PacificNet acquires more PacGames shares

12 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, today announced it has acquired an additional 6% interest in PacificNet Games Limited (PacGames). Prior to this, in connection with the acquisition of Able Entertainment previously announced during the Q3 earnings conference call, PacificNet owned 45% of PacGames. PacificNet now owns 51% of PacGames.

"This additional investment in PacGames enhances PacificNet's entry into the new high-margin gaming technology 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 very satisfied with the rapid progress and financial performance of the gaming operation. The board of directors and management team has approved our new strategy to focus on the rapidly growing gaming market in greater China, Macau, and Asia."

In September 2006, 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 First International Commercial Centre, Macau Special Administrative Region, China, and is adjacent to the new Galaxy StarWorld Hotel and is minutes from both the Wynn and Sands Casinos.

"We are happy with the progress of our gaming technology business. The recent selection of PacificNet Game's electronic gaming machines by the Holiday Inn Macau Casino marks our successful entry in the Asian hotel-casino market," said Victor Tong, President of PacificNet. "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. We recognize Macau's remarkable growth potential and plan to aggressively pursue this mass market with the goal of being the leading provider of electronic gaming machines for the Asian gaming market."

Macau is one of the fastest-growing gaming markets in the world and is predicted to surpass Las Vegas in total revenues by 2007. According to recent statistics provided by Macau government, in 2005, Macau's gaming revenues reached US$5.8 billion, second only to Las Vegas gaming revenues of US$6 billion. Macau borders Zhuhai City of Guangdong Province of China, one of the country's wealthiest and most developed regions and is an hour away from Hong Kong via ferry. The number of tourists visiting Macau reached 18.7 million in 2005, of which 56% or 10.5 million visitors were from mainland China. By 2010, the number of tourists is expected to double to nearly 30 million visitors per year. Approximately one billion people live within a three-hour flight of Macau. Numerous hotel, gaming, and other projects are in the works in Macau which are expected to add over 10,000 guest rooms and over 20,000 live entertainment seats in eight separate venues. 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.