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ISWI’S Partner, GIG, Signs Second Major Ligaz888 Interactive TV Betting Service Agreement With ITV Digital

Interactive Systems Worldwide, Inc. (NASDAQ:ISWI), based in West Paterson, NJ, developed and patented a software platform which enables users to wager play-by-play while watching a live sporting event. ISW and its partner Global Interactive Systems, Ltd. have issued two releases today outlining agreements that have been made (TeleWest Communications and ITV Digital) with two of the largest digital TV providers in the UK.

 

WEST PATERSON, N.J.–Sept. 10, 2001–Interactive Systems Worldwide, Inc. (Nasdaq:ISWI – news) announced today that its licensee and financial partner, Global Interactive Gaming, Ltd. (GIG), signed its second agreement to develop and launch an interactive wagering product. This agreement is between GIG and ITV Digital, a communications provider with an established base of over one million Interactive TV and Internet customers, now offering the world’s first commercial digital terrestrial TV platform. The two companies will jointly develop a fully interactive, play-by-play consumer betting product, with a rollout expected for early 2002. The ultimate goal is to extend GIG’s service to all of ITV Digital’s 1.1 million customers.

 

GIG’s interactive wagering product utilizes ISWI’s unique, patent protected, SportXction(TM) software platform. The licensing agreements signed in March 2000 between ISWI and GIG, provide to ISWI as license fees, a share of the revenue from all systems utilizing its technology. (for more information see “About ISWI – GIG License Agreements”, below.)

 

Barry Mindes, Chairman & CEO of Interactive Systems Worldwide, Inc. stated, “We are extremely pleased that GIG has signed its second development and distribution agreement in the last week, this one with ITV, one of the true pioneers of interactive television. These agreements validate ISWI’s decision to partner with one of the leading communications and media groups in the UK. By aligning the SportXction(TM) platform with the leading Digital Television providers, who are committed to developing, marketing and launching timely applications for the iDTV market, we will collectively set the standard for interactive gaming during a sporting event. An early 2002 launch is well timed to meet an important unfilled need among iDTV subscribers.”

 

ITV Active users will be among the first in the UK to enjoy enhanced, on-screen betting action, thanks to GIG’s advanced, real-time, screen-based system. This, uniquely, allows wagers to be continually placed on the outcome of defining moments throughout a Ligaz888 game–events such as a Fowler penalty, a Rusedski serve, or a crucial over in a cricket Test. Unlike other online betting products, GIG’s easy-to-use, low-wager, high-frequency betting service has been designed specifically for appeal to a wide consumer audience. It is ideally placed to capitalize on the huge potential of the UK iDTV betting market, which is forecast by ABN AMRO to be worth (pound)1.4 billion ($2.04 billion US) by 2004.

 

This announcement represents a significant milestone for GIG. ITV Digital is one of the leading iDTV broadcasters in the UK, with a growing customer base of 1.1 million subscribers, many of whom are already well versed in TV interactivity–with experience of services such as the enhanced UEFA Champions League and Wimbledon contests.

 

GIG has designed its revolutionary new service for the numerous consumers who admit to placing an occasional wager, but who are not likely to venture into the alien environment of a typical High Street betting shop.

 

With nothing more complicated than the remote keyboard of their discrete ITV Active box, plus a connection to an existing phone line, users of GIG’s service will be able to easily place bets on almost any kind of live sports event–including the hugely popular UEFA Champions League broadcasts on ITV and ITV Digital.

 

Commenting on behalf of ITV Active, Head of Content Management, Roger Matthews, says: “The launch of ITV Digital genuinely broke new ground in world broadcasting, and brought the benefits of iDTV to a whole new audience. We have been committed to offering a service that combines total quality and flexibility, with ease of use and convenience. Our partnership with GIG will allow us to continue to enhance the ITV Digital proposition by again pioneering new and exciting consumer services for our customers.”

 

Comments Cees Zwaard, CEO of GIG Ltd: “We’re delighted to be working with ITV Digital. The company is a true leader in iDTV broadcasting and the development of value-added services for its customers. Many broadcasters now realize that their future success will be based upon incremental revenues generated from new, compelling and distinctive services, such as the unique, truly interactive betting service from GIG.

