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01.03.2006 - euroadhoc / Börse / stock market / quarterly or semiannual financial statement / quaterly report
euro adhoc: BETandWIN.com Interactive Entertainment AG / quarterly or semiannual financial statement / Q4 & FINANCIAL YEAR 2005 (E)=

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01.03.2006
THIS AD-HOC PRESS RELEASE MAY NOT BE DISTRIBUTED TO OR WITHIN THE USA, CANADA,
JAPAN OR AUSTRALIA
Q4 & FINANCIAL YEAR 2005
: NOTES
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.
For the sake of better clarity, the selected key figures are both 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. In capital
consolidation, any value of an investment exceeding the market value of its
assets less liabilities is recognized as goodwill. In "at equity" consolidation
the prorated profit/loss of a subsidiary is shown in a line of the income
statement 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. 
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, games and poker sectors has been shown only as gross
gaming revenues (betting turnover less customer winnings). 
Due the use of automated methods of calculation, rounding differences may occur
in the totals of rounded amounts and percentages.
: HIGHLIGHTS
: Q4 2005
(PRO FORMA CONSOLIDATED)
"       Gross gaming revenues of EUR 47.7 million, up 145%
"       EBITDA of EUR 6.7 million, up 49%
"       Consolidated profit after tax of EUR 5.0 million, up 109%
: FINANCIAL YEAR 2005
(PRO FORMA CONSOLIDATED)
"       Gross gaming revenues of EUR 144 million in 2005 almost trebled compared
to 2004
"       EBITDA of EUR 15.1 million, up 141% 
"       Some 718,000 active and 542,000 new active betting customers, up 177%
and 201% respectively
"       Consolidated profit after tax of EUR 6.4 million after a loss of EUR 2.5
million in 2004
 
: DEVELOPMENT OF BUSINESS IN FOURTH QUARTER OF 2005
"       Gross gaming revenues of EUR 47.7 million, up 145%
In the period under review betandwin reported gross gaming revenues (total gross
gaming revenues from betting operations, casino, poker and games) of EUR 47.7
million, an increase of 145%. Gross gaming revenues (betting turnover less
customer winnings) from sports betting totalled EUR 29.6 million, up 116%. This
was equivalent to a gross winnings margin of 8.2%. Casino operations, poker and
games generated turnover (equivalent to gross gaming revenues) of EUR 18.1
million, EUR 11.7 million of which was attributable to casino operations (up
140%), EUR 4.0 million to poker (up 788%), and EUR 2.4 million to games (up
409%). 
"       EBITDA of EUR 6.7 million, up 49%
Although betandwin significantly increased its marketing and personnel expenses
as planned, it still reported earnings before interest, taxes, depreciation and
amortization (EBITDA) of EUR 6.7 million for the fourth quarter of 2005. This
compares with EUR 4.5 million in Q4 2004.
In order to further consolidate betandwins position in a fast growing European
online gaming market, the marketing budget was increased compared to Q4 2004,
and accounted for around 64% of total expenses. Marketing expenses of EUR 26.6
million compared to EUR 7.4 million in the same period the previous year, an
increase of 261%. The Company considerably expanded its customer base as a
result. Some 357,000 new registrations were recorded during the period under
review, up 199%. The number of active sports betting customers rose to 465,000,
a rise of 210%. There was also a significant rise in the number of new active
sports betting customers, to 184,000, up 234%. The key indicator of cost per new
active customer (CPA minus total marketing expenses divided by the number of new
active sports betting customers) declined compared to Q3 2005, from EUR 158 to
EUR 145.
Personnel expenses accounted for EUR 5.8 million (Q4 2004: EUR 2.9 million, up
EUR 100%). This also included non-cash expenses in the amount of EUR 1.4 million
due to the application of IFRS2 (Share-based Payment). As at the reporting date
of 31 December 2005, the Company employed 388 people, including freelancers (31
December 2004: 191 employees, up 197). A significant increase in employment
levels as planned was due to the Companys growth strategy, a course which will
be maintained in the current financial year.
