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Multimedia Games Selected for Israel National Lottery

27 January 2005

AUSTIN, Texas -- (PRESS RELEASE) -- Multimedia Games, Inc. (Nasdaq: MGAM) announced today that it has been selected by Mifal Hapayis, the operator of the Israel National Lottery, to provide an Electronic Instant Lottery System ("EIL"). Pursuant to the agreement, Multimedia Games ("Multimedia") will sell Mifal Hapayis a complete gaming system, including central determinant system technology; management, test, monitoring, and accounting systems; on-site training; game themes; and delivery of an initial 500 EIL point-of-sale terminals to be deployed at 150 retail locations throughout Israel. The initial minimum value of the purchase and service agreement is approximately $8.5 million, which includes a one-year system warranty. The system and initial player terminals are currently scheduled to begin operation in the second half of Multimedia's 2005 fiscal year.

The contract was awarded following a competitive procurement process involving several other multinational lottery providers. Multimedia's central system for the Israeli National Lottery has been designed to support Mifal Hapayis' planned future expansion of the system to as many as 5,000 player terminals located in approximately 1,500 retail locations throughout Israel.

Clifton E. Lind, President and CEO of Multimedia Games, commented, "Our selection by Mifal Hapayis confirms the robustness and unique flexibility of our central determinant system technology, and extends our success in deploying this technology in new markets. The award is significant because it validates Multimedia's strategy of diversifying its sources of revenue by using the success of our lottery-proven central determinant system technology to win additional domestic and international video lottery contracts. Our selection by Mifal Hapayis, as well as recent domestic central system competitive procurements in which our system achieved the highest scores among all bidders for technology and system support, validates the strength of our technology, system engineering, and content development, as well as the talent embodied in our test, training, deployment and operations teams. We look forward to working with Mifal Hapayis to provide the Israel National Lottery with a scalable lottery system that will meet present and future electronic instant lottery needs, while providing an optimal interactive experience for its customers.

"This represents our initial win in an important, emerging market - delivery of instant lottery outcomes to remote locations. We plan to aggressively pursue other domestic and international opportunities for outcome distribution to both retail destinations, as in the Mifal Hapayis contract, and to a wide variety of communications channels for delivery to other types of remote locations."

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