Roth Capital Partners New York Conference

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Roth Capital Partners New York Conference
September 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 Profile

• Youbet.com is the largest licensed and legal
  online pari-mutuel horse racing site in the US
• 35 current market share of the pari-mutuel
  advanced deposit wagering segment continues to
  grow
• Provide 24-hour access to live racing content
  from140 tracks around the world
• Process more than one million dollars in daily
  wagers

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Our Profile

• Exclusive relationships with ESPN.com and
  CBS.Sportsline introduces Youbet.com to
  attractive demographics
• Customer base of 150,000 active/inactive users
• Ranked 1 for simulcasting live sports A/V over
  the Internet
• Ranked 48th of all gaming site web traffic
  internationally
• (Casino Citys 2005 Gaming Business Directory)

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Regulatory Environment

• Legal in 41 of 53 U.S. jurisdictions
• Account wagering regulations have been proposed
  in Nevada and could be approved as early as
  September
• Kyl Bill
• Draft bill seeks to enhance restrictions on
  internet gambling
• Elicited extensive negative feedback and is
  unlikely to be introduced without protection for
  pari-mutuel horseracing
• WTO
• As with Kyl draft no impact to business is
  expected
• Wine Case
• Recent Supreme Court ruling creates precedent for
  fewer restrictions on interstate commerce

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Our Present
Fan Bases among U.S. Population (18) Year 2004
Horseracing
Horseracing had the highest percent change among
all sports from 2003 to 2004
5.1
MLB
NFL
Fishing
2.4
College Basketball
2.0
1.9
1.5
Boxing
0.6
College Football
0.5
0.5
0.0
NASCAR
NBA
Source NTRA
Extreme Sports
-1.6
WNBA
-2.1
-2.4
-2.5
PGA
Figure Skating
-4.1
NHL
WTA
-5.4
UBETs fastest growing handle and customer
segment continues to be 21-30 year olds
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Our Present
Fan Bases among U.S. Population (18) Year 2004

• Horseracing ranked 9th out of 29 major sports
• First time horseracing has been ranked in Top 10
• Horseracing surpassed PGA, Boxing and NHL
• NTRA fan base 38

NFL
68
MLB
60
College Football
56
NBA
48
Figure Skating
47
46
44
43
College Basketball
38
Extreme Sports
37
36
36
33
NASCAR
32
32
Horseracing
Fishing
PGA
Boxing
NHL
WNBA
WTA
Source NTRA
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Our Present
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Our Potential

• Organic Growth
• ADW Channel Growth
• Market Share Growth
• Financial / Operating Leverage
• IRG Integration
• Player Rewards Program Deployment

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Our Potential
Industry Handle growth driven solely by ADW
channel CAGR 17
Projected CAGR, 05-08
17
ADW
-1
-1
0
Above data is based on a study conducted by the
Monitor Group
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Our Potential
2005 figures are for the six-month period ended
June 30th, 2005
Youbet.com has the largest ADW market share
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Our Potential

• Youbets Business Model

• Operating leverage - 25 of transactional
  capacity currently utilized
• Financial leverage - 90 fixed costs

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Our Potential

• Recently Acquired International Racing Group
  (IRG)
• IRG is a Curacao based licensed and regulated
  pari-mutuel telephone wagering company
• Targets high-volume customers with rebate
  offerings
• Processed nearly 12 million in handle during
  first month following the acquisition
• Yield on IRG handle was approximately 3
• Integration of operational synergies
• Accretive transaction

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Our Potential

• Player Rewards Program
• Targeting new customer acquisition, wallet share,
  and player evolution
• Maximizes player retention
• Strengthens relationships with existing track
  partners through co-promotional programs
• Competitive alternative to offshore and other
  online sites
• Further differentiates Youbets products/services
  within the industry

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Our Potential
Other Growth Opportunities

• Domestic
• Related and accretive acquisitions
• Channel consolidation
• Diversification within the industry
• International
• Expand internationally and diversify through
  additional offerings and/or partnerships
• Cultivate international handicappers
• Pursue expanded international track offerings

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Financial Balance Sheet Highlights
Six Months ended June 30, (in millions, except
per share and percentage figures)
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Investment Merits

• 35 current industry market share and growing
• Primed for growth 25 capacity and 90 fixed
  costs
• Industry leading product offerings
• Actively pursuing growth opportunities through
  accretive transactions
• Remain confident in achieving current analyst
  expectations for 2005 diluted EPS of 0.20