Holiday Inn Macau chooses PacificNet Games

5 December 2006

BEIJING, China – (PRESS RELEASE) -- PacificNet Inc. (Nasdaq: PACT), a leading provider of Customer Relationship Management (CRM), mobile internet, e-commerce and gaming technology in China, reported today that its PacificNet Games Limited (PacGames) subsidiary has been selected by Holiday Inn Macau Casino to provide multi-player electronic gaming machines. Terms of the agreement were not disclosed due to competitive reasons.

Located at 82-86 Rua de Pequim, The Holiday Inn is right in the heart of Macau's casino district, with the Casino Lisboa to the west and the Vegas- style Sands casino and the Fisherman's Wharf entertainment area to the east. To the north is old Macau, where Largo do Senado (Senado Sq), the Ruins of St Paul's, Macau Museum and the canyon-like lanes remind you that Macau is different to anywhere else in Asia, and on earth.

"The selection of PacificNet Game's electronic gaming machines by the leading hotel-casinos in Macau marks the beginning of PacificNet's transition away from the low-margin telecom business into the new high-margin gaming business," said Tony Tong, Chairman and CEO of PacificNet. "In recent board and management meetings, we evaluated the early success of our gaming technology operation and were satisfied with the rapid progress and financial performance of the gaming operation. The management team and the board of directors have approved our new strategy to focus on the rapidly growing gaming market in greater China, Macau, and Asia. We have excellent existing relationships in Macau and we will continue to very actively pursue this area. After some early success, we believe that we are well positioned to expand our sales of gaming products to the hotel-casino operators in Macau and rest of Asia."

In September, PacificNet opened an office in Macau to focus on the rapidly expanding gaming and entertainment industries in that region. The Macau office is located in the First International Commercial Centre, Macau Special Administrative Region, China, is adjacent to the new Galaxy StarWorld Hotel and is walking distance from both the Wynn and Sands Casinos.

"Macau has become the fastest growing part of China and we are very excited to be moving forward in our pursuit of the Macau gaming technology business," said Victor Tong, President of PacificNet. "The opening of our Macau office will facilitate our rapid launch into this market. We feel that the Asian gaming technology market has near-term growth potential and are very happy to enter this exciting high growth market. We recognize Macau's remarkable growth potential and have opened an office in this location as a first step in entering this market. The bulk of Macau's current gaming revenue comes from VIP rooms and high-roller table games. As the market matures, it is predicted that lower stakes, electronic versions of these popular table games played by the masses will exceed the revenue of the table games, as in Las Vegas. This trend is already visible. PacificNet plans to aggressively pursue this mass market of electronic gaming machines with the goal of being a leading provider of electronic adaptations of popular Asian casino table games."

According to recent statistics provided by the Macau government, Macau is one of the fastest-growing gaming markets in the world and is predicted to surpass Las Vegas in total revenues by 2007. In 2005, Macau's gaming revenues reached US$5.8 billion, second only to Las Vegas gaming revenues of US$6 billion. Macao's casinos offer the largest variety of casino games anywhere in the world, combining both established western favorites with popular eastern games such as blackjack, baccarat, pai kao, roulette, boulette, boule, "Big and small" fantan and pacapio. A vast assortment of slot machines and a growing number of electronic table games are also available, often computer- linked for progressive jackpot payouts. The number of hotel-casinos in operation and in development in Macau continues to grow, including well-known Chinese names such as Galaxy and Melco, and famous Las Vegas names such as the Sands, the Venetian, and the newly opened Wynn Resort, which celebrated its grand opening on September 6. With the disposable income of the average Chinese on the rise, Macau's gaming and entertainment market is expected to grow for years to come. Macau is the only area in China where gambling is legal.