1. 1 INFLIGHT GAMBLING A Presentation by: Gordon Stevenson Marketing and Business Development,

2. 2 Agenda The Origin of Inflight Gambling (IFG) Feasibility of new vs. old IFG systems Technical Requirements for IFG Marketing and Social Positioning Legal Considerations Revenue Distribution Conclusion

3. 3

4. 4 The Origin of Inflight Gambling (IFG) In The 80’s Enthusiastic passenger participation Success led to demise

5. 5 Feasibility of new vs old IFG systems Cabin crew involvement Graphics Data Storage Encryption Receipt Printing

6. 6 Technical Requirements for IFG 1 Platforms Airborne: IFE and satcom Terrestrial: Ground Communication servers, transaction processing 2 Minimum Specifications Interactive IFE platform (handheld or installed) with card reader Must have persistent storage and data offload capabilities Networking and satcom optional 4 Memory Minimum 4 MB RAM at passenger unit Amount of RAM determines graphics and sound effects 3 Storage Strong encryption Mirroring (where capable) No personal data stored 5 IFE Hardware Most existing IFE systems support some level of IFG Some more capable than others (hardware-based encryption, better CPU)

7. 7 Onboard IFG system Satcom Ground server and backup server Credit Card Transaction Processing Reporting and customer support

8. 8 Marketing and Social Positioning Brand Objectives and Positioning Advertising and Promotion Demographics Entertainment Option

9. 9 Legal Considerations

10. 10 USA Department of Transportation Jurisdiction Legislation Gambling Environment Taxation Identification Gambling Licenses Legal Considerations

11. 11 Revenue Assumptions B747 with 340 seats Load factor: 75% Potential annual yield of $ 413,100 from this aircraft Environment StatisticsRevenue Game participation: 10% Average Length of play: 1.5 hours Average: 200 bets/hour Average bet: $1

12. 12 Revenue Distribution - - - - = Distribution of Profit Net Revenue Taxes Fees for data offload Credit Card Transaction Fees Other Shared Costs (ATP, Customisation) Gross Revenue

13. 13 Billions of Dollars 2005 World-Wide Internet Gambling Revenues Market Comparison Millions of Dollars US Department of Transportation Inflight Gambling revenue estimate Billions of Dollars Mobile Online Gambling

14. 14 Conclusion Low Stakes Gambling = Airline Revenue Enrich/Excite the Existing IFE Program Safe and Secure Environment Cost-effective Installation Low stakes gambling is a win-win situation for both passenger and the airline.

15. 15