Betting Promotion: INTERIM REPORT Q3 2012

(For complete interim report see attached file)

• 140% growth in Bookmaker Betting Turnover compared to Q3 2011
• Improved Trading Earnings for Q3 2012 compared to Q3 2011
• First day of trading on NASDAQ OMX First North Sweden is 3rd December 2012.

July - Sept 2012

• Betting turnover: EUR 159,829 thousand (160,516)
• Net turnover after trading fees: EUR 802 thousand (379)
• Gross margin:  0.50% (0.23)[1]
• Operating income: EUR -34 thousand (-328)
• Operating margin:  -4% (-88)[2]
• Net income: EUR -2 thousand (-249)
• Earnings per share: EUR 0.0 (-0.3)

January - September 2012

• Betting turnover: EUR 505,597 thousand (549,320)
• Net turnover after trading fees: EUR 1,923 thousand (765)
• Gross margin:  0.38% (0.14)1
• Operating income: EUR -607 thousand (-1,379)
• Operating margin:  -32% (-180)2
• Net income: EUR -580 thousand (-1,409)
• Earnings per share: EUR -0.06 (-0.15)

[1] Net Turnover after trading fees as percent of Betting Turnover

[2] Operating Income as percent of Net Turnover after trading fees

Managing Director Comments

"Earnings for the quarter are in line with our expectations.  We have increased the number of customers connected to the Bookmaker product to twelve by the end of September.  Discussions are underway with a number of different operators of varying size.  It is clear that there is an interest in our product. "says Betting Promotion's CEO Johan Moazed.

Overview July - September 2012

Net Turnover after trading fees for the third quarter amounted to TEUR 802 (379).  Betting Turnover for the third quarter amounted to TEUR 159,829 (160,516). This means that the third quarter shows a gross margin of 0.50% (0.23).

Trading

Net Turnover for Trading for the third quarter amounted to EUR 743 thousand (311). Betting Turnover for the third quarter amounted to EUR 153,625 thousand (157,931). This means that Trading for the third quarter shows a gross margin of 0.48% (0.20).

Trading refers to the turnover which is traded directly on Betting Exchanges with very small margins. The Product margin for the quarter is in line with the company's long-term expectations. The company is continuously working to optimize and improve the gaming models to achieve maximum profit. The product is the base of the company's operations and the foundation for being able to deliver a competitive product to the bookmakers. Betting Turnover from Trading is mainly influenced by the development of betting exchanges.  In the current situation, the company’s assessment is that turnover will be stable for the near future.

Bookmaker

Net Turnover for Bookmaker for the third quarter amounted to EUR 59 thousand (67). Betting Turnover for the thrid quarter amounted to EUR 6,204 thousand (2,585). This leads to a gross margin of 0.95% (2.61).

Bookmaker refers to the business where the company supply odds to operators who in turn offer these prices to end consumers. This Product demonstrated an increase in Betting Turnover of 140% over quarter three of 2011.  The margin for  the product was lower than long term expectations due to the volatility associated with sports betting.  The company is continuously working to increase the number of sports and markets offered for both pre-live and live.

Overview January – September 2012

Net Turnover after trading fees for the first nine months amounted to TEUR 1,923 (765). Betting Turnover amounted to TEUR 505,597 (549,320). This means that the period shows a gross margin of 0.38%(0.14).

Trading

Net Turnover from Trading in the first nine months amounted to TEUR 1,683 (698). Betting Turnover amounted to TEUR 487,864 (546,736). This means that trading in the first nine months shows a gross margin of 0.34% (0.13).

The margin from the trading product has recovered well after a weak first quarter.   Volatility in the results is a natural part of the company’s operations.  However, in the long term, the outcome is more stable and follows our theoratical profit. The company is continuosly working to opitimize and improve the gaming models.

Bookmaker

Net Turnover from Bookmaker product for the first nine months amounted to TEUR 240 (67). Betting Turnover amounted to 17,733 TEUR (2,585). This means that the bookmaker in the first nine months shows a gross margin of 1.35% (2.61).

The Bookmaker product continues to show good growth. Betting Turnover in September was EUR 2,217 thousand compared to 1,450 thousand in January.  During the same period the number of customers increased from 7 to 12. Since the beginning of the year the company worked intensely in marketing this product, including having stands in gaming fairs, buying ads and setting up interviews in the gaming media. This work has had the desired effect of the company and the product has attracted a lot of interest. In addition to direct contact with different operators, the Company works with various strategic partners for the distribution of the product. The company continuously works with these parters in order to improve the product.   The company has signed agreements with a number of operators that are expected to contribute with betting turnover during the next quarter. In addition, discussions are underway with a number of operators of varying sizes.

For further information please contact:

Johan Moazed, Managing director of Betting Promotion Sweden AB.

Telephone +46 40 611 84 94