ISWI’s SportXction(TM) Software Provides Basis For Agreement Between Ligaz888 GIG And Telewest Communications To Launch First Fully Interactive Betting Service On Digital TV

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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 SmallCap:ISWI – news) announced today that its exclusive licensee and financial partner, Global Interactive Gaming, Ltd. (GIG), signed a landmark agreement with Telewest Communications, one of the leading broadband communications and media groups in the UK, to provide them with the world’s first, fully interactive, play by play betting system, for use in conjunction with their digital TV service. Telewest provides cable television and Internet access to approximately 1.7 million households (approximately 4 million customers). This agreement between GIG and TeleWest Communications will provide its subscribers with a betting service that uses as its basis ISWI’s patented SportXction(TM) gaming system.

 

In this agreement to jointly develop and adapt GIG’s interactive gaming product, whose core technology is licensed from ISWI, the two companies will be ready to roll out a test service in Fall of 2001, with a full launch to Telewest digital cable TV customers early in 2002. The licensing agreements signed in March 2000 between ISWI and GIG provides ISWI with license fees representing a share of all 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: “This first agreement between GIG and a major digital TV provider is a significant milestone for both ISWI and GIG and validates GIG’s gaming service for interactive television providers. By gaining acceptance for their product from one of the leading communications and media groups in the UK, GIG has further verified its ability to get SportXction(TM) based Ligaz888 systems implemented by a substantial number of installed iDTV subscribers, thus reaching a critical mass with its first contract and tapping into what is expected to be a multi-billion dollar market. We believe our software technology is ideally suited for iDTV as it requires no computer literacy to play the game, but merely the use of a standard TV remote control while viewing a sporting event on television. This system will allow cable and satellite providers to meaningfully increase revenue per subscriber, while providing GIG, and thereby ISWI, with a continuing income stream. This is a monumental first step for our partnership.”

 

Telewest sports viewers will be among the very first in the world to enjoy enhanced on-screen action, thanks to GIG’s real-time, screen-based betting service–which, uniquely, allows frequent but relatively small wagers to be placed on the outcome of individual events throughout a game. GIG’s betting service will be delivered through a picture-in-picture interface, within Telewest’s ‘walled garden’ of interactive content partners.

 

GIG’s system, based on ISWI’s patented technology, is very easy to use via on-screen menus, and its artificial intelligence-generated odds allow high-frequency, low denomination wagering on betting propositions that will appeal to a wide subscriber audience. With the UK iDTV betting market forecast by ABN AMRO to be worth (pound)1.4billion ($2.04 billion US) by 2004, Telewest’s choice of GIG’s service presents a significant opportunity to produce substantial revenues.

 

GIG has designed its revolutionary new service for the large audience who an place occasional wager, and for those others who would like to place an occasional wager, but who are not comfortable venturing into a betting shop. Users of the Telewest system will need nothing more complicated than their existing digital TV remote control device to easily place a series of small bets (typically from (pound)1 to (pound)10,) on almost any kind of live sports event, from the comfort of their home.

 

Comments Cees Zwaard, CEO of GIG Ltd, “I’m absolutely delighted that Telewest Communications shares our vision that consumers are ready to invest in interactive Digital TV services that provide genuinely enhanced enjoyment.

 

“Our unique, in-run, play-by-play betting service is the ideal solution for digital TV platforms. For the viewer, its instantaneous response to live events allows betting to become an integral part of live sports broadcasts, vastly increasing enjoyment by quite literally providing a stake in the game. For the digital broadcaster, our service can significantly boost average revenues per unit, in line with the almost unanimous opinion that interactive betting will be the ‘killer app’ for broad acceptance of interactive Digital TV services.

 

“This agreement is also an important step towards achieving GIG’s stated ambition of becoming the world’s leading interactive in-run gaming company on all digital entertainment platforms. Further partnerships in the UK and mainland Europe will be announced shortly.”

 

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 where such technology is legally usable, including for contests and wagering on sporting events world-wide. Excluded from the licenses are the 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 about $240 million over the remaining approximately 12 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 Telewest Communications

 

Telewest Communications, the broadband communications and media group, currently provides multi-channel television and Internet services to 1.7 million households, and voice and data telecommunication services to over 69,000 business customers. Its content division, Flextech, is the biggest provider of basic channels to the UK pay-TV market; and it is the BBC’s partner in UKTV, which has a portfolio of pay-TV channel based on the corporation’s programming, including UK Gold. More information on the company website at www.telewest.co.uk.

 

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. KirchMedia is a multimedia conglomerate whose annual revenues are in the multi-billion dollar range.

 

Formed in 1999, Prisma iVentures’ mission is to create a portfolio of companies focusing 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 organizations.

 

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 Telewest’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.