 
Other expenses amounted to EUR 9.1 million (Q4 2004: EUR 4.5 million, up 103%).
They included expenses for bank charges, IT services, external odds calculation,
consulting, investor relations, etc. With effect from Q3 2005, these are now
reported excluding software licences, which are already included in the item net
gaming revenues. As in previous quarters, these increases were largely due to
expenses developing in direct proportion to the growing volume of business.
These included the cost of banking transactions, which were up from EUR 2.0
million to EUR 3.8 million. Consulting expenses amounted to EUR 1.3 million (Q4
2004: EUR 0.6 million).
 
Operating income (EBIT) totalled EUR 3.5 million (Q4 2004: EUR 2.78 million, up
25.9%). betandwin reported a quarterly result before tax of EUR 3.6 million (Q4
2004: EUR 2.9 million, up 24.9%).
"       Consolidated profit after tax of EUR 5.0 million, up 109%
After capitalization of deferred taxes and recognition of minority interests,
consolidated profit after tax totalled EUR 5.0 million (Q4 2004: EUR 2.4
million, up 109%). Minority interests relate to third-party shares in connection
with past investments / betandwin e.K. and acquisitions / Playit.com Ltd.,
beteurope.com.
: DEVELOPMENT OF BUSINESS IN FINANCIAL YEAR 2005
"       Gross gaming revenues of EUR 144 million in 2005 almost trebled compared
to 2004
In 2005 the Company generated gross gaming revenues (betting turnover less
customer winnings) of EUR 144.0 million from its betting and casino operations,
poker and games. This was equivalent to an increase of 177% compared to 2004.
This development reflected the marked increase in new customers, driven by a
growing interest in online gaming products in continental Europe, and the
Companys successful marketing strategy coupled with its rapid geographical
expansion in a market for online sports betting that is still developing
rapidly. 
Gross gaming revenues from sports betting totalled EUR 94.8 million in the year
under review, an increase of 152% compared to the previous year. Sports betting
accounted for some 66% of total gross gaming revenues. By comparison, in 2004
this figure was approximately 72%. This relative decline was due mainly to the
Companys successful product diversification with the rapid growth of its poker
business. 
In 2005 the Company reported a gross winnings margin of 8.7% from sports
betting, as against 9.9% in the year 2004. This figure was therefore within the
communicated bandwidth of 8 to 10%. 
Driven by a rapid increase in new active customers for sports betting, casino
turnover (defined as customer stakes less customer winnings) rose 164%, from EUR
12.8 million in the year 2004 to EUR 33.8 million in 2005. As in previous years,
the casino product was not advertised externally in the year under review. This
marked increase in turnover should be seen against the background of the high
cross-selling potential of an all-round provider like betandwin offering sports
betting, casino, poker and games. 
Poker turnover totalled EUR 9.8 million in the financial year under review,
accounting for about 6.8% of all gross gaming revenues. betandwin has been
offering poker since the end of the third quarter of 2004, reporting a turnover
of EUR 0.4 million for that year. Like the Companys casino product, poker has
so far hardly been advertised externally at all. 
The Games product group generated turnover (equivalent to gross gaming revenue)
of EUR 5.5 million in the year under review. Measured in terms of a turnover of
EUR 1.1 million in the year 2004, this represented an increase of 381%. The
reason for this massive increase lay in the introduction of a variety of new
games during the year under review. The payout rate in the games sector was
again over 90% as in the year 2004. 
"       EBITDA of EUR 15.1 million, up 141% 
Despite a significant increase in marketing and personnel expenses as budgeted
(including non-cash expenses in connection with IFRS2), EBITDA (earnings before
interest, taxes, depreciation, and amortization) for the year 2005 rose by EUR
6.3 million compared to the previous year to EUR 15.1 million. 
