PacificNet reports update

25 January 2008

1. PacificNet's Take1 subsidiary has completed the delivery of 2000 gaming machines to a leading European gaming operator. We anticipate continuous strong demand for our gaming machines for the European gaming market and repeat orders.

2. PacificNet reports new multi-player gaming machine sale in Macau, China, to a leading operator.

3. PacificNet and Octavian both reported stronger than expected customer turnout, new sales in the pipeline and signing of new gaming machine orders as a result of its successful gaming product launches at the International Casino Expo in London (ICE Booth 3230), the leading gaming expo in Europe which is in progress this week.

4. On January 22, 2008, PacificNet and Octavian jointly held a completion ceremony at the International Casino Expo and completed the delivery of shares for the completion of PacificNet's acquisition of 100% ownership of Octavian International Limited ("Octavian"), a worldwide supplier of gaming technology, solutions and systems.

Following the signing of a definitive agreement with Octavian on December 7, 2007, due diligence was successfully completed within four weeks and all the share exchanges for the acquisition were completed on January 23, 2008. As part of the closing, in return for receiving 100% share ownership of Octavian International, PacificNet issued 2,330,000 restricted shares of PACT representing approximately 19.5% of PacificNet's outstanding shares, which will be held in an escrow account and will be released in accordance to the payment and earn-out schedule in the Acquisition Agreement. According to Octavian's financial reports as audited by Grant Thornton UK LLP under UK GAAP, Octavian had revenue of approximately $64.6 million, gross profit of approximately $18.4 million, EBITDA of approximately $6.2 million USD, and pre-tax profit of approximately $5.5 million, for the fiscal year ending Dec 31, 2006. This acquisition is expected to increase PacificNet's overall gaming revenues and profits. The combined company will focus on the high-margin gaming technology business with a global presence and anticipates combined 2008 projected annual revenue of $116 million, Gross Profit of $38 million and EBITDA of $13 million subject to securing additional funding or equipment financing. As of January 15, Octavian had already secured 33% of its projected orders for 2008 (representing 19% of combined Octavian and PacificNet revenues for the year). Furthermore, Octavian's projected figures for 2008 are currently based only on sales revenue from its existing markets in Europe, CIS and Latin America. Octavian's projections for 2008 do not take into account sales of its existing games and systems into new markets, such as the Asia-Pacific region.

Octavian will continue operating under its current name as a wholly-owned subsidiary of PacificNet and will continue to pursue its global growth strategy as a leading provider of gaming technology. Harmen Brenninkmeijer will become an Executive Director of PacificNet and a member of the board of directors, and continue to serve as CEO of the Octavian subsidiary within PacificNet's gaming division. Furthermore, upon completion of the earn-out provisions and profit targets as defined in the acquisition agreement, Harmen Brenninkmeijer would become President of PacificNet's Global Gaming Division. Sterne Agee has been appointed as the financial advisor for Octavian for this transaction.

Octavian, which maintains worldwide headquarters in Guildford, United Kingdom, develops and markets innovative games and systems and sells its gaming solutions in over 30 countries including Russia, Italy, Germany, Ukraine, Colombia, Bolivia, Mexico, Argentina and South Africa. It also distributes gaming machines and equipment from many of the world's leading gaming brands through its OctaSupplies division. The company's own games and systems include the DreamGames portfolio of casino video slot games, AWP games, downloadable/VLT games and systems for gaming and lottery operations, and ACP (Accounting, Control, Progressives) slot management systems. Octavian is one of the largest independent suppliers of back-end systems to casinos.

PacificNet is a leading provider of gaming and mobile game technology, e- commerce, and Customer Relationship Management (CRM) solutions in China. Its gaming clients include leading hotels, casinos, and gaming operators in Macau, Asia and Europe. PacificNet's products include multi-player electronic table games, roulette machines, Server-Based Games (SBG) with multiple client betting stations, slot and bingo machines, Video Lottery Terminals (VLTs), Amusement With Prizes (AWP) machines, gaming cabinet and client/server system designs, online i-gaming software design and multimedia entertainment kiosks. Through its China subsidiary, PacificNet is also a legally licensed provider and sales agent for the legalized welfare lottery gaming in the Peoples Republic of China. PacificNet currently sells its gaming products and solutions in dozens of countries worldwide with a strong focus on Asia.

Commenting on the deal, Tony Tong, CEO of PacificNet, said: "We are delighted that this acquisition has been completed so smoothly. Great synergy exists between PacificNet and Octavian and we are confident that we can harness this to help us garner long-term, high-margin, recurring revenue contracts in emerging gaming markets worldwide. In today's uncertain market, we are very confident in our current direction."

Harmen Brenninkmeijer, CEO of Octavian, added: "We are very excited by the strong customer turnout at our exhibition booth and the signing of several new gaming machine orders with revenue sharing participation at the International Casino Expo this week in London. As part of PacificNet, we believe that Octavian is extremely well placed for strong growth in existing and new markets. In addition, Octavian adds market-leading technology, software and experience in the rapidly-expanding lottery market to the PacificNet portfolio."

"We are delighted to hear the warm reception to our new product launches and are happy to announce new orders placed at the ICE London this week," added Victor Tong, President of PacificNet. "Working with Octavian will allow PacificNet to accelerate its gaming expansion and sharpen its focus in the high-margin gaming technology business, where we see huge potential for growth."