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bwin Interactive Entertainment AG, Vienna (Austria)

bwin Interactive Entertainment AG (“bwin”), which is listed on the Vienna Stock Exchange, is the leading provider of online gaming entertainment worldwide.

Under licenses issued in Gibraltar, Canada, Belize and Germany, Italy, Mexico, Austria, the United Kingdom and Argentina, bwin operates platforms for sports betting, , games, soft and skill games, as well as audio and video streams of major sporting events, like the games of the German Bundesliga, through its subsidiaries and associated companies.

In the first quarter of 2007, bwin generated gross gaming revenues (sum total of gross gaming revenues from betting operations, , and games) of EUR 89.4 million. The number of active customers totalled 729,000 in Q1 2007, an improvement of 10.7 per cent compared to the first quarter of the previous year, excluding business in the US.

Strategic orientation
In Q1 of 2007, bwin has finally reached the goal it set itself in 2004 - for the first time bwin is the number 1 worldwide both in terms of the number of active customers and in terms of gross and net gaming revenues.

Continuously changing legal regulations make it necessary to adapt the Company’s strategy. The Company changed its strategic approach with effect from the beginning of Q4 2006 in reaction to the legislative developments in the USA and in view of the resistance being mounted by the monopolies in several European countries. A year earlier than originally planned, bwin’s aggressive growth strategy has been readjusted in favour of profit and cash flow generation.

In order to achieve these goals, bwin intends:

1.to concentrate on the core products sports betting and

2.to focus principally on established markets in Europe

3.to encourage a responsible approach to games of chance and promote corporate social responsibility in the gaming industry

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Products

bwinoffers not only one of the largest gaming portfolios on the Internet today, but also the most innovative. As a true pioneer, bwin was the first to simplify betting and payment methods for customers, and to integrate them into an intuitive interface. While constantly expanding its range of online gaming products, bwin makes sure that customers continue to enjoy the safest and securest online entertainment there is.

In terms of sports betting, regionalisation efforts will continue to tailor the product offering to the tastes of individual markets, and to live up to ever-increasing individual customer expectations.

On the Live Betting side, bwin will add to the already extensive number of events offered. Introducing improvements to the site’s usability to enhance the user experience, by adding entertainment features such as a larger screen and improved chat functionalities, will round out the site’s appeal, especially to first-time visitors.

Previously targeted mainly at the US market,Room will become more international, with the planned addition of new currency and language options, capitalizing on the booming European market and the large liquidity provided by the Ongame network.

The Company continues to be convinced of the potential for mobile gaming, and is continually increasing its mobile games. Planned upgrades to the software as well as additional SkillGames and SoftGames will complete the bwin Group’s online gaming entertainment offer, living up to the Company’s goal to be a “House of Games”, with sports, fun and entertainment in all areas of gaming.

Focus principally on established markets in Europe

bwin is focusing on the EU and EFTA region as well as on markets in which both licensing and taxation aspects are clearly regulated. Concentrating on core markets does not preclude the development of new markets, regional expansion is merely pursued less aggressively. Nonetheless, the Company most recently obtained an Argentinian license and, once developed, will start to operate a marketable product soon.

Brand building and sponsoring

The Company is currently establishing one of the leading online gaming brands worldwide. The investment that has already been made in building the brand has resulted in comparatively high brand awareness for bwin in its core markets, compared to its competitors. At the beginning of 2007, investment in establishing and promoting the brand by means of sports sponsoring and above-the-line activities was therefore scaled down.

Among the key factors for bwin’s comparatively high brand awareness are numeroussponsorship agreements with renowned partnerslike AC Milan and Juventus Turin (Italy), FC Barcelona (Spain), Dinamo Zagreb (Croatia), FC Slovan Liberec (Czech Republic) and Club Brugge K.V. (Belgium). In addition, bwinis title sponsor of the Portuguese soccer league, which has been operating as “bwinLIGA” since August 2005.

Sport marketing rights

bwin has procured the exclusive rights to market the 1st and 2nd German Bundesliga (DFL) internationally on a worldwide scale up until and including 2008/2009. The rights also comprise the exploitation of all international television as well as online and mobile media channels. This way, bwin makes use of its rights to the 1st and 2nd Bundesliga to broadcast the games worldwide by means of live streaming through its online platform www.bwin.com.

Protecting persons under age
Persons under age are excluded from using the gaming offer. Detailed information must be provided during registration, which is then verified prior to paying out winnings by requesting the user to present pertinent official documents. This obligation also helps to prevent any attempts at money laundering since the identity of a user is verified before any transaction is carried out.

Protecting against betting fraud
In order to prevent betting fraud, as in the Hoyzer case in Germany, the ESSA (European Sports Security Agency) was co-founded by bwin in cooperation with the European Gaming and Betting Association (EGBA), which, thanks to its extensive databases, is in a position to determine at an early stage whether events can be manipulated and passes on this information to sports organisations promptly and without any bureaucratic formalities.

Preventing problematic gaming behaviour
Taking into account the specificities of the Internet, bwin together with the Harvard Medical School and in cooperation with the Cambridge Health Alliance has set up a research project which aims to develop a comprehensive package of measures seeking to prevent gaming addiction. Using information from empirical studies should make it possible to detect behavioural patterns early on and to take appropriate steps quickly in each individual case. On its website, bwin also offers advice and tips on how to prevent problematic gaming behaviour as well as contact points for addiction counselling. On an individual basis, the inpayments, which are initially limited to a max. of EUR 5,000 in 30 days by the Company, can be reduced even further. As part of its responsible gaming strategy, the Company carries out customers’ requests to restore previously reduced limits up to the standard maximum pay-in limit with a delay of three days. For bwin, the protection of players is and continues to be a matter of course.