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.

This report includes the silent interest bwin e.K. reported in a pro forma consolidated version which therefore differs from the consolidated financial statements. This has no impact on fundamental statements made by the management on the development of the Company.

Highlights

Q3 2007 (pro forma consolidated)

Gross gaming revenues of EUR 86.2 million up 20.1% (Q3 2006: EUR 71.8 million excl. US and Turkish operations)

Sports betting gross gaming revenue up 15.3% to EUR 47.3 million (Q3 2006: EUR 41.1 million excluding Turkey): sports betting margin of 8.5%

Total revenues of EUR 90.1 million up 34.0% (Q3 2006: EUR 67.3 million excl. US and Turkish operations)

827,000 active and 192,000 new active real-money customers

EBITDA (adjusted) at EUR 15.2 million (Q3 2006: -EUR 5.2 million)

Result after tax -EUR 5.1 million (Q3 2006: -EUR 22.6 million)

First nine months of 2007 (pro forma consolidated)

Gross gaming revenues (excl. Turkish operations) of EUR 248.0 million up 20.0% (Q1-Q3 2006: EUR 206.7 million excl. US and Turkish operations)

Total revenues (excl. Turkish operations) of EUR 252.7 million up 34.5% (Q1-Q3 2006: EUR 187.9 million excl. US and Turkish operations)

1.4 million active and 563,000 new active real-money customers (excl. Turkey)

EBITDA (adjusted) at EUR 49.7 million (Q1-Q3 2006: -EUR 8.1 million)

Result after tax -EUR 0.8 million (Q1-Q3 2006: -EUR 49.8 million)

Regulatory developments

Outlook

Development of business in Q3 2007 (pro forma consolidated)

Gross gaming revenues of EUR 86.2 million up 20.1% (Q3 2006: EUR 71.8 million excl. US and Turkish operations)

In Q3 2007 bwin generated gross gaming revenues (sum of gross gaming revenues from betting operations, poker, casino and games) of EUR 86.2 million. The Company reported increases of 20.1% compared to the same period the previous year (Q3 2006: EUR 71.8 million excl. US and Turkish operations), and 14.0% compared to Q2 2007. The gross gaming revenues generated from the poker, casino and games sectors amounted to EUR 20.7 million (Q3 2006: EUR 14.1 million excl. US and Turkish operations), EUR 14.4 million (Q3 2006: EUR 13.7 million excl. US and Turkish operations) and EUR 3.9 million (Q3 2006: EUR 2.9 million excl. US and Turkish operations) respectively. This represented increases of 46.2% (poker), 4.9% (casino), and 32.5% (games) compared to Q3 2006 (excl. US and Turkish operations).

Sports betting gross gaming revenue up 15.3% to EUR 47.3 million (Q3 2006: EUR 41.1 million excluding Turkey): sports betting margin of 8.5%

Sports betting gross gaming revenues rose from EUR 41.1 million in Q3 2006 (excl. Turkish operations) to EUR 47.3 million in Q3 2007. The sports betting margin improved from 7.2% in Q2 2007 to 8.5% (Q3 2006: 9.2%), and was thus within the communicated bandwidth of 8 to 10%.

Total revenues of EUR 90.1 million up 34.0% (Q3 2006: EUR 67.3 million excl. US and Turkish operations)

Net gaming revenues (gross gaming revenues less all deductions such as betting duties, casino taxes and bonuses granted to customers) amounted to EUR 75.5 million in Q3 2007. This represented an increase of 21.9% compared to Q3 2006 (EUR 61.9 million excl. US and Turkish operations) and 13.8% compared to Q2 2007. This was attributable mainly to an increase in net gaming revenues from poker to EUR 18.5 million (up 51.2% compared to Q3 2006 excl. US and Turkish operations), and sports betting to EUR 40.5 million (up 17.2% compared to Q3 2006 excl. Turkey).

In Q3 2007 bwin reported revenues in the amount of EUR 11.0 million from the international marketing of rights to the games of the first and second German Soccer Leagues (Q3 2006: EUR 3.6 million). Of this amount, EUR 5.1 million were attributable to additional revenues for technical services (providing TV signals to licensees) resulting from the marketing of licensing rights for the entire 2006/07 season. It is anticipated that these revenues will be allocated to future quarters on a pro rata basis. Overall bwin increased its total revenues to EUR 90.1 million in Q3 2007, a rise of 34.0% compared to Q3 2006 (EUR 67.3 million excl. US and Turkish operations).

827,000 active and 192,000 new active real-money customers

The development of both active and new active real-money customers in the last quarter (single total for all products) was characterized by successful reactivation and marketing campaigns and a steady expansion of the product range. Compared to Q2 2007, the number of active customers rose 9.0% to 827,000 in Q3 2007. A total of 192,000 of these customers became active for the first time (Q2 2007: 173,000), an increase of 10.8% compared to the Q2 2007.

