ISWI Develops Interactive Betting System

14 October 2004

WEST PATERSON, New Jersey – (PRESS RELEASE) -- Interactive Systems Worldwide Inc. (Nasdaq: ISWI) announced today that it had completed the development of the interactive television version of its SportXction(TM) play-by-play betting system, a pivotal milestone necessary for the upcoming commercial launch.

The new software system enables a seamless interface between SportXction(TM) and the satellite television broadcast of its first interactive television partner. This version has recently been delivered to the customer and is presently undergoing its pre-live system tests, which are to be followed directly by the live broadcast test required to gain approval for use of the product in television broadcasting.

This accomplishment is of enormous importance to the company. The huge potential of the interactive television gambling market was highlighted in the September 2004 issue of International Gaming and Wagering Business (IGWB), the leading industry publication. The article, titled "Beyond the PC. Television, mobile phones promise to redefine the meaning of gambling." The article notes the pivotal role that interactive television plays not only in expanding gambling through the rapid consumer adoption of interactive television, but also its naturalness and ease of use.

KPMG and Screen Digest Report both estimate that by 2007 iTV will generate approximately one half of the $5 billion in online revenues. The article also commented upon the ability of gambling to add to the entertainment experience of television. This is of particular significance to ISWI as it verifies the company's view that its play-by-play game, with its frequent small bets as the sport proceeds, is primarily an entertainment experience for the player.

Mr. Barry Mindes, Chairman and CEO of ISWI, stated, "The completion of the development of this unique product ranks as our corporation's most notable achievement to date, paving the way for the anticipated launch. When this product is introduced into service, as many as 10 million television sports fans will have the ability to register to bet through wagering accounts during the course of a sporting event, using their television remote controls."

Mr. Mindes continued, "We are encouraged by the recent trends and prospects for interactive television gambling identified in the September issue of IGWB. We believe that SportXction(TM) will lead the way in amplifying the entertainment experience of sports fans by allowing them to have a tangible interest in the event as it unfolds. This will open the potential audience for SportXction(TM) to a far greater population than just traditional sports gamblers. Acceptance by even a small proportion of this expanded potential wagering audience could lead to a very substantial new market, resulting in enhanced shareholder value."

SportXction(TM) is a patented, real-time, software system, which allows a player to make play-by-play wagers on a sporting event while the event is in progress. Wagering may be conducted while viewing a live or televised sporting event, or listening to it on the radio. The wagers offered are mostly oriented to short-term action, for example, is the penalty kick successful, is the next play a run or a pass, is the next pitch a ball or a strike, does the shooter make two foul shots, and many more. The wagers have odds associated with them, which relate to the probable outcome of the proposition being wagered upon, and the odds are adjusted in real time to balance the pool using proprietary artificial intelligence software to reflect player sentiment, as derived from the betting patterns. The system can be used with virtually any sport. For more information please visit http://www.isw.com.