Phumelela Gaming and Leisure Trade & Industry PC Presentation Review of National Gambling Legislation MPHO RAMAFALO

Agenda INTRODUCTION & BACKGROUND SOCIO-ECONOMIC IMPACT OF LEGALISED GAMBLING IMPACT OF MISLEADING ADVERTISING REGULATION OF CROSS-BORDER GAMBLING EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT INTERACTIVE GAMBLING Q&A Phumelela Gaming & Leisure Limited

INTRODUCTION & BACKGROUND Phumelela is licensed to operate *horse racing & totalisator in *Eastern Cape, *Free State, *Gauteng, Limpopo, Mpumalanga, *Northern Cape & North West 5 racecourses & allied training centres in 4 *provinces (contributing to staging approximately 250 race meetings annually) Over 230 betting shops (TAB branch & agency network) in seven provinces 2 Call Centres in Eastern Cape & Gauteng Betting website (www.tabonline.com) Phumelela Gaming & Leisure Limited

INTRODUCTION & BACKGROUND - Cont Phumelela commingles its horse racing & sports betting totalisator pools with Gold Circle in SA Gold Circle operates in KZN & Western Cape Phumelela & Gold Circle also have interest in fixed odds (bookmaking) through their shareholding in Betting World (Pty) Ltd Phumelela & Gold Circle are the core of the horse racing industry, employing tens of thousands of people (both directly & indirectly) Jointly own the intellectual rights, including the broadcasting of horse racing through Tellytrack, a DStv channel Phumelela Gaming & Leisure Limited

INTRODUCTION & BACKGROUND - Cont Phumelela continues to expand its international presence, capitalising on its simulcast products & coverage, as well as strong technological platform that allows for international commingling pools Phumelela, through its jointly controlled operation, Phumelela Gold Enterprises (PGE), a partnership between Phumelela and Gold Circle: Owns a majority share in Phumelela Gold International Limited, a company incorporated in The Isle of Man (IOM) Owns the exclusive worldwide broadcasting rights to 30 of the UK racecourses (outside UK & Ireland) Operates a television studio that broadcasts live horseracing audio, visual & data from South Africa, UK & other international racecourses to betting shops & private subscribers worldwide Phumelela Gaming & Leisure Limited

Target Market Demographics There are 2.2 million adults in South Africa who are interested in horse racing and 1.5 million regular punters with the following profile: 82% Black 62% Male 60% are between the ages of 18 - 34 years 50% of punters are LSM 6 - 7 Concentrated mostly in Gauteng, followed by KZN, Free State and Western Cape Source: TGI 2008 Phumelela Gaming & Leisure Limited

Horse Racing Punters Demographics Source: TGI 2008 Phumelela Gaming & Leisure Limited

The Popularity of Horse Racing Globally Globally, more than 100 million racing fans attend events across the world and US$100 billion is gambled globally on horse racing at Tote outlets. COUNTRY ANNUAL ATTENDANCE Japan 14 500 000 United Kingdom 5 900 000 Australia 1 900 000 Hong Kong 1 850 000 France 1 700 000 Ireland 1 400 000 South Africa 1 000 000 New Zealand United Arab Emirates 120 000 Source: Economic Impact of British Racing Report, Deloitte 2006; Phumelela data Phumelela Gaming & Leisure Limited

Quantifying Local Horse Racing’s Annual Global Reach Nearly 1 million people attend the 400+ SA races +100 million contacts occur off-course Local media assets result in an additional 224 million points of contact 2.8 billion+ contacts annually GLOBAL SA races are broadcast to +40 countries globally This creates 2.5 billion contacts with consumers each year Source: Phumelela and Gold Circle Information Phumelela Gaming & Leisure Limited

Comparative Reach Analysis Sport Local Interest Global Interest 9 519 000 fans 3 742 hours TV coverage 1 165 000 000 fans 104 member unions Cricket 2 500 000 000 fans 270 million actively involved 207 member unions 11 319 000 fans 15 515 hours TV coverage Football 9 389 000 fans 4 699 hours TV coverage 60 000 000 fans 115 member unions Rugby 2 240 000 fans 4 380 hours TV coverage 100 000 000 fans 80 member unions Horse Racing Source: TWSM Report; BMI Sporttrack Reports Phumelela Gaming & Leisure Limited

Geographical Spread of Local Race Meetings Gauteng 65 race meetings Free State 69 race meetings Northern Cape 35 race meetings KZN 114 race meetings Eastern Cape 66 race meetings Western Cape 87 race meetings Phumelela Gaming & Leisure Limited

Vertically Integrated Model Staging of thoroughbred racing events : Phumelela Domestic Totalisator Betting : TAB International Totalisator Betting : PGE Fixed Odds Betting : Betting World Domestic Broadcasting : Tellytrack International Broadcast : Racing International Phumelela Gaming & Leisure Limited

Phumelela Gaming & Leisure Limited Group Brands Phumelela Gaming & Leisure Limited

PHUMELELA GAMING AND LEISURE Phumelela Gaming & Leisure Limited Divisional Structure PHUMELELA GAMING AND LEISURE BETTING (Tote and Fixed Odds) RACING CONTENT (TV, Web and Print) Branches Agents Racecourses Telephone betting Internet WAP International commingling Betting World Turffontein Vaal Kimberley Arlington Fairview Randjesfontein Tellytrack Local Broadcast International Broadcast (RUK) Computaform Computaform Express TAB Win Racing Express Tab Express Phumelela Gaming & Leisure Limited

