Playtech Reports Results for Q2 2006

NICOSIA, Cyprus – (PRESS RELEASE) – Highlights:

- Total Revenues for the quarter increased by 133% compared to the same period last year and 22% on the previous quarter to $25.4 million

- Casino Revenues for the quarter increased by 121% compared to the same period last year and 21% on the previous quarter to $22.0 million

- Poker Revenues for the quarter increased by 701% compared to the same period last year and 30% on the previous quarter to $2.7 million

- As of 30 June 2006, Playtech had 42 active licensees operating a total of 137 game sites, representing an increase of eight new licensees and an addition of 34 new game sites compared to the same period last year and an increase of four new licenses and 22 new game sites on the previous quarter

- Significant progress made in new products and platforms development - Videobet, Mobile and Mahjong - enhancing Asian market appeal

- Percentage of player income from the USA continued to decrease - reduced to 48% from 58% over the same period last year and from 49% in the previous quarter

- Continuing focus on Asian and European markets. Asian revenues increased 17% during the second quarter compared to the first quarter of 2006 and European revenues increased by 33% over the same period

Commenting on today's trading update, Avigur Zmora, CEO of Playtech said: "Playtech has shown very strong growth over the past quarter. Both Casino and Poker revenues continue to grow and our policy of geographical diversification continues on track. It is also very encouraging to see the progress in our development pipeline. We look forward to the second half of the year with confidence."

Second Quarter Trading Update

Playtech has continued to experience very strong trading in the second quarter across the Company, despite this period being a traditionally weak quarter in the online gaming industry. Revenues from Casino, Playtech's core product, continued to grow faster than the market owing to the high number of new licensees joining the company and the strong performance of existing licensees.

Poker revenues, currently 11% of total revenues, showed a significant increase over Q2 2005, clearly illustrating the effectiveness of the Company's effort to diverse its product offering. The poker network, iPoker, is gaining popularity and reached a peak of more than 11,000 concurrent players during the period.

Licensees

New licensees continue to be signed up, which, in line with the Company's strategy of geographical diversification, predominately cater for the Asian and European markets. Playtech also continues to work with its existing licensees to create unique branding and marketing options by adding new games and game sites.

During the second quarter the Company launched four new licensees, compared to two in the first quarter of 2006 and three in the second quarter of 2005. 22 new game sites were also added for both existing and new licensees in this quarter, compared to six in the first quarter of 2006 and 13 in the second quarter of 2005. The vast majority of Playtech's new licensees' pipeline caters for the Asian and European markets.

Geographical diversification

The Company continues to add high quality licensees from around the world with a focus on Europe and Asia. The percentage of players' income contribution attributable to non-US players has increased during the second quarter.

Management expects Asia to continue growing its percentage of total revenues starting in the fourth quarter helped by the release of specific games targeting Asian players and the launch of new licensees which have been postponed until after the World Cup.

Playtech continues to maintain its strategy of creating a more balanced geographical business portfolio. As a result over the past six months it has launched two licensees catering for Asia, three licensees catering for Europe and one licensee catering for North America.

Product and platform expansion

Playtech continues to develop products for specific markets worldwide.

Developments in the following products are of note in the second quarter. - Videobet

Playtech has completed the development of its software for interactive video terminals and expects to install its software for the first machines during the third quarter. This marks the Company's first move into land based gaming markets and allows it to extend the expertise and game portfolio it has developed with its online casino products. It should be noted the Company does not intend to build or produce the terminals themselves at this stage, but to focus on providing the software. - Mobile

Playtech has launched its first real money mobile application as part of its unified platform, supporting five of its top 2006 online casino games. The management believe that there is significant potential for this application in a number of countries, most notably in Asia, and is working closely with its Asian licensees in preparation to launch a fully operative customize product for this market by the end of 2006. - Mahjong

As part of its strategy to further penetrate the Asian market, Playtech has signed an agreement in the second quarter to license exclusive intellectual property rights to elements of the Mahjong game. Playtech believes that this new intellectual property will create a strong competitive edge over competing products in the region. The Company aims to launch the first phase of its Mahjong product by the end of 2006 and will make further announcements in due course.

Current trading

We enter the third quarter with confidence. Diversification of the product portfolio and international expansion remains a key element of the Company's strategy. Playtech is on the verge of launching a number of new client sites.

New country and region specific products are close to completion and we expect to announce the sign up of new licensees and expect the new products and platforms, including videobet, mobile, Mahjong, along with other Asian games, to start generating revenue by the end of the year.