History

1
NASDAQ UBET CIBC World Markets Global Gaming
Gaming Technology Conference April 19, 2005
2
Safe Harbor Language

• This presentation contains certain
  forward-looking statements. Statements containing
  expressions such as "may," "will," "project,"
  "might," "expect," "believe," "anticipate,"
  "intend," "could," "would," "estimate,"
  potential," "continue" or "pursue," or the
  negative or other variations thereof or
  comparable terminology used in Youbet's
  presentation and in its reports filed with the
  Securities and Exchange Commission are intended
  to identify forward-looking statements. These
  forward-looking statements, which are included in
  accordance with the Safe Harbor provisions of the
  Private Securities Litigation Reform Act of 1995,
  may involve known and unknown risks,
  uncertainties and other factors that may cause
  Youbet's actual results and performance in future
  periods to be materially different from any
  future results or performance suggested by the
  forward-looking statements in this presentation.
  Although Youbet believes the expectations
  reflected in such forward-looking statements are
  based upon reasonable assumptions, it can give no
  assurance that actual results will not differ
  materially from these expectations. From time to
  time, these risks, uncertainties and other
  factors are discussed in the Company's filings
  with the Securities and Exchange Commission.
  Such factors include, without limitation, the
  following the timely development and market
  acceptance of new products and technologies our
  ability to secure financing on terms acceptable
  to us our ability to control operating expenses
  increased competition in the advance deposit
  wagering business a decline in the public
  acceptance of wagering wagering ceasing to be
  approved in jurisdictions where Youbet currently
  operates the limitation, conditioning or
  suspension of any of Youbet's licenses increases
  in or new taxes imposed on wagering revenues
  loss or retirement of key executives and a
  decline in the general economy. Viewers are
  cautioned not to place undue reliance on
  forward-looking statements, which speak only as
  of the date of this presentation. Youbet does
  not undertake, and specifically disclaims any
  obligation, to publicly release the result of any
  revisions that may be made to any forward-looking
  statements to reflect the occurrence of
  anticipated or unanticipated events or
  circumstances after the date of such statements.

3
Company Overview

• Only public company 100 focused on legal
  Internet gaming
• First online pari-mutuel wagering site
• Broadcast content from 140 tracks (900 Gb of
  AV/day)
• Includes content from Australia, Canada, Hong
  Kong, UK South Africa
• Processed over 65 million wagers for more than 1
  billion since 1997
• Approximately 36 market share for the
• year ended December 31, 2004

4
2004 A Year of Record Operational
Accomplishments

• Total handle increased 14 to 315 million
• Same track handle and net revenue rose 23 and
  35, respectively
• Processed 22 million wagers - an increase of 12
  from 2003
• Two funding records set
• Deposits increased 30 to 97 million
• Transactions rose 21 to 681,000
• Number of concurrent users reached record of over
  9,000 - an increase of 65 from highest total
  achieved in 2003
• 35 more new customers added in 2004 compared to
  2003
• Fastest growing customer demographic is 21-30 age
  group (new customers and wagered)
• Second fastest growing segment is 31 - 40 age
  group

5
Domestic ADW Market

• Pari-mutuel horse racing is only legal online
  wagering opportunity in the U.S.
• Specific exemption to federal law that allows
  companies to offer online advanced deposit
  wagering (ADW)
• ADW for horse racing is relatively new and is the
  fastest growing channel for the industry 17
  growth per year
• Domestic horse racing wagering is approximately
  18 B market with ADW penetration of only 10
• ADW market split is 70 online and 30 IVR (phone
  based)
• ADW market is likely to consolidate as consumers
  migrate to preferred platforms

6
Legal/Statutory Authority
Federal Regulation Interstate Wire Act Can wager
on Internet if legal in state jurisdiction Interst
ate Horseracing Act Pari-mutuel wagering is
legal State Regulation Legal in 40 states 15
states specifically approve internet pari-mutuel
wagering 25 states are statutorily silent Youbet
has agreements with every racetrack and
every horsemens group servicing those tracks.
7
Youbets Market
Youbets ADW activities are approved in 40 of 53
U.S. jurisdictions
8
Competitive Advantages

• Hardware and software infrastructure can be a
  barrier to entry for new participants
• Robust features appeal to both high-end
  handicapper and less sophisticated users who
  appreciate user-friendly interface
• Current utilization of only 25 of transaction
  capacity allows for tremendous scale with small
  incremental cost
• Sophisticated data mining tools and comprehensive
  customer data base drive marketing programs
  designed to attract new users, retain current
  users, and maximize wagering patterns.

