World Gaming plc Delivers Profitable Fourth Quarter

Business Wire, Feb 28, 2002

Business Editors

LONDON--(BUSINESS WIRE)--Feb. 28, 2002

World Gaming plc (OTCBB:WGMGY) today posted its first profitable quarter for the three-month period ending December 31, 2001. The Company also released preliminary results for its eight-month period ending December 31, 2001. (For additional notes to the financial statements please refer to the Company's 6-K filing with the U. S. Securities and Exchange Commission for the periods ended September 30, 2001. Note that the Company has changed its fiscal year end to December 31 from April 30, which results in the eight-month stub period. All amounts are in U.S. dollars.)

Total revenues for the fourth quarter were $6.6 million compared to $6.4 million for the same period last year, representing an increase of 1.9 per cent. Net income for the quarter ending December 31, 2001, after including one-time redomiciling costs of $438 thousand ($81 thousand in 2000), was $536 thousand or $0.02 per share compared to a net loss of $199 thousand or $0.01 per share for the corresponding period last year -- representing a $735 thousand increase. Excluding the one time redomiciling costs, net income for the fourth quarter was $974 thousand or $0.03 per share.

It was recently determined that redomiciling costs, previously capitalized, should be expensed in accordance with U.S. GAAP. According to FASB SOP 98-5, these expenses should be charged against income as incurred. This resulted in the Company expensing $438 thousand in redomiciling costs, which included $142 thousand that had been capitalized prior to the fourth quarter.

For the eight-month period ending December 31, 2001, revenues were $12.1 million compared to $14.1 million for the same period last year, representing a decrease of 14.0 per cent. Net loss for the period after redomiciling costs was $2.2 million or $0.07 per share compared to a net loss of $2.7 million or $0.08 per share last year.

"The fourth quarter results demonstrate our ability to deliver on our commitments to shareholders despite industry challenges like payment processing," said Mike Aymong, Chief Executive Officer of World Gaming. "Bringing sustained profitability to the Company has been a major focus since the new management team assumed control. While we are not finished yet, we are optimistic that we have reached a turning point and are now well positioned to continue delivering profitable growth."

Gross margins rose from 76 per cent to 89 per cent in the quarter, an increase of 13 percent, and from 72 per cent to 81 per cent for the eight-month period, an increase of 9 per cent, respectively from the prior year, reflecting a more profitable revenue mix.

Operating expenses excluding redomiciling costs decreased 5.0 per cent during the fourth quarter and fell 9.8 per cent over the eight-month period. This is the result of a significant reduction in operating costs and marketing outlays. World Gaming expects continued improvements in these areas over the course of fiscal 2002.

"We are pleased to have met projections set out in our guidance in November 2001 after adjusting for redomiciling costs," said Rodney Davis, Chief Financial Officer and acting Chief Operating Officer. "At the same time, we have committed substantial resources toward improving back office infrastructure, customer capture rates, minimizing down time and sourcing alternative payment methods."

The Internet Gaming industry continues to be very attractive for World Gaming, with high barriers to entry. World Gaming offers a comprehensive suite of gaming products and provides its customers with a complete turnkey solution in sportsbook, casino and pari-mutuel. In 2002 World Gaming will expand its offering by launching its products in a variety of new languages and currencies to take advantage of the industry's rapid growth.

About World Gaming plc

World Gaming plc is a pioneer and leader in I-gaming software and e-commerce technologies. World Gaming is an international developer, licensor and provider of online gaming products, including casino, sports book and pari-mutuel betting. For more information about World Gaming, visit the company's Web site at www.worldgaming.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing, evaluation and deployment of products, fraud occasioned upon licensees of World Gaming, regulation of the online gaming industry, and other risks detailed from time to time in World Gaming's filings with the Securities & Exchange Commission. We assume no responsibility for the accuracy and completeness of these statements and are under no duty to update any of the forward-looking statements contained herein to conform these statements to actual results. This is not an offer to sell or a solicitation of an offer to purchase any securities.