Group Chief Executive Statement

The past financial year, and my last as Group Chief Executive, has demonstrated the potential of the internet gaming industry and the strength of Sportingbet’s operations to deliver a wide range of gaming products in a safe, secure and entertaining environment. Sportingbet delivered record profits as we achieved significant organic growth from our key products and markets.

Whilst Sportingbet, and the industry as a whole, continues to demonstrate significant growth, this past year has seen the emergence of a sustained political focus and debate on the industry across many parts of the globe. The Board has continued to lobby for the adoption of consistent and transparent policies promoting the benefit of proper regulation. However this year has seen the fragmentation of the Group’s efforts, with many governments compromising this policy for various motives, be they fiscal protectionism or political gain. As we move into a new financial year, there is still little sign that governments are ready to embrace the Board’s belief in the harmonisation of internet trading across geographic borders. Important international entities such as the European Union and the World Trade Organisation are seemingly unable, at this time, to provide much needed clarity.

This action culminated in September 2006 when the United States Congress passed the Unlawful internet Gambling Enforcement Act 2006, which has had a material impact on the industry and Sportingbet. As a result of clear advice received from its advisors, Sportingbet has exited from the US market.

Outside of the US market Sportingbet is performing well and this will now be our focus going forward. The Group’s continuing operations of European sports, casino and poker, Australian sports and the non US-facing business of Paradise Poker are well placed to grow. Having now attained penetration into targeted European markets, Sportingbet’s European business has an exciting future ahead of it. Sportingbet’s Australian business, with an ever greater focus on the retail customer, is generating stable margins and profitability. Paradise Poker will concentrate on growing its non US-facing business and will roll out multi-language and multi-currency sites over the coming months to complement our localised sports and casino offering.

Our aim is to provide adult customers with high quality gambling and gaming services in an environment that is convenient, entertaining, fair, regulated and secure.

As the Group now embarks on a new phase in its development, the strength and stability of its management team becomes even more important. Sportingbet has a strong and loyal team of experienced people. As I now stand aside and pass the baton to Andrew McIver, I have no doubt that this industry leading team will serve the Group and its stakeholders well.

In closing, I would like to take this opportunity to thank Peter Dicks for his contribution as Chairman to the Sportingbet business and also to recognise the efforts of our Senior Independent Director, Sean O’Connor, for kindly acting as Interim Chairman as we digest the outcome of recent events and move forward into a new stage in the life of Sportingbet.

Nigel Payne
Group Chief Executive