SOCIO-ECONOMIC IMPACT OF LEGALISED GAMBLING Employment, Ownership & BBBEE   Although totalisator betting operations (including the operation of horse racing) account for the less than 10% market share of the gambling industry, it is responsible for the generation of tens of thousands of jobs in the industry, directly & indirectly Phumelela has a level A Empowerdex BBBEE rating, with 50.23% black ownership Directly employs 2 000 people Taxation &Fees The sector contributes significantly to the fiscus, with Phumelela having contributed over R 160 million in national & provincial taxes in the year ended 31 July 2009 (approximately R 200 million prior year). This does not include the various license fees payable to provincial gambling boards. Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 15 Phumelela Gaming & Leisure Limited

SOCIO-ECONOMIC IMPACT OF LEGALISED GAMBLING - Cont Regulated & Responsible Gambling Regulation & Compliance   The industry is highly regulated, with emphasis on player protection& the various gambling boards are strict in enforcing compliance National Responsible Gambling Phumelela, like most operators in the industry, contributes a percentage of their gross gambling income to the National Responsible Gambling Programme (“NRGP”) & implements various NRGP initiatives aimed at detecting & limiting the potential negative effects of problem gambling. NRGP figures indicate that the sector compares favourably to the global trends on problem gambling Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 16 Phumelela Gaming & Leisure Limited

IMPACT OF MISLEADING ADVERTISING Advertising is done in accordance with the national & provincial regulations on advertising aimed at ensuring that people are protected from misleading advertising Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 17 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT General  The gambling industry is South Africa is probably one of the most regulated globally, but needs to be reviewed to ensure a balanced approach - taking into account the commercial aspects of the operations as well Efficiency The current regulatory environment is less efficient with 9 provincial gambling boards & a national gambling board All with different standards & little cooperation Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 18 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT - Cont Efficiency (cont) This tends to significantly increase the costs of doing business &compliance overall Unnecessary, cumbersome & inefficient processes Phumelela has to deal with all provincial, mostly with different requirements & standards throughout Some provinces still regulate betting on the old ordinance, as their legislation has never been updated & this makes it even more difficult to operate properly in those provinces Different gambling tax, levies & fees regimes (e.g. different rates, on different revenue basis, excessive fees & tax rates in other provinces, etc). Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 19 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT - Cont     Tax rates by province Province Tax Rate Gauteng 6.5% on Take out Mpumalanga 2.5% on Turnover Limpopo 3.5% on Turnover North West Eastern Cape 10% on Take out Northern Cape 8 % on Take out Free State 3 % on Turnover Kwazulu Natal 1.5% on Turnover Western Cape 6.0% on Take out Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 20 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT - Cont (Unfair) Competition Overbearing regulation leads to lost opportunities & unfair competition For instance, the totalisator is required to submit new rules for approval by the gambling boards prior to introducing any new product & these tends to take a very long time to consider Bookmakers & the lottery are not subjected to this requirement Lottery can also open outlets anywhere, anytime Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 21 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT - Cont (Unfair) Competition (cont) – Open Bet Bookmakers currently allowed to offer the so-called “open bet”, that is, offering bets which were not “fixed odds” or using totalisator’s results & dividends as a basis for determining payouts This has effectively allowed them to “unlawfully” compete with the totalisator & utilize the totalisator’s intellectual property without due consideration The open bet is estimated to cost the totalisator & horse racing approximately R 200 million nationally Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 22 Phumelela Gaming & Leisure Limited

EFFECTIVENESS OF THE CURRENT REGULATORY ENVIRONMENT - Cont (Unfair) Competition (cont) – Open Bet This means that bookmakers do not adequately contribute to horse racing, while weakening the totalisator’s ability to fund horse racing Every R100 bet on the totalisator yields R20 on average for horseracing, of which about R6 goes directly into stakes (prize money for horse owners) In the normal course, a R100 fixed-odds bet with a bookmaker yields R2.70 for horseracing. This assumes a 10% profit for fixed-odds operators with them retaining R10 of every R100 wagered with them. Of the assumed R90 left over, R84.60 is returned to customers, with R2.70 for provincial taxation & R2.70 to horseracing in some provinces Open betting has also contributed to significant decline of totalisator revenue in Germany over past ten years. Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 23 Phumelela Gaming & Leisure Limited

Phumelela Gaming & Leisure Limited INTERACTIVE GAMBLING The delay in licensing & regulating interactive gambling may mean that South African operators have lost significant ground South Africans are already patronising available interactive gambling sites elsewhere Some of the proposed regulation on interactive gambling may render South African websites unattractive For instance, the proposed player registration process is too onerous compared to other jurisdictions. Numbers show our industry is not recession proof. Local operations impacted by economic climate and concomitant downturn in consumer spend coupled with inclement weather conditions. Half year local up 3% and international up 56%. International revenue growth driven by 9% increase in sale of broadcast rights and 76% increased in IOM Tote turnover. Betting World share of profit down by 43% to R2,4 M 17% ROI ASL share of profit R1 M 26% ROI Dividend cover policy of between 1.8 and 2.2 exceeded. Current dividend 1.4x cover. Div. Yield on R11 = 6% Cash reserves decreased by R44 M. WC increase R21,6 M, Tax R61,5 M, Div pd R51,6 M, Capex R33,5 M and share repurchases of R6,1 million. Capex spend includes R12 M at Turffontein (R3M new parade ring, upgrade of hospitality suites, security, carparks R3M night racing etc.) Split Vaal turf track R1M, IT and betting hardware R5,8 M, Betting retail outlets new and upgrades R7,4m 24 Phumelela Gaming & Leisure Limited

Thank You Questions and Answers MPHO RAMAFALO 25