. He is currently Chairman of Mercia Fund Management, Matrix Venture Fund VCT PLC, Private & Commercial Finance Group PLC and UK Smaller Companies Tracker Trust PLC

Commenting on today's listing, Daniel Moran, Chief Executive Officer: "We are delighted to have listed on AIM today. Given the current strength of the online gambling market, we believe that our UK listing will offer a great opportunity to continue the development of the Company. We are delighted to welcome our UK institutional shareholders and look forward to driving the Company forward and providing exceptional value for shareholders."

Additional Information
World Gaming's Ordinary Shares are traded on the London Stock Exchange, Alternative Investment Market ("AIM") under the symbol WGP and the Over The Counter Bulletin Board market in the U.S. under symbol WGMGY.

The Ordinary Shares for the purposes of this release have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold in the United States or to a U.S. person (as such term is defined in Regulations S under the Securities Act) absent registration or an applicable exemption from registration under the Securities Act.

Corporate background
World Gaming PLC is a UK-based I-gaming software and e-business services company. The Company is an international licensor, and provider of online gaming products, including casino, sportsbook, and pari-mutuel betting. For more information about World Gaming PLC, visit the Company's Web site at www.worldgamingplc.co.uk.

Interactive Systems Inc, a wholly-owned subsidiary of the Group incorporated and operating out of Antigua , licenses its gaming software to third parties for an initial licensing fee and monthly royalties. Alea Software Inc., in participation with World Gaming PLC, develops gaming software and web pages.

Contact:
Investor Relations
World Gaming plc
investor.relations@worldgaming.com

[Casinonews]

WORLD GAMING PLC ANNOUNCES FILING OF 20-F ANNUAL REPORT

London, UK, May 25, 2005 - World Gaming plc (OTC BB: WGMGY, LSE: WGP), a UK-based Internet-gaming
software and e-business services group of companies ("the Company"), is pleased to announce that it yesterday filed its 20-F Annual Report with the Securities and Exchange Commission.
The report can be viewed at www.sec.gov under symbol 'wgmgy'.

[Casinonews]

WORLD GAMING PLC REPORTS FIRST QUARTER 2005 RESULTS

London, UK, June 1, 2005 World Gaming plc (LSE: WGP, OTC BB: WGMGY), a UK-based Internet-gaming software and e-business services group of companies ("the Company"), is pleased to report financial and operating results for the quarter ended March 31, 2005.

Highlights
Like-for-like growth in royalty revenue from continuing licensees of 54% in the quarter ended March 31, 2005 when compared to the same period last year;
Wagering volume on the Company's servers at $2.0 billion for the quarter ended March 31, 2005, up from $1.4 billion for the same period last year;
First quarter results have met or exceeded management's expectations on key indicators;
The Company signed two new licensees in the first quarter of 2005;
Successful placing and admission to AIM on May 17, 2005;
Further Poker launches to licensees scheduled for the second quarter of 2005.
Fiscal results
Like-for-like revenue from continuing licensees (excluding Sportingbet) grew 54.1% during the quarter ended March 31, 2005 when compared to the quarter ended March 31, 2004. Total revenues for the quarter ended 31 March 2005 decreased by 50.9% or $2,729,000 to $2,635,000 compared to $5,364,000 for the same period last year. The decrease in total revenue is wholly attributable to the transaction with Sportingbet which was effective as of October 1, 2004 where in return for certain consideration and other arrangements, the Company no longer charges royalties to Sportingbet for use of the Software ("Sportingbet Transaction").

Key financial aspects of the Sportingbet Transaction for comparative purposes are as follows:
The Company no longer charges royalties to Sportingbet, representing 68% of total revenue for the quarter ended March 31, 2004;
The Company charges Sportingbet hosting fees on a cost plus 10% basis for its share of usage of the Company's hosting facilities which generated revenues of $635,000 in the quarter ended March 31, 2005;
All development costs previously incurred by the Company are paid by Sportingbet which equalled approximately $1.2m of costs for the quarter ended March 31, 2004;
The Company received certain cash and other consideration under the Sportingbet Transaction as previously disclosed.
Net income from operations for the quarter ended March 31, 2005 was $836,000 or $0.03 per participating ordinary share compared to net income from operations of $1,989,000 or $0.04 per participating ordinary share last year. Participating ordinary shares for the quarter ended March 31, 2005 exclude the 13.5m shares effectively cancelled as a result of the transaction with Sportingbet described above.

Gross wagering volumes on the Company's servers increased 42.9% during the quarter ended March 31, 2005 to $2.0 billion when compared to $1.4 billion for the same period last year. Growth in wagering volume from continuing licensees (excluding Sportingbet) was 70.3% in the quarter.

