13 October 2006

Empire Online Limited
US LEGISLATION - UPDATE


Further to Empire Online’s announcement of 2 October 2006, new legislation affecting on line gaming in the USA has been introduced today. After taking extensive advice on this matter the Company will terminate its USA business with immediate affect.

This action will have a material adverse effect on Empire Online’s future earnings. Currently, approximately 65% of Empire Online’s revenues are generated from customers based in the USA. The Company’s margins will also be affected by the loss of this revenue due to operational gearing and the higher gross margin generated from the USA business.

The Board is confident that the business will continue to generate positive Earnings before interest, tax, depreciation and amortisation (EBITDA) for 2007. In the first half of 2006 more than 55% of new real money player sign ups came from outside the USA. The Company has considerable cash resources at its disposal and the Board re affirms its intention to pay an interim dividend of 1.7cents per share.

The Company will now focus its resources on two key areas:

- developing its market position in online gaming outside the USA,

- leveraging its expertise in on line marketing to other sectors in which it has not previously been involved.  


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