BETSSON CUTS FREEBIES BUT BOOSTS RETURNS

24 August 2007

Second quarter report shows declines in active players but better revenues

Swedish public company Betsson has published its interim second quarter report for the period January 1 – June 30, 2007 showing an increase in the traditionally weak quarter of 147 percent in net sales at SEK 155.7million - up from SEK 63 million on the same period last year. Operating profit increased to SEK 47.2 (-12.8) million, an improvement on the loss of SEK -12.8 million last year.

Group president Pontus Lindwall revealed that Betsson.com launched its French-language site in the quarter, and flagged a new dividend policy that will see up to 75 percent of the company’s income after taxes distributed to shareholders.

Betsson's net sales increased by 134 percent to SEK 311.7 million, with operating income up at SEK 92.7 million (2006 -14.3 million).

The Group’s income after taxes for the remaining operations amounted to SEK 85.1 million (2006 -11.6 million), or SEK 2.15 (-0.30) per share.

Marketing and freebies to new customer expenses have been reduced in favour of better offers to existing customers and product
development.

The report reveals that Turkish legislation against online gaming has complicated Betsson’s participation in that market, and that consequently the gaming volume from Turkey has declined significantly from the end of last quarter.

Lindwall reported an active business environment following the period covered, with Italian, Spanish and Greek language sites launched in a market where Betsson's products are enjoying strong growth, augering well with increased gaming revenues for the Q3 results.

Looking ahead, Lindwall said that Betsson will widen its product offering to include new gaming products, some unique and some already established in the market. At the same time, Betsson has launched in several new geographical markets. The goal is to
grow both organically and through acquisitions in these new markets, he said.

Betsson shares were upgraded to the Mid Cap list on the OMX Nordic Exhange in Stockholm recently.

The group boasted 774 000 registered customers, an increase of 13 percent compared to Q1 2007, at the end of Q2 2007. However the number of active customers decreased during the quarter by 25 percent to 94 500, but is still better off in this category than the same period last year by some 57 percent.

The decreases in active players was mainly noticed in the sportsbook and betting exchange operations (40 percent) followed by casino activities (36 percent decrease) and poker room activity (6 percent decrease).

The average number of Betsson employees during the period was 99 (62 in 2006) for the Group. At the end of the period, there were 108 (2006: 75) employees.

The company develops and operates online gambling venues directed toward end consumers through the websites Betsson.com, CasinoEuro.com, and CherryCasino.com and offers poker, casino gaming, sports betting, lottery, betting exchange, and bingo to primarily customers from Scandinavia and Europe. Its Net Entertainment subsidiary develops gaming software and provides turnkey services to online gambling operators.

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