Tipp24 AG / Quarter Results

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Political and legal situation still unresolved 

In the first three months of its fiscal year 2008, Tipp24 AG raised
earnings before interest and taxes (EBIT) by 22.3 percent to EUR 2.7 (2.2)
million, compared with the same period last year. The EBIT margin fell by
1.1 percentage points to 23.6 percent. EBIT was burdened above all by the
negative contribution of the Abroad segment, due mainly to start-up costs
in the UK. Initial investments for the new Skill-Based Games division and
increased expenses for legal and consultation services resulted in a higher
cost basis. The EBIT margin in Germany was up 4.7 percentage points to 32.3
percent.

The introduction of the new State Treaty on Gaming on 1 January 2008
resulted in two special items: Tipp24 is obliged to tighten its mechanisms
for the protection of minors when registering new customers. This involves
checks with the German credit reference agency ('Schufa') and successfully
passing the 'PostIdent' identification process. Tipp24 also fulfilled
higher authentication requirements. These regulations significantly impede
the development of new customer figures and result in greatly increased
customer acquisition costs in Germany.

At the same time, Tipp24 discontinued its marketing of the state-run
sporting bet Oddset and the Keno lottery. According to the new State Treaty
on Gaming, Internet marketing of these products is no longer allowed. In
fiscal year 2007, these products accounted for around 5 percent of domestic
billings.


Renewed growth in revenue and billings

Due to the more difficult registration process, year-on-year growth in
registered customers amounted to just 33 (69) thousand. At EUR 86.8
million, billings were up 26.2 percent over the previous year. Revenues –
consisting mainly of commissions and additional fees – rose by 27.7 percent
to EUR 11.4 (8.9) million in the period under review.

Jens Schumann, Chairman of the Executive Board of Tipp24 AG, states: 'Four
months after its introduction, the legality of the new State Treaty on
Gaming – which severely restricts key areas of Tipp24’s business activities
or even completely forbids them – is more contested than ever. In addition
to formal infringement proceedings brought against the Federal Republic of
Germany by the EU Commission in late January, numerous German
administrative courts have since questioned the legality of the State
Treaty. At the same time, the first state lotteries are reporting
significant income losses. The original aims of the State Treaty – legal
certainty and income security – have not been achieved. We believe it is
therefore essential that politicians put an end to these unwanted excesses
by modifying the State Treaty on Gaming.'


Opportunity: deregulation conceals growth potential 

Recently announced verdicts on a European level and various proceedings at
German administrative courts, also with reference to European law, may also
result in steps towards deregulation in the medium term with an impact on
lotteries. As an internationally aligned company, Tipp24 may benefit more
than average from such a development.

Deregulation would also probably result in a complete clarification of the
legal situation in Italy and thus provide our Italian subsidiary
Puntogioco24 with the opportunity to freely pursue its business interests.


About Tipp24 AG: Tipp24 was established in 1999 and is now the market
leader for lottery products in the Internet on the basis of billings. The
company has succeeded in achieving impressive growth rates right from the
start. Almost all state lottery products are supplied. It only takes a few
mouse clicks to buy a lottery ticket – round the clock, quickly and
reliably. The ticket receipt is kept safely, winners are notified about
their prizes automatically by text message and e-mail and prizes are
credited automatically. Subsidiaries of Tipp24 (www.tipp24.de) are
Ventura24 in Spain (www.ventura24.es), Puntogioco24 (www.puntogioco24.it)
in Italy and MyLotto24 (www.mylotto24.co.uk) in the UK. Shares in Tipp24 AG
have been traded at the Frankfurt Stock Exchange since 2005.


Tipp24 AG       
Andrea Fratini       
Head of Media and Public Relations   
Tel.: +49 40 32 55 33-660
Fax: +49 40 32 55 33-5600     
E-mail: presse@tipp24.de     
Internet: www.tipp24.de/presse/  


05.05.2008  Financial News transmitted by DGAP
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Language:     English
Issuer:       Tipp24 AG
              Straßenbahnring 11-13
              20251 Hamburg
              Deutschland
Phone:        +49 (0)40 325533-0
Fax:          +49 (0)40 325533-77
E-mail:       office@tipp24.de
Internet:     www.tipp24-ag.de
ISIN:         DE0007847147
WKN:          784714
Listed:       Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin, Düsseldorf, Hamburg, München, Stuttgart
 
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