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Youbet.com Reports Q3 Results

Increased wagering activity among Youbet Network members contributed to quarterly revenue growth of 23 percent.

``Youbet.com continued to make progress during the third quarter in terms of revenue growth and a reduction in losses,'' said Robert Fell, chairman and chief executive officer.

``We are further enhancing our domestic horse-racing operations with the upcoming launch of our Web-based product, which offers unique features and technological advantages for our Network subscribers, along with easier and faster accessibility. We expect growth in our subscriber base to ramp up when this new product becomes available during the first quarter of next year.

``Technological development remains a strong focus as we leverage our racing infrastructure to build applications for a wide range of sports, gaming and entertainment,'' Fell continued. ``Our focus on global expansion and branding continues to be a primary objective as we grow our operations.''

Quarterly and Year-to-Date Operating Performance:

Revenue for the third quarter of 2000 totaled $1.4 million, an increase of 23 percent over revenue of $1.1 million for the third quarter of 1999.

The company narrowed its third-quarter net loss by 45 percent from the same year-ago period. The net loss for the third quarter of 2000 was $4.0 million, or 20 cents per common share, compared with a net loss of $7.2 million, or 38 cents per common share, for the third quarter of 1999.

Revenue for the nine months ended Sept. 30, 2000, totaled $4.6 million, an increase of 98 percent over $2.3 million for the first nine months of 1999.

During the first two quarters of 2000, Youbet.com executed the buyback and retirement of senior convertible notes, resulting in an extraordinary gain of $7.3 million.

Before the extraordinary item, the company's loss for the first nine months of 2000 was $10.7 million, or 55 cents per common share, compared with a loss of $13.7 million, or 85 cents per common share, for the same nine-month period in 1999. Including the extraordinary item, the net loss for the nine months ended Sept. 30, 2000, was $3.4 million, or 18 cents per common share.

At Sept. 30, 2000, Youbet.com had total assets of $41.7 million, cash and cash equivalents of $30.6 million, and stockholders' equity of $18.4 million.

The Youbet Network:

During the third quarter, the company reviewed all subscribers who had been inactive for 60 days, and moved those subscribers to a separate ``inactive status'' category. Management believes this action provides a better gauge of subscriber activity. This resulted in a revised active subscriber base of approximately 16,000 as of Sept. 30, 2000 (including 2,300 California subscribers).

Handle derived from Youbet's subscribers during the third quarter increased 21 percent to $22.4 million, compared with $18.5 million for the same quarter last year.

The company expects a return to growth in the Youbet Network subscriber base in the first quarter of 2001 in conjunction with the launch of its new Web-based horse-racing product.

Recent Key Events:

Youbet.com achieved several important milestones in the ongoing enhancement of its products and services. The company announced the addition of 13 new U.S. and Canadian racetracks to the Youbet Network, bringing the total number of partner racetracks to 61. With this expansion, Youbet.com is positioned with the largest and most diverse group of thoroughbred and harness tracks accessible through one online network.

In further development of its online live event, entertainment and wagering initiatives, the company announced its selection of BroadVision One-To-One® Enterprise as its Web-based personalization tool for both its online sports-related product and its Web-based horse-racing service.

BroadVision Inc., a leading provider of personalized e-business applications, will provide content management and personalization for Youbet.com's wagering, and points and prizes offerings online. The company recently released the beta test version of its new Web-based horse-racing product, and expects to conclude testing and fully launch the Web Racing feature during the first quarter of 2001.

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