VendingData Signs Deal with Dolphin Products

4 October 2005

LAS VEGAS – (PRESS RELEASE) -- VendingData(TM) Corporation (Amex: VNX), announced today that it has agreed to purchase all intellectual property ("IP") including global distribution rights for the current high frequency (13.56 MHz) RFID Chip within a Casino Chip technology from Australian-based Dolphin Products as well as all future generations of the technology, including but not limited to continuations and applications, trademarks, copyrights and trade secrets. Dolphin Products will become VendingData(TM)'s exclusive casino chip manufacturer.

Dolphin Products began designing and manufacturing traditional gaming chips in 1994 and has become a significant casino chip producer internationally. Dolphin began work on an RFID-enabled casino chip in 1995 using the 125 KHZ frequency. Due to the technical disadvantages and relatively high costs of the low frequency RFIDs, Dolphin began looking for a solution in the high frequency 13.56 MHz range, and was granted a patent in 2004 for their unique method of tagging a casino chip or token with a high frequency (13.56MHz) chip within a casino chip. To date, Dolphin Products is the only casino chip manufacturer that has designed a commercially viable, high frequency RFID casino chip, utilizing the Magellan microchip, which is regarded as the International Standard.

Dolphin Product's method of embedding or attaching an RFID to a gaming chip or token, provides significant cost advantages over the current method of encapsulating the more fragile, low frequency RFID chips currently available on the market. Process yields are higher and there are fewer manufacturing steps, which mean faster production times. High frequency chips offer dramatic improvements in speed and capacity, capable of processing data eight times faster than the current technology, reading 1,000 chips in a second with memory capacity of over 10,000 bits, which is five times the capacity of the nearest low frequency technology. The new generation RFID chip embedded in a traditional casino chip offers casinos a real-time data capability that enhances casino chip security, player tracking, accounting management and over all asset protection.

Dolphin Products currently has capacity to manufacture 60,000 units per week, with initial expansion capability to 200,000 units per week. Current estimates suggest that there will be approximately 10,000 RFID enabled tables over the next five years with approximately 4,000 casino chips on hand at each table, which translates into approximately $125 million over a five year timeframe, with a yearly addressable market projected at approximately $25 - 30 million.

Bill Purton, Managing Director of Dolphin Products and developer of the company's RFID-enabled casino chip commented, "We have designed a high- yielding, cost effective method to embed the very latest high frequency microchip into a traditional casino chip and estimate that we have substantial lead-time advantage over the current casino chip manufactures who use the low frequency RFID and are therefore straddled with legacy systems. We have a sense of urgency to establish our footprint and chose VendingData as our partner because they demonstrated a similar degree of determination and vigor to our own. And while casino operators now have the opportunity to greatly expand their data systems with the aid of our new high frequency casino chip, we have already begun to design future enhancements that will lead to further opportunities to advance the RFID IP."

VendingData(TM), as owner of the IP, will source the casino chips from Dolphin and distribute the RFID casino chips to the global market. Simon Herbert, VP of Sales will direct the global distribution of the chips through direct sales activity and international distribution relationships.

"Our objective continues to be to supply our growing distribution system with an expanding product line, offering unique leading edge IP and cost advantages to our customers. This relationship with Dolphin will enable us to continue to work with them to develop new products as well as leading edge enhancements to our current product lines. Entering the RFID casino chip market gives us the opportunity to address a large rapidly growing market with next generation IP and room for future technology enhancements," added Mark Newburg, Executive Director of VendingData(TM) Corporation. "We are currently accepting high frequency RFID casino chip orders and fully expect to begin recognizing revenue in early 2006."