In addition to investment designed to establish the betandwin brand as rapidly
as possible - like the sponsoring agreement with the Portuguese soccer league
and cooperations with leading clubs and championships - extensive offline
marketing activities such as print and TV campaigns helped the Company to gain
significant market shares in its core target markets. This tapped into future
earnings potential and expanded betandwins market position. 
A corresponding increase in personnel expenses as a result of the Companys
rapid geographical expansion went hand in hand with a rise in the volume of
services, which rose from EUR 10.0 million to EUR 18.2 million. This also
included non-cash expenses due to the application of IFRS2 (Share-based Payment)
in the amount of EUR 2.5 million. A charge of EUR 0.6 million was made to
personnel expenses in 2004 as a result of expenses in connection with share
options. The development of bank charges - which were the largest component of
other operating expenses, accounting for 44% - was largely in line with the
growing number of customers. 
"       Some 718,000 active and 542,000 new active betting customers, up 177%
and 201% respectively
In the financial year under review betandwin was once again able to steadily
implement the growth strategy announced in mid 2004. Compared to 2004, the
number of active sports betting customers increased by 458,000 to 718,000. In
the year 2005, 542,000 of these were new active sports betting customers. This
was equivalent to an increase of 201% compared to 2004.
Over a million new registrations were recorded in the year 2005, an increase of
179% compared to 2004s 372,000 new registrations. betandwin had over two
million registered customers as of the reporting date of 31 December 2005. 
"       Consolidated profit after tax of EUR 6.4 million after a loss of EUR 2.5
million in 2004
A profit after tax and third-party interests of EUR 6.4 million was reported for
the financial year 2005, following a loss of EUR 2.5 million the previous year. 
Update on Ongame acquisition 
As reported on 16 December 2005, betandwin is to acquire 100% of the shares of
Ongame solutions AB ("Ongame") subject to certain conditions. The transaction
should be concluded in the first four months of the current financial year as
planned, provided the conditions specified in the sales contract - such as
approval by betanwins Supervisory Board and financing of the purchase price -
are met.
The purchase price to be paid for 100% of Ongames shares will be determined
using a contractually agreed multiplier of 5.37 times Ongames gross gaming
revenues less customer bonuses reported for the financial year 2005. Ongame
reported gross gaming revenues less customer bonuses of EUR 95.5 million for the
financial year under review. This means that betandwin will have to pay a
purchase price of EUR 512.7 million. 
betandwin expects to shortly be able to announce the fundraising required to
enable the completion of the acquisition of Ongame.
SELECTED KEY FIGURES
Ongames gross gaming revenues for 2005 totalled EUR 107.5 million, an increase
of 145% compared to gross gaming revenues of EUR 43.5 million reported for the
year 2004. Of this amount, EUR 102.6 million, or 95.4%, was accounted for by
gross gaming revenues on the B2C sector, and EUR 4.9 million, or 4.6%, on the
B2B sector. 
Despite a significant rise in investments, Ongame increased its operating income
(EBIT) by 78%, from EUR 14.7 million in the year 2004 to EUR 26.2 million.
Profit after tax was up 80%, from EUR 10.6 million in the year 2004 to EUR 19.1
million in the financial year under review. 
Ongames customer base is made up of the companys own customers on the one
hand, and customers of the Ongame partner network on the other. Ongame had a
total of 355,300 active ("real money") customers in Q4 2005 (247,260 of them the
companys own customers, and 108,040 network customers). The definition of
"active customer" is a customer who has played for "real money" at least once
during the period under review. 
Out of a total of 126,810 new active ("real money") customers in Q4 2005, 67,816
were the companys own customers. 58,994 new active customers were recorded in
partner networks, especially as a result of Coral/Eurobets joining the network
in the fourth quarter. Ongame had a total of 353,284 new active ("real money")
customers in FY 2005 (238,780 of them the companys own customers, and 114,504
network customers). The definition of "new active customer" is a customer who
has played for "real money" for the first time and at least once during the
period under review. 