9
Customer Demographics

• Average customer is 41 - 50 year old male with
  100,000 annual income
• Youbets technology platform is attracting a
  young, tech-savvy customer that is otherwise not
  represented in horse racing wagering market
• Bettors ages 21 - 30 are fastest growing customer
  segment
• 55 of this demographic wager on other gaming
  sites, creating unique retention opportunity as
  Youbet expands system to incorporate other forms
  of wagering
• 44 go to a race track at least 4 times per month
• Bettors ages 31 - 40 are the second fastest
  growing customer segment

10
X2Video Players Services
Youbet.com is a horse wagering site built by
handicappers for handicappers
11
Product Differentiation
Youbet.com is considered the premier online
wagering site by racing enthusiasts because of
its fully integrated customized services
12
Channel Play
Handle growth driven solely by ADW channel CAGR
17
Projected CAGR, 02-08
17
-1
-1
0
Online ADW is the only growing channel in
domestichorse race wagering.
13
ADW Market Share
Youbet.com has the largest and fastest growing
ADW Market Share
14
Revenue Model
15
Youbet Growth Channels
Organic Growth
Youbet Leveraging Core Domestic ADW Application
Domestic Expansion Opportunities
International Expansion Opportunities
16
Organic Growth

• Leverage product offerings
• Further grow customer base, retention rates and
  wager transaction volumes
• Capitalize on high-profile events such as Triple
  Crown and Breeders Cup to attract new users and
  grow handle
• Migrate customers to higher yielding tracks and
  more exotic wagers
• Utilize infrastructure capacity
• Currently utilize only 25 of transaction
  capacity 90 of costs are fixed
• Upgrade phone wagering platform
• 3 of handle derived from phone platform vs.
  30 industry average

17
Domestic ExpansionOpportunities

• Leverage infrastructure capacity to position
  Youbet as ADW consolidator of choice
• Recently announced agreement to acquire
  International Racing Group in an accretive
  transaction expected to close in 2Q 05
• IRG is a privately-held, licensed and regulated
  pari-mutuel account wagering company based in
  Curacao
• IRG accepts phone wagers only predominantly from
  high-volume customers and had total handle of
  approximately 210 million in 2004 (50 growth
  over 2003)
• Offer ASP technology solutions for domestic
  tracks
• Back-end wagering software and player tracking
  systems are natural evolution of consumer ADW
  platform
• Extend platform by building on core market
  expertise and acquisitions of complementary
  businesses/technologies that expand operations
• Nevada is a particular focus for revenue
  diversification opportunities

18
International Expansion Opportunities

• Recently announced plans to launch a horse racing
  entertainment website exclusively for access by
  customers residing in Mainland China
• Extend brand to a new, potentially large, market
  where the legalization of online gaming is
  gaining traction
• Offer ASP technology solutions for international
  tracks
• Back-end system compatible with international
  race wagering, markets and currency
• Create international hub via obtaining license or
  strategic partnership
• Co-mingled pools and content
• Cultivate number of non-wagering international
  handicappers
• Continue to increase international track offerings

19
Historical Financial Performance
20
Balance Sheet Highlights
21
Stock Price Performance
NASDAQ-100 Index and Industry Peers 3 years
NDX NASDAQ-100 Index MECA Magna
Entertainment GMST Gemstar
CHDN Churchill Downs
22
Stock Price Performance
FORBES 200 Best Small Companies (NASDAQ stocks
within top 10) 3 years
BSTE Biosite CRDN Ceradyn SHFL
Shuffle Master AMED Amedisys CYTC
Cytyc CTSH Cognizant Technology
Solutions
23
Investment Merits

• ADW industry market share leader
• Business model has significant leverage
• Currently utilizing 25 of transaction capacity
• 90 of costs are fixed
• Ongoing organic growth in core market
• Well-positioned to be industry consolidator
• Opportunity to leverage online wagering platform
  in other forms of gaming in international markets
• Unlevered balance sheet with 7.1 million in
  working capital (excluding 3.3 million in
  current deferred tax assets)
• Experienced management focused on long-term
  growth and shareholder value
• On track to achieve 2005 diluted EPS of 0.18
  from current operations alone

24
NASDAQ UBET
Visit www.youbet.com for a free trial