 

“By agreeing to work with GIG and develop our in-run betting product, ITV Digital has again shown that it understands–and will fulfill–its customers expectations and desires. With this announcement, GIG takes a significant step towards becoming the world’s leading interactive in-run gaming company on digital entertainment platforms.”

 

About ISWI – GIG License Agreements

 

Under the Agreements, signed on March 17, 2000, GIG was granted the exclusive license to market, distribute and use the Company’s interactive SportXction(TM) software, technology and patents in which such technology is legally usable, including contests and wagering on sporting events world-wide. Excluded from the licenses are the continued use of the System in Nevada for wagering, and the application of the Company’s basic technology and patents to lotteries and financial transactions (i.e., stock, bond, option and currency trading).

 

Under these Agreements, the Company will be paid 25% of the gross profit for the use of its technology for contests or other transactions. For wagering, the Company will be paid the lesser of 25% of the gross profit or 1% of the gross handle. The Company will bear no share of the cost of equipment, facilities or other operating expenses of GIG. These percentage fees are subject to guaranteed minimum annual license fees of $3 million in the first year; $5 million in the second year; and increasing by 20% per year thereafter, for a total minimum of $250 million over the 14 year term of the Agreements, after which the license to GIG is fully paid. At all times the minimum license fee for the next four quarters is kept in a third party escrow account.

 

About SportXction(TM)

 

SportXction(TM) is a patented, real-time, software system, which allows a player to make play-by-play wagers on a sporting event while the event is in progress. Wagering may be conducted while viewing a television broadcast of a sporting event. The wagers offered are mostly oriented to short-term plays, for example, is the next play a run or a pass, is the next pitch a ball or a strike, does the shooter make two foul shots, and many more, including parlays, in most sports. The wagers have odds associated with them, which relate to the probable outcome of the proposition being wagered upon, and the odds are adjusted in real time by proprietary artificial intelligence software to reflect player sentiment, as derived from the betting patterns. The system also supports traditional, pre-game sports wagers.

 

About ITV Digital

 

ITV Digital subscriptions start from (pound)9.99 a month and are subject to status, terms and coverage. ITV Digital is the new brand for ONdigital, the world’s first commercial digital terrestrial TV platform, providing digital TV through an aerial, with no dish or cable needed. ITV Digital is jointly owned by Carlton Communications PLC and Granada Media PLC.

 

ITV Active is the new name for ONnet (ITV Digital’s internet through your TV service). ITV Active requires connection to a fixed telephone line; the ITV Active box is provided free on loan for as long as a subscription is maintained. The ITV Active service is available at (pound)8 a month ((pound)5 to ITV Digital subscribers) plus call charges.

 

About GIG & Prisma iVentures

 

Global Interactive Gaming Ltd was created in April 2000 as a joint venture between Prisma iVentures Ltd, and Multisports Games Development, Inc (MGDI) of Delaware, USA.

 

Prisma iVentures is a dedicated digital services company 90 percent owned by TaurusSport GmbH. The latter is a wholly-owned subsidiary of KirchMedia GmbH & Co. KgaA, the division of Kirch Group responsible for commercial free-television, license trading, New Media, sport, film and TV production and for film technology.

 

Formed in 1999, Prisma iVentures’ mission is to create a portfolio of companies focussing on different aspects of the digital distribution and production of sports content. By identifying and developing added value for rights holders in the future, the aim is to create a significant lead in new media applications for sport.

 

Prisma iVentures’ sister company, KirchSport GmbH, is wholly owned by TaurusSport and manages the broadcasting rights for world-class sports properties such as the 2002 & 2006 FIFA World Cup(TM) in Europe; the Ice Hockey World Championship; the Wimbledon Tennis Championships and Germany’s Bundesliga. KirchSport also markets television, sponsorship and advertising rights for four other European soccer leagues, 11 European national associations and more than 25 football clubs. Through this connection GIG gains access to the vast experience of one of the world’s leading sports marketing organisations.

 

This press release contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including, but not limited to, whether the interactive betting service will be launched on the projected dates; and whether use if the system will increase ITV Digital’s subscriber revenue and the consequences thereof to GIG and the Company.Investors are cautioned that these statements involve risks and uncertainties. Additional risks and uncertainties are detailed in the Company’s filings with the Securities and Exchange Commission, including its Form 10-KSB for the year ended September 30, 2000.