Independant Auditor's Report to the Shareholders of Sportingbet Plc

We have audited the Group and Parent Company Financial Statements (the ‘Financial Statements’) of Sportingbet Plc for the year ended 31 July 2006 which comprise the Group Profit and Loss Account, the Group and Parent Company Balance Sheets, the Group Cash Flow Statement, the Group Statement of Total Recognised Gains and Losses and the related Notes. These financial statements have been prepared under the accounting policies set out therein.

Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report and the Group and Parent Financial Statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities. Where a company is fully listed, there are additional responsibilities contained in the Listing Rules of the Financial Services Authority. Sportingbet Plc has voluntarily complied with the requirements of the 2003 FRC Combined Code in preparing its annual report.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the Financial Statements give a true and fair view and have been properly prepared in accordance with the Companies Act 1985 and whether the information given in the Directors’ Report is consistent with those Financial Statements. We also report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding Directors’ remuneration and other transactions is not disclosed.

We review whether the Corporate Governance Statement reflects the Group’s compliance with the nine provisions of the 2003 FRC Combined Code specified for review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.

We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. The other information comprises only the Directors’ Report, Chief Executive’s Statement, Business Review, Financial Review, Corporate Governance Statement, Corporate Social Responsibility Statement, Remuneration Report and Regulatory Developments. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the Financial Statements. Our responsibilities do not extend to any other information. Our report has been prepared pursuant to the requirements of the Companies Act 1985 and for no other purpose. No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of the Companies Act 1985 or has been expressly authorised to do so by our prior written consent. Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Financial Statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the Financial Statements, and of whether the accounting policies are appropriate to the Group’s and Company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the Financial Statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the Financial Statements.

Opinion
In our opinion:

• the Group Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the Group’s affairs as at 31 July 2006 and of its profit for the year then ended;
• the Parent Company Financial Statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the state of the parent company’s affairs as at 31 July 2006;
• the Financial Statements have been properly prepared in accordance with the Companies Act 1985; and
• the information given in the Directors’ Report is consistent with the financial statements.

Emphasis of matter – post year and disposal and closure of US-facing operations
In forming our opinion on the Financial Statements, which is not qualified, we have considered the adequacy of the disclosures made in note 28 to the Financial Statements concerning the implications of changes in United States legislation relating to internet gaming. As a result of this new legislation, on 12 October 2006, the Group sold its US-facing sports betting and casino operations. The Group has also ceased taking deposits from USresident customers for its Paradise Poker business. The Group’s business has been significantly reduced and the carrying values of the Company’s investments and the Group’s assets employed in its US-facing operations have been significantly impaired.

BDO Stoy Hayward LLP
Chartered Accountants and
Registered Auditors
London
19 October 2006