Who are We?
The Racing Network International provides nightly coverage of North American thoroughbred racing. TRNI, in association with "At The Races", is presented every evening from 6:00 pm to 11:45 pm UK time. Broadcasting on BskyB channel 418, TRNI is currently available to over 5 million subscribers nationwide, and reaches an additional 2 million homes through Telewest and NTL Cable

Direct to Home Account Wagering Service in the UK & Ireland
We have extended our existing agreements with At The Races through May 2009. This is key in establishing a long term relationship with a respected international partner as well as providing continuity for the players, bookmakers and providing product from U.S. racetracks for years to come. ATR programming is distributed on satellite and cable as part of the basic tier throughout the UK and Ireland and reaches 12 million homes. The ATR channel also allows viewers to bet using their set top box and remote control on their television.

Since the new ATR launched we have seen a gradual improvement in viewer and handle levels. We also expect to double the number of bookmakers participating in commingling through the TRNI network in 2006 and with William Hill, Skybet and Bet365 coming on board at the end of 2005 we are off to a good start for 2006.

SIS UK & Ireland LBO Service
TRNI has agreed with Satellite Information Systems (SIS) to provide North American racing for distribution to the UK and Irish betting shop network. SIS is the sole provider of horse racing coverage to these markets other than those races that are shown by the national broadcasters free to air. SIS has informed U.S. that in 2006 they are extending their hours of service to the LBO’s. Currently LBO’s close sometime between 4:30pm and 6:30pm ( UK time) between September & March inclusive and between 7:30pm & 9:30pm from April to August inclusive. The exact closing time depends upon the time of the last live race that is available. Legally the LBO’s can remain open until 6:30pm and 10pm respectively depending on the time of year. The bookmaking industry in the UK has successfully introduced up to four slot machines in each LBO and therefore there is a great incentive to keep the LBO’s open as long as possible within the current law. In addition, the government department responsible for the regulation of off-track betting operations in the UK has confirmed its intention to remove the limitations on the period during which  LBO’s can remain open until 10 pm so that they will be allowed to be open until this time all year round. It is anticipated that the betting industry will take up this option from the fall of 2006. SIS and TRNI anticipate with the additional late closings that the number of U.S. races shown should increase dramatically.

I believe that through this service that the exposure of U.S. racing to a wider audience than just the direct to home market would further stimulate demand and produce an increased following of U.S. racing by British punters and force all the UK bookmakers to offer commingling. Those races shown in the LBO service would receive coverage in the racing papers which would be a major marketing boost for the account wagering service.

TRNI will continue to invest in technology to drive commingling from the LBO and by working with the bookmakers to assist in interfacing with their systems. TRNI currently has a mark sense card reader application that we are beginning to introduce to the industry which will also be the basis for integrating with the in-shop system. This means that the major bookmakers such as Ladbroke and Hills will be able to take pari-mutuel bets in their LBO’s and pass them back to their central sites where the TRNI interface will be able to process them and commingle them into the pools at the host track. We expect this to happen within the next year. TRNI is also working to interface to the leading supplier of LBO systems to the smaller independent bookmakers which will enable these smaller operators to compete with the major bookmakers.

European LBO Network
As part of the TRNI agreements with both ATR and SIS, TRNI has the exclusive right to participate in extending the hours of the European channel that is currently operated by both parties to include North American racing. This channel is a pari-mutuel wagering program that is seen by wagering operators in OTB’s throughout mainland Europe . At this time we intend to cover three tracks per evening simultaneously with post times starting between 12:30 & 1:00pm EST. If your product fits within this time frame we expect to add it to the schedule wherever possible. In addition, in the future we anticipate later post times and extended number of hours that the service is available.

In addition to the above TRNI and Scientific Games have entered into an agreement whereby TRNI will be allowed to enter markets where Sci Games have exclusive rights to act as the tote/operator. Sci Games will act as the tote/operator and TRNI will handle all the business side of the transaction to include settlement, player development and maintenance and other business office responsibilities. These wagers will flow through Sci Games World Wide Wagering Hub in Ireland with all wagers eventually ending up back at the U.S. Host Track.

However, it should be noted that British racing is the major product on the European service and ATR and TRNI are trying to gel into this culture. As such there are large expenses to cover production, distribution and tote costs. TRNI also has to bear the cost of producing and getting the show to London for redistribution into the European network. We also have to get the return path back for commingled wagers and settlement. Even with that in mind we believe that by following on as part of the successful UK product offering in this market we could generate volume and wide distribution for U.S. racing in Europe that would make it financially worth while for all parties involved.

Summary
The direct-to-home account wagering service in the UK and Ireland , as well as the SIS UK and Ireland LBO’s, continue to grow with the addition of some very strong bookmakers. We project that revenue on U.S. product will continue to grow as more exposure is afforded which will further the demand.

The European LBO service added U.S. racing in 2005 and focused on pari-mutuel betting with commingling wherever possible. The relationship with Sci Games and the expanded markets will result in greater exposure of U.S. racing as well as revenue. We think this business will generate additional HTF’s for the Host US tracks.

As U.S. racing reaches all of the various markets throughout Europe during 2006 and an ever wider audience receives regular broadcasts of U.S. racing, we believe that from this year moving forward U.S. racing will become the widely accepted evening horse racing product that will be carried throughout the region following on from local racing. We firmly believe this will mean that U.S. racing will become a totally pari-mutuel product in these markets which currently generate total annual handle of $16 Billion on racing. U.S. racing will be the prime product during new longer hours of operation and there is good reason to believe that it will generate new incremental handle on racing in these markets.