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MDI Entertainment Previews Record Quarterly Revenues and Profits

Revenues for the quarter are expected to exceed $3,100,000, with an EBITDA over $650,000 and net profits in excess of $550,000, or $.05 per share.

This quarter is the first in MDI's new fiscal year which was changed effective January 1, 2001 to a calendar year. Revenues for this quarter alone exceeded the $2,876,276 the Company recorded for the entire 7-month stub period which ended on December 31, 2000. The Company filed its 10KSB for that stub period on April 2, 2001.

``This quarter marks MDI's return to substantial profitability,'' stated MDI President & CEO Steven M. Saferin. ``Since last summer, management has worked diligently on growing our core business and the results we expect from the first quarter demonstrates we are beginning to show results from that work.''

Saferin continued, ``But it is only the beginning. The strength of our brands, our relationships with our customers and the success of our games have helped us build a substantial backlog of business that should result in record revenue and profits for the entire fiscal year. In addition, the combination of our expected first quarter profits and the voluntary conversion by our strategic partner, Scientific Games, of subordinated debt to equity, as well as other transactions, will improve our balance sheet by over $1.2 million.''

Saferin added, ``We continue to work closely with Scientific Games, a wholly owned subsidiary of the Autotote Corporation (AMEX: TTE - news) on growing our core business both domestically and now also internationally. In addition, our alliance with eLot, Inc. (NASDAQ: ELOT - news) has provided us the opportunity to offer several of our customers cutting edge Internet applications for our games.''

Continuing, Saferin said, ``Management and the entire MDI team is committed to meet any challenge and explore every opportunity to increase shareholder value. While we believe our future is bright, we are not complacent and will continue to work diligently to execute our business plan. With that in mind, we continue to expand our business globally with our first contract outside North America in New South Wales and our securities trading on the Berlin Stock Exchange under the symbol MDH.''

Popular Lottery scratch games and ``turn-key'' promotions designed around Wheel of Fortune, Jeopardy! Elvis Presley and Graceland, Harley-Davidson® and many other brands and cultural icons are offered to government sponsored lotteries through MDI's exclusive licensing programs.

Motorcycles, dream trips, game show auditions, merchandise packages and other exotic prize giveaways can be customized for a state, region or time of year, adding value to the games. MDI revolutionized the lottery industry with its introduction of second-chance merchandise prizes.

MDI's wide array of services include game and ticket design, merchandise prize fulfillment, management of second-chance draws, a fully-staffed customer service line, coordination of winner travel and accommodations, advertising and marketing support, consumer research and Internet marketing and advertising.

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