Trends in e-COMMERCE For State and Governmental Lotteries SMART-TECH 2010 March 24, 2010

Slide 2 THE LOTTERY and the INTERNET DESPITE FEDERAL ENFORCEMENT ACTIVITIES, OFFSHORE e- GAMING AND PRIVATE LOTTERY SERVICES HAS EXPANDED SIGNIFICANTLY 11% PER YEAR TO APPROX. $30BILLION IN 2010 DESPITE FEDERAL ENFORCEMENT ACTIVITIES, OFFSHORE e- GAMING AND PRIVATE LOTTERY SERVICES HAS EXPANDED SIGNIFICANTLY 11% PER YEAR TO APPROX. $30BILLION IN 2010 US RESIDENTS ACCOUNT FOR OVER 40% OF e-GAMING REVENUES; THESE ARE SALES (>$12 BLN) COULD BE MONETIZED BY STATE LOTTERIES US RESIDENTS ACCOUNT FOR OVER 40% OF e-GAMING REVENUES; THESE ARE SALES (>$12 BLN) COULD BE MONETIZED BY STATE LOTTERIES UIGEA AND PROSPECTIVE FEDERAL LEGISLATION REGULATING UIGEA AND PROSPECTIVE FEDERAL LEGISLATION REGULATING e-GAMING CREATES A UNIQUE OPPORTUNITY FOR STATE LOTTERIES TO RE-PATRIATE THESE CUSTOMERS

Slide 3 Getting to Know Online Gamblers

Slide 4 State and Governmental e-Commerce Success Stories Veikkaus (Finish National Lottery ) Veikkaus (Finish National Lottery ) Approximately 22% of their sales comes from their e-commerce channel ‘OnNet’ (Lotto, Keno & Fixed Odds Betting); over 1 million registered customers Approximately 22% of their sales comes from their e-commerce channel ‘OnNet’ (Lotto, Keno & Fixed Odds Betting); over 1 million registered customers Camelot (U.K. National Lottery) Camelot (U.K. National Lottery) >12% of their sales come from their e-commerce channel; low cost client acquisition rate & high retention rate; multi channel players are averaging > $ 600 per year >12% of their sales come from their e-commerce channel; low cost client acquisition rate & high retention rate; multi channel players are averaging > $ 600 per year The New York Lottery The New York Lottery Launched e-subscription on their website; full launch in 2011 for all ‘numbers’ products Launched e-subscription on their website; full launch in 2011 for all ‘numbers’ products

Slide 5 TECHNOLOGY AND POLITICS …TODAY Unlawful Internet Gambling Enforcement Act of 2006 (‘UIGEA’) provides substantive guidance for state lotteries to operate on the internet Unlawful Internet Gambling Enforcement Act of 2006 (‘UIGEA’) provides substantive guidance for state lotteries to operate on the internet That being said, many would like to see some affirmative comment from the DOJ; there is a unique opportunity for several states to align their interests to clarify the DOJ position That being said, many would like to see some affirmative comment from the DOJ; there is a unique opportunity for several states to align their interests to clarify the DOJ position To the extent that e-gaming is regulate in prospective legislation, we believe that a significant majority of state lotteries will have a unique supervisory position for intrastate e-gaming (similar to what we see for VLT’s) To the extent that e-gaming is regulate in prospective legislation, we believe that a significant majority of state lotteries will have a unique supervisory position for intrastate e-gaming (similar to what we see for VLT’s)

THE NEW PLAYER DEMOGRAPHIC (AGES 18-30) Top Social Gaming Sites Zynga Zynga Playdom Playdom MySpace MySpace Yahoo Games Yahoo Games Top On-Line Skill Gaming Sites King.com WorldWinner GameColony.com Orange Shark N.B. there are 9 million skill games played worldwide daily Slide 6

e-Gaming Activity in the U.S. (Page Impressions or ‘HITS’) DOMAIN MARKET SHARE DOMAIN MARKET SHARE 1. King.com 8.9 % 2. WorldWinner 6.5 % 5. FreeSlots 3.1 % 6. DC Lottery 2.7 % 7. Lottery Post 2.7 % 10. New York Lottery 2.1 % 10. New York Lottery 2.1 % EGAMING REVIEW 1/2010 Slide 7