Facility agreement
The betandwin Group has entered into a two year EUR 100,000,000 facility
agreement with The Royal Bank of Scotland Plc in order to assist the Group with
the planned Acquisition and to provide it with a flexible source of finance for
general corporate purposes. 
: OUTLOOK
At the end of 2005 betandwin acquired the exclusive international marketing
rights to the German Soccer League and the Second Division for the next three
seasons up to and including 2008/2009. The media rights acquired include all
international television broadcasting as well as online and mobile rights. The
sportsman media group will act as betandwins exclusive distribution partner for
these rights in close cooperation with the German Soccer League. The companies
have presented an innovative concept to the German Soccer League aimed at making
the league a global technology pioneer in the flexible utilization of a wide
variety of distribution channels and ensuring comprehensive global media
coverage. betandwin will therefore be able to use its rights to the first and
second German divisions to stream selected games to its non-German customers
live via its online platform www.betandwin.com. 
betandwin is increasingly becoming a "House of Games", with sports, fun and
entertainment in all areas of gaming. It is with this in mind that the Company
will continue to expand its product offering in 2006. The betandwin Racebook, a
channel featuring horse and dog racing, is currently under development, and the
Company plans to widen its offering in 2006 by adding games of skill like
backgammon and chess. 
The year 2006 has started promisingly for betandwin. Both gross gaming revenues
and active customers have developed more positively than anticipated during the
first few weeks of the year. 
In 2006 betandwin intends to continue expanding at an above-average rate for
this industry. The Company will continue to focus on growth in 2006, aiming to
report at least three-figure growth in revenues as well as an improved EBITDA
margin.
After the acquisition of Ongame has been successfully completed, the main task
will be to integrate the Ongame poker platform both technologically and
organizationally, creating a base from which to work towards becoming a global
leader. In this context, the Company is currently examining the possibilities
for expansion into selected South American and Asian markets.
This ad-hoc press release does not represent an offer or an invitation to
subscribe for or purchase shares in betandwin in jurisdictions where such an
offer or invitation is not permitted, including, without limitation, Australia,
Canada, Japan or the United States. betandwins shares have not and will not be
registered under the United States Securities Act 1933, as amended (the
"Securities Act") or with any authority of any state of the US, or the
applicable securities laws of Australia, Canada or Japan, and may not be offered
or sold in the US or to, or for the account of, any US persons (as defined in
Regulation S (as defined in the Securities Act) except pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, or in or into Australia, Canada or Japan or to any person
resident in Australia, Canada or Japan. 
Further Details:
http://www.betandwin.ag/media/pdf/quartals_berichte/quartalsbericht_q4_2005_en.pdf
Further inquiry note:
Investoren:
Konrad Sveceny
Investor Relations
BETandWIN.com
Interactive Entertainment AG
Börsegasse 11/Top 4, A-1010 
Vienna Phone: +43-1-585 60 44-2208 
mailto:investorrelations@betandwin.ag 
http://www.betandwin.ag
Presse:
Karin Klein
Corporate Communications
BETandWIN.com
Interactive Entertainment AG
Börsegasse 11/Top 4, A-1010 
Vienna Phone: +43-1-585 60 44-2200
mailto:press@betandwin.com 
http://www.betandwin.ag
emitter:      BETandWIN.com Interactive Entertainment AG
              Börsegasse  11/Lift 3/Top 4
              A-1010 Wien 
phone:        +43 (0) 1 5856044 
FAX:          +43 (0) 1 5856044 16
mail:         investorrelations@betandwin.ag
WWW:          www.betandwin.ag
ISIN:         AT0000767553
indexes:      ATX, Prime.market
stockmarkets: official dealing: Wiener Börse AG 
sector:       Casinos & Gambling
language:     English