In conjunction with specific account reactivation measures, the b'inside customer loyalty programme launched in October 2007 has made the range of services more attractive to both new and existing customers. bwin anticipates that this will result in a lower churn rate as well as a greater number of active customers.

The cost (including bonuses) per new active customer was EUR 196.5, up 3.8% compared to Q2 2007 (EUR 189.4), whilst net gaming revenues per active customer increased by 4.3% to EUR 91.3 in Q3 2007 compared to the previous quarter.

EBITDA (adjusted) at EUR 15.2 million (Q3 2006: -EUR 5.2 million)

After adjustment for non-cash personnel expenses in the amount of EUR 6.0 million IFRS 2, EBITDA (earnings before interest, taxes, depreciation and amortization) in Q3 2007 improved compared to the same period the previous year to EUR 15.2 million (Q3 2006: -EUR 5.2 million). Amongst other things, the increase compared to the previous quarter (Q2 2007: EUR 9.9 million) was attributable to an improved sports betting margin.

Marketing expenses

Marketing expenses in Q3 2007 in the amount of EUR 29.1 million were significantly down by 44% compared to Q3 2006 (EUR 52.1 million). In contrast to Q2 2007, greater emphasis was placed on acquisition marketing and specific account reactivation measures in Q3 2007. Bonuses totalling EUR 8.5 million were issued to customers in Q3 2007. This was equivalent to around 9.9% of gross gaming revenues (Q2 2007: EUR 7.1 million, or 9.4% of gross gaming revenues). Sponsoring costs for Real Madrid were taken into account for the first time in Q3 2007.

Personnel expenses

The increase in personnel expenses from EUR 13.7 million in Q3 2006 to EUR 21.1 million in Q3 2007 was due to a significant rise in the number of staff, and to non-cash expenses in the amount of EUR 6.0 million (Q3 2006: EUR 0.5 million) in connection with share-based compensation (IFRS 2). The number of staff as of the reporting date 30 September 2007 was 1,030 employees (30 September 2006: 870). As in previous quarters, this increase was due mainly to the areas of IT development, business development and customer services. bwin continues to invest in the expansion of its technology platforms, especially sports betting and poker, which it considers to be a strategic factor in the Company's long-term success.

Other expenses

The bwin Group's other expenses were up 4.6% compared to the same period the previous year to EUR 30.7 million (Q3 2006: EUR 29.4 million). Other expenses rose by 20.7% compared to Q2 2007 (EUR 25.4 million) as a result of higher expenses for legal consulting, especially in connection with information campaigns in selected core markets, and higher costs due to the provision of TV signals of German Soccer League matches.

Banking expenses fell from EUR 8.7 million in Q3 2006 to EUR 6.1 million in Q3 2007. Expenses for services rendered (services by third parties, Internet charges) rose from EUR 6.2 million in Q3 2006 to EUR 6.7 million in Q3 2007, and were attributable to a significant expansion in the range of live streams offered. Expenses for consulting, particularly legal consulting, rose from EUR 4.6 million in Q3 2006 to EUR 7.2 million in Q3 2007. Infrastructure costs amounted to EUR 2.5 million (Q3 2006: EUR 3.8 million). The rise in marketing rights to EUR 4.0 million (Q3 2006: EUR 0.5 million) was attributable principally to the provision of TV signals for German Soccer League matches for the full 2006/2007 season. It is anticipated that these costs will be allocated to future quarters on a pro rata basis. Other costs accounted for EUR 4.2 million in Q3 2007 (Q3 2006: EUR 5.6 million).

Result after tax -EUR 5.1 million (Q3 2006: -EUR 22.6 million)

bwin recognized depreciation in the amount of EUR 13.4 million in Q3 2007 (Q3 2006: EUR 18.1 million). Mainly as a result of investment to expand the Company's technical infrastructure, depreciation of tangible assets increased to EUR 6.8 million (Q3 2006: EUR 4.2 million). Rights in the German Soccer League resulted in depreciation in the amount of EUR 4.8 million (Q3 2006: EUR 4.7 million). Depreciation resulting from acquisitions totalled EUR 1.8 million as in Q2 2007, significantly down compared to the same period the previous year (Q3 2006: EUR 9.1 million) due to the impairment in 2006. The operating result improved from -EUR 23.7 million in Q3 2006 to -EUR 4.3 million in Q3 2007. A loss after tax of EUR 5.1 million was reported for Q3 2007, as compared to a loss of EUR 22.6 million for the comparable period the previous year.

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