Leisure & Gaming Plc Acquisition of
BetShop Group (Europe) Limited (“BSG”)

LONDON -- June 19th, 2006 -- Leisure & Gaming, the AIM quoted interactive betting and gaming company, is pleased to announce that it has entered into a conditional agreement (the “BSG Acquisition Agreement”) to acquire BetShop Group (Europe) Limited (“BSG”) for a total consideration of up to £32.06 million. The acquisition of BSG is due to complete on 23 June 2006.

BSG is a European online sportsbetting and casino gaming business, headquartered in London. The acquisition represents a significant expansion of Leisure & Gaming’s online business reach in Europe through the BetShop.com website and the group’s land-based affiliate network, particularly in Italy.

The BetShop.com website operates in 8 European languages on the company’s proprietary sportsbetting software platform. The company also operates the GoalsLive.com online sports information and results portal. In Italy, the company’s innovative marketing and business development is driven by a network of over 600 retail sites. Each of these betting shops are licensed by the Italian government and branded BetShopItalia.

BSG is headquartered in London and was established by Gabriel Chaleplis, the former marketing director of Eurobet, which was subsequently acquired by Coral to form Coral Eurobet.

In the year ended 30 June 2005, BSG recorded revenues of approximately £74.54 million and EBIT of approximately £0.85 million. As at 30 June 2005, net assets amounted to £0.56 million. In the second half of 2005 BSG substantially restructured and expanded its operations and moved to reporting on a calendar year. In the three months to 31 March 2006, BSG recorded EBIT of approximately £0.42 million.

Initial consideration payable is up to £12.69m in a mixture of cash and shares. The full additional consideration of £19.37m is payable subject to the business achieving its maximum EBIT earn out targets for the years ending 31 December 2006, 2007 and 2008 of £2.65m, £5.20m and £7.25m respectively. Further details of the terms of the BSG Acquisition Agreement are set out below.

Alistair Assheton, Chief Executive of Leisure & Gaming said:

“Through the acquisition of BSG we substantially strengthen our European offering and further diversify our global revenues, in line with our stated strategy. In addition to acquiring Italy’s largest independent network licensed sports betting group, the transaction will be earnings enhancing in its first full year and provides Leisure & Gaming with the European management team and foundation business to realise our objectives in the European interactive gaming market. We very much look forward to working with Gabriel Chaleplis and his team in developing L&G’s presence in Europe. Leisure & Gaming continues to perform in line with market expectations and a trading statement will be issued at the AGM on 22 June.”

Gabriel Chaleplis, Chief Executive of BSG said:

“Leisure & Gaming has executed a successful consolidation strategy which we are excited about joining. The combined management, expertise and assets of BSG and the broader Leisure & Gaming businesses will help further accelerate our European development, where we are already the region’s fourth largest branded operator of licensed betting shops, per our land-based affiliate strategy – alongside the continued development of the online BetShop.com business.”


For further information call:

Alistair Assheton, Chief Executive
Leisure & Gaming plc

Josh Joshi, Chief Financial Officer
Tel: 020 7248 6343

Jonathon Brill/Billy Clegg
Financial Dynamics
Tel: 020 7831 3113

Terms of the BSG Acquisition Agreement

Pursuant to the BSG Acquistion Agreement, Leisure & Gaming has conditionally agreed to acquire BSG from the Seller for a total consideration of up to approximately £32.06 million. The acquisition of BSG, the cash elements of which will be funded out of a mixture of bank debt and existing cash resources, is conditional on admission of the Initial Consideration Shares (as defined below) to trading on AIM (“Admission” or “Completion”). Admission is expected to become effective on [23] June 2006.

Initial consideration of up to £12.69 million is payable, comprising (i) £10.74 million which is due on Completion and will be satisfied by the payment of approximately £4.87 million in cash and by the issue of 3,788,639 new ordinary shares in the capital of Leisure & Gaming (“Initial Consideration Shares”); (ii) up to £1 million of which will become due pending, inter alia, on the determination of the net cash position of BSG as at Completion; and (iii) a further payment of approximately £0.95 million (to be satisfied in equal proportions of cash and by the issue of new ordinary shares in the capital of Leisure & Gaming (“Ordinary Shares”)) which will be deferred for up to 18 months from Completion for the purposes of satisfying any claims by Leisure & Gaming under the BSG Acquisition Agreement or related transaction documents.

Additional consideration of up to, in aggregate, £19.37 million is payable by the issue of loan notes (guaranteed on issue) to the Seller. For additional consideration to become payable the minimum EBIT for BSG for the three years ending 31 December 2006, 31 December 2007 and 31 December 2008 must be £1.45m, £2.6m and £5.0 million respectively. For the
maximum additional consideration of £19.37m to be payable the maximum earnout targets of £2.65m, £5.2m and £7.25m respectively, must be met or exceeded. Leisure & Gaming is entitled to satisfy up to 50 per cent. of such additional consideration by the issue of Ordinary Shares.

The Seller has agreed to certain restrictions in relation to its dealings in Ordinary Shares including, subject to certain exceptions, not to dispose (or agree to dispose) of any Initial Consideration Shares prior to the first anniversary of Admission.