SOURCE: Press Release

On the 12th October 2007, Leisure & Gaming plc (“the Company”) announced that it had terminated takeover discussions with CGTV Games Limited but had been approached by other parties and was considering these alternative proposals.

The Company remains in these discussions but takes this opportunity to give an update on its strategic focus and operations.

The Company is focused on 5 key strategic initiatives:

1) Risk Management

The Company has conducted a review of its risk management policy and procedures, including hedging policy, and plans to strengthen its risk management team.

2) Restructuring of Partner/Franchisee Commissions

In the course of September and October, the Company has restructured its partners’ commissions to reduce volatility of earnings. The Company expects an associated positive impact from October 2007 onwards.

3) Product Diversification

With the expected introduction of secondary regulation in Italy in 2008, the Company will be able to offer new products like skill games, poker, bingo and casino games through the licences it was awarded in 2007.

4) Channel Diversification

In addition to its land-based franchise network, the Company will start to promote its stand-alone internet offering in Italy – BetshopItalia.com – as well as promote its recently re-launched telephone betting service.

5) Geographic Diversification

The Company continues to explore new markets to roll out its franchised betting shop model and online service. Of particular focus are Romania, where it will open its first shop in November 2007, and Cyprus.

In addition, the Company is in the process of opening a new operations centre in Italy and will relocate customer service and administration functions from the United Kingdom to Italy in the course of November to provide a more localised service.

The Company also expects to open the first of its 59 shops operating under new “corner” licences, allowing over-thecounter cash betting, in November with all being operational by the end of 2007.

Henry Birch, Chief Executive said:

“We are pleased to set out the focus of the business going forward, which incorporates significant opportunities in Italy and beyond. We have spent the last few months restructuring parts of the business and, coupled with some of the ongoing corporate discussions we are having, feel that we are in a strong position to deliver value to shareholders.“