e-COMMERCE SALES PROJECTIONS 2009 Salese-Commerce Sales 2009 Salese-Commerce Sales (000,000’s) in Year 5 (000,000’s) in Year 5 California $ 2,994 $ 450 MLN Georgia $ 3,676 $ 275 MLN Illinois $ 2,161 $ 245 MLN Illinois $ 2,161 $ 245 MLN New Jersey $ 2,575 $ 290 MLN New York $ $ 760 MLN Pennsylvania $ 3,050 $ 345 MLN La Fleur’s and eLOTTERY internal estimates La Fleur’s and eLOTTERY internal estimates 8

THE e-COMMERCE COMPETITION Traditional ‘On-line’ Vendors GTECH ---- G2 (formerly Boss Media and other rollups) SGMS ---- SciPlay (JV with Playtech) Intralot ---- CyberArts (35 % with control rights) New ‘Cutting Edge’ BetwareeLOTTERY Harrah’s Interactive Manaccom New Media Lottery Walker Digital (Group Play ) Slide 9

Subscription System PlayersDevelopers DBA's System Operators Management No access to source code Key roles password protected Database encrypted Independent code reviews No access to production system No sensitive client processes ASP.NET Security Best Practices Third Party Transaction verification No access to source code Key roles password protected Database encrypted Audited and Certified by Online Game Provider

Slide 12 e-Commerce Summary DEMAND FOR AN e-COMMERCE CHANNEL IS AT AN ALL TIME HIGH FROM YOUR EXISTING PLAYER BASE AND A NEW DEMOGRAPHIC (THE AGE GROUPS) DEMAND FOR AN e-COMMERCE CHANNEL IS AT AN ALL TIME HIGH FROM YOUR EXISTING PLAYER BASE AND A NEW DEMOGRAPHIC (THE AGE GROUPS) OVER A 5 YEAR PERIOD, WE BELIEVE THAT AN e-COMMERCE CHANNEL CAN INCREASE LOTTERY SALES BY 15% AT NO COST TO YOU AND IN A WAY THAT IS COMPLEMENTARY TO YOUR TRADITIONAL SALES CHANNELS OVER A 5 YEAR PERIOD, WE BELIEVE THAT AN e-COMMERCE CHANNEL CAN INCREASE LOTTERY SALES BY 15% AT NO COST TO YOU AND IN A WAY THAT IS COMPLEMENTARY TO YOUR TRADITIONAL SALES CHANNELS STATE AND PROVINCIAL LOTTERIES SHOULD MAINTAIN BEST OPERATING STANDARDS AND INTERNAL CONTROLS BY SEPARATING THE WHOLESALER (i.e.‘ON-LINE PROVIDER) FROM THE e-RETAILER SALES FUNCTIONS STATE AND PROVINCIAL LOTTERIES SHOULD MAINTAIN BEST OPERATING STANDARDS AND INTERNAL CONTROLS BY SEPARATING THE WHOLESALER (i.e.‘ON-LINE PROVIDER) FROM THE e-RETAILER SALES FUNCTIONS THE ‘GO-FORWARD’ DECISION MUST BE MADE BY THE LOTTERY

Slide 13 e-Commerce System is Covered by eLOTTERY’s Patents & Intellectual Property Patent # 6,322,446 (filed in 1999 ) Patent # 6,322,446 (filed in 1999 ) A system and method for operating on- line state lottery games over the internet Patent # 6,383,078 Patent # 6,383,078 A system and a method is provided for facilitating on-line lottery games over the Internet which receives caller ID information Patent # 6,869,358 Patent # 6,869,358 Broadens prior intellectual property to include instant games that are sold from the computer desktop and adds subscription services as an additional sales vehicle above and beyond a direct sale of services on the internet Received e-Commerce Patents in Canada, Australia and China and patents have been filed and are pending in India, Mexico & Europe Received e-Commerce Patents in Canada, Australia and China and patents have been filed and are pending in India, Mexico & Europe