NASDAQ SC: UBET

1
NASDAQ (SC) UBET
2
Who Are We?

• We provide customers the ability to wager, watch
  and access handicapping information on horse
  racing events worldwide
• Industry leader in Advance Deposit Wagering (ADW)
• Youbet.com is the largest Internet provider of
  horse racing content in the United States
• Proven and scalable online wagering technology
• Largest broadcaster of live A/V on the Internet
  (900 Gb/Day)
• Positive cash flow and earnings
• Significant international growth opportunities
• Experienced, results-driven management team

To be the premier technology and service
provider for interactive wagering worldwide
3
History

• Public since 1995 (Nasdaq (SC) UBET)
• First online parimutuel wagering site
• First parimutuel wagering site to provide a full
  range of A/V content
• Processed over 800 million dollars in wagers
  since accepting our first wager in 1997
• Processed over 65 million wagers since 1997
• First quarter 2004 market share of 39

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Points of Differentiation

• Channel Play
• ADW growing at 17-23 CAGR
• Youbet Revenue Model
• 6 -7 yield
• 90 of costs are fixed
• Largest ADW
• 39 market share
• Competitive Advantage
• Proven and scalable technology
• Operating at 25 capacity
• Largest broadcaster of live A/V (900 Gb/day)
• Growth Opportunities
• Domestic
• International
• New Product Development

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Channel Play
The bulk of handle growth will come through phone
and online channels
Projected CAGR, 02-08
Horse Racing Industry Handle by Channel
20
17.5
17.5
17.5
17.3
17.4
17.1
16.8
16.5
16.2
17
Online ADW
15.9
15.6
15.2
14.9
14.6
14.1
14.1
15
13.9
13.7
OTB
-1
10
Handle, Bn
Inter-track
-1
5
Live
0
0
'91
'92
'93
'94
'95
'96
'97
'98
'99
'00
'01
'02
'03E
'04E
'05E
'06E
'07E
'08E
How can the industry maximize the opportunity of
this new channel?
Note 2002-2007 projected handle for OTB,
inter-track, and live based on historic growth
trends 2002-2007 ADW handle growth projections
based on Pearl-Reed penetration model Source
Association of Racing Commissioners
International, Monitor analysis
6
Channel Segmentation
Because we consistently deliver the highest
margin to our tracks, we have powerful leverage
to expand our wagering channel with them
7
Legal/Statutory Authority

• Regulations
• Legal in 40 states
• 15 states specifically approve internet
  pari-mutuel wagering
• 25 states are statutorily silent
• Interstate Wire Act
• Can wager on Internet if legal in state
  jurisdiction
• Interstate Horseracing Act
• Pari-mutuel wagering is legal

8
Youbet Presence
Youbet.com is present in 40/53 US jurisdictions
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Wager Flow
Youbet Net Revenue Structure ( based on handle
for each dollar wagered)
10
OR Hub Market Share
2004 figures include handle up to March 31,
2004.
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Competitive Advantage
Weve effectively leveraged our resources and
capabilities to create a competitive advantage
while providing the highest margin yield to our
tracks

• Technical infrastructure is a barrier-to-entry
  that is proven and scalable
• Best technology
• Comprehensive track offering and customized
  services that create repeat customers
• Best user interface
• Best customer experience
• Loyal customer base
• Detailed customer segmentation analysis
  targeted tactics to attract additional customers

12
Product Differentiation
Youbet.com is considered the premier online
wagering site by racing enthusiasts because of
our fully integrated customized services
EXISTING PRODUCTS
Youbet.com
ExpressBet
TVG
WinTicket
Track Controller
X
Wager Queue
X
Winners Bonus
X
X
TM
Players Trust
X
Personalized Messaging
X
X
X
Live Continuous Update on Race Changes
X
System Analyzer (Diagnostic Utility)
Subscription
Per Bet
Per Bet
Fees
40
39
13
38
Number of States Operated In
NEW PRODUCT ENHANCEMENTS
X
X
Race Replays
X
Multi Track A/V
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World Class User Interface
We have the most comprehensive list of tracks and
most unique services available to our customers
Youbet.com is a horse wagering site built by
horse racing professionals
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Growth Initiatives
We are evaluating numerous business development
opportunities that would increase our competitive
advantage and accelerate our growth

• Revenue Model
• B2B
• B2C
• International Expansion
• South America
• Europe
• Asia
• New Product Development
• Mobile Products
• Telephone Strategy
• Replay Technology

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Growth Initiatives
International 2002 Worldwide Horse Racing
Handle, Billions ()
17.8
132.5
Note Figures represent estimates from National
Gambling Impact Study Commission Report and
Internet Gambling Report V
16
Growth Initiatives
Source International Federation of Horse Racing
Authorities
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Historic Financial Performance
Handle (, millions)
19.8
18.8
28.4
27.6
61.0
71.8
50.0
27.1
39.6
46.3
73.3
72.5
69.8
5.4
5.1
4.7
4.8
3.8
3.1
2.7
2.4
3
1.8
1.7
1.7
2
1.1
1.4
0.7
1.1
0.6
0.4
0.5
1
Millions ()
0
0.1
-1
-0.7
Millions
-1.0
-2
-1.4
-2.0
-3
-2.7
-3.0
-3.0
-3.3
-3.2
-4
-3.7
-3.4
-3.4
-3.9
-4.1
-4.1
-4.1
-4.4
-4.3
-5
-4.7
-5.5
Q1
Q2
Q3
Q4
Q1
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2003
2001
2004
2002
New management team began First time
Youbet.com ever achieved a quarterly net income
of 15,111
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Balance Sheet Highlights
19
UBET Stock Performance (1 year)
20
Stock Performance (2 year)
Nasdaq
21
UBETs Progress
In summary

• Building long-term shareholder value is
  managements guiding principle
• UBET has identified international opportunities
  that exist which will increase overall growth
• UBET is on track with our business plan and
  continuing to evaluate costs
• UBET continues to concentrate on growing handle
  and yield
• Management sees growth opportunities and product
  development as a leading success factor
• Management is focused on long-term growth