Effective October 1, 2004 Sportingbet now pays the Company for its usage of the Company's hosting facility. The payment is on a cost plus 10% basis and amounted to revenue of $635,000 in the quarter ended March 31, 2005 compared to $nil for the same period last year.

In February 2004, the Company closed its transaction processing and customer service divisions migrating licensees that utilized these services to a third party supplier. For comparative purposes, $423,000 of transaction processing fee revenue was included in total revenues for the quarter ended March 31, 2004 compared to $nil in the quarter ended March 31, 2005. Direct costs associated with this division exceeded fee revenue in every quarter up to the date of its closure.

The gross margin for the quarter ended March 31, 2005 was 71.1% compared to 90.7% for the same period last year. The decrease is primarily the result of a change in accounting policy as of January 1, 2005 to treat all hosting costs as direct costs of sales. In the quarter ended March 31, 2004, such direct costs only consisted of certain hosting costs and direct costs associated with transaction processing. On a like-for-like basis, approximately an additional $400,000 would have been re-allocated from operating costs and included in hosting costs for the quarter ended March 31, 2004.

Operating expenses including interest and depreciation decreased 64.1% to $1,039,000 during the quarter ended March 31, 2005 compared to $2,890,000 for the same period last year.

The decrease occurred primarily due to the following:
Development costs being funded by Sportingbet as result of the Transaction described below, effective October 1, 2004. On a like-for-like basis this represented approximately $1.2m of operating costs in the quarter ended March 31, 2004;
Re-allocation of all hosting costs to direct cost of sales. On a like-for-like basis, this attributed to approximately $400,000 of operating costs in the quarter ended March 31, 2005; and
Depreciation charges during the quarter ended March 31, 2005 declined $208,000 or 52.4% when compared to the same period last year.
In summary, for the quarter ended March 31, 2005 compared to the same quarter last year, net profit decreased by 58.0%, primarily due to a 59.5% decrease in royalty revenues as a result of the Sportingbet Transaction. However, with associated reductions in operating expenses and recovery of direct costs, operating profit margin for the Company on the basis of royalty revenue has increased 4.5% to 41.8% compared to 40% in the quarter ended March 31, 2004. Management believes that this demonstrates the highly scalable nature of the business.
Selected statement of operations information (unaudited, in thousands)

For the three months
ended March 31,
2005 2004
--------------------

Net Sales $ 2,635 $ 5,364
Gross Profit 1,874 4,865
Operating Expenses 1,039 2,890
Net Income 836 1,989

Operational update
During the quarter ended March 31, 2005, management spent significant time establishing the Company's listing on the Alternative Investment Market ("AIM") of the London Stock Exchange. The Company was admitted to trading during the second quarter on May 17, 2005 raising pnds stlg 2,499,000 from the private placement of 4,760,000 ordinary shares.
The Board sees this as a critical step in the Company's future strategic direction in addition to offering existing shareholders greater value through a more stable trading platform. It is expected that the Company's listing on AIM will assist in meeting its strategic direction, in particular, completion of corporate transactions that will enhance shareholder value.

In the first quarter of 2005 the Company signed two new licensees. These licensees have significant experience in the on-line gaming industry and it is expected that they will begin to contribute material revenues in the final quarter of 2005.

The Company continues to roll out its third-party supplied multi-player poker solution to its licensees. One of the Company's largest licensees has commenced going live in the second quarter of 2005.

Through the second quarter of 2005 the Company will continue to complete planned hardware and software upgrades for the busy winter sports season commencing in the third quarter. Software upgrades will be completed through Alea Software Ltd.

Outlook
The Company enters the new financial year well placed to build upon its successes in 2004. The development of the worldwide industry of online gaming continues to replicate similar growth experienced since its inception. Strong organic growth continues to be exploited by operators and their suppliers.
The Board remains confident that the Company has the business model to share in this growth through both its licensing model and acquisitive strategy during the forthcoming year.

Seasonality of the business means that the second quarter is generally the slowest trading quarter for the Company. It appears likely that while the growth from licensee revenue in first quarter of 2005 will continue, the percentage increase in such revenues for the second quarter of 2005 compared to the same period last year may be less pronounced. The Board is confident that it can utilise this time to perform necessary software and infrastructure upgrades for its licensees in preparation for the busy winter sports season commencing in the third quarter.

Daniel Moran, World Gaming's CEO commented:

"The Company enters the new financial year well placed to build upon its successes in 2004. The development of the worldwide industry of online gaming continues to grow at the same rates since inception. Strong organic growth continues to be exploited by many operators and their suppliers."

"The Board remains confident that the Company has the business model to share in this growth through both its licensing model and acquisitive strategy during the forthcoming year. We look to the future with confidence."