AeA Presentation

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AeA Presentation May 16, 2005
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Safe Harbor Language

• This presentation contains certain
  forward-looking statements. Statements containing
  expressions such as "may," "will," "project,"
  "might," "expect," "believe," "anticipate,"
  "intend," "could," "would," "estimate,"
  potential," "continue" or "pursue," or the
  negative or other variations thereof or
  comparable terminology used in Youbet's
  presentation and in its reports filed with the
  Securities and Exchange Commission are intended
  to identify forward-looking statements. These
  forward-looking statements, which are included in
  accordance with the Safe Harbor provisions of the
  Private Securities Litigation Reform Act of 1995,
  may involve known and unknown risks,
  uncertainties and other factors that may cause
  Youbet's actual results and performance in future
  periods to be materially different from any
  future results or performance suggested by the
  forward-looking statements in this presentation.
  Although Youbet believes the expectations
  reflected in such forward-looking statements are
  based upon reasonable assumptions, it can give no
  assurance that actual results will not differ
  materially from these expectations. From time to
  time, these risks, uncertainties and other
  factors are discussed in the Company's filings
  with the Securities and Exchange Commission.
  Such factors include, without limitation, the
  following the timely development and market
  acceptance of new products and technologies our
  ability to secure financing on terms acceptable
  to us our ability to control operating expenses
  increased competition in the advance deposit
  wagering business a decline in the public
  acceptance of wagering wagering ceasing to be
  approved in jurisdictions where Youbet currently
  operates the limitation, conditioning or
  suspension of any of Youbet's licenses increases
  in or new taxes imposed on wagering revenues
  loss or retirement of key executives and a
  decline in the general economy. Viewers are
  cautioned not to place undue reliance on
  forward-looking statements, which speak only as
  of the date of this presentation. Youbet does
  not undertake, and specifically disclaims any
  obligation, to publicly release the result of any
  revisions that may be made to any forward-looking
  statements to reflect the occurrence of
  anticipated or unanticipated events or
  circumstances after the date of such statements.

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Our Premise

• Youbet.com has achieved its financial and
  operational turnaround and is now poised to
  capitalize on our strengths and credibility.
• We recognize that each of our target audiences
  wants answers to unique questions.
• Wall Street Channel Partners Customers
• All of them want to know what we will do next?
• We will lead.

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Our Past

• 2004 recorded the first annual profit with
  earnings of 4.6M an 8.6M turnaround after 11
  consecutive quarters of revenue growth
• Improved institutional ownership mix from 8 to
  40
• 2004 total handle up 14 to 315M

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Our Past

• Processed over 65,000,000 online transactions for
  more than 1 Billion since 1997
• Player deposits up 30 over 2003 to 97M
• Concurrent users up 65 to over 9,000
• New customer signups increased 25

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Our Present
ADW Momentum

• 17.5 Billion wagered on horse racing in 2004
  with ADW penetration of 10
• ADW has grown to over 1.7 Billion market in 2004
  - from 0 in 1998
• ADW growth is approximately 17 per year
• ADW market split is 70 online and 30 IVR /
  phone based. Phone wagering is currently 3 of
  Youbet handle volume

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Our Present
Company Momentum

• Youbet.com is the largest licensed online horse
  racing and pari-mutuel site in the USA with 35
  of the ADW market share
• On track to achieve 2005 diluted EPS of 0.18
  from current operations alone
• Primed for growth - 25 capacity and 90 fixed
  cost
• Named as Top 5 Stocks under 10 by Forbes.com
• Ranked 48th of all gaming site web traffic
  internationally
• (Casino Citys 2005 Gaming Business Directory)

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Our Potential

• Organic Growth
• Leverage customer database analytics
• Increase capital for technological advancements
• Grow the Youbet phone customer base
• Deploy Player Rewards Program
• Create Independent Wagering Compliance Committee

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Our Potential
Other Growth Opportunities

• Domestic
• Related and accretive acquisitions
• Channel consolidation
• Private Labeling
• International
• Expand internationally and to diversify through
  broader sports betting and gaming markets
• Cultivate international handicappers
• Pursue expanded international track offerings

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Our Success
UBETs Performance compared to NASDAQ, SP,
Russell
UBET
Russell 2000
SP
NASDAQ
Time Frame - 1/1/02-3/31/05
Chart provided by Bigcharts.com