32Red in Negotiations to Offload BetDirect Brand

20 September 2007

In a note to the London Stock Exchange this morning, 32Red confirmed media speculation that negotiations are currently underway regarding the sale of its BetDirect brand.

The British media are speculating that the suitor, which 32Red reportedly would not name, could be Boylesports. On Wednesday, the Irish bookmaker was linked to a £2.5 million sponsorship tie-up with the public-service British television station, Channel 4.

Boylesports could not be reached for comment.

As recently as July, 32Red discussed BetDirect's relocation to Gibraltar, saying that it had proceeded slower than expected but that growth in the business, which it acquired from Sportech in June 2006, was nonetheless encouraging.

July's announcement, however, was preceded by less than stellar full-year results.

In March, 32Red said poor gross-win margins at BetDirect had adversely affected the group's overall performance--to the tune of a £3.7 million pre-tax loss and a canceled dividend.

Incidentally, during its final year under Sportech control, BetDirect delivered operating losses of £4.8 million.

Recently, BetDirect had re-launched its Web site on Microgaming software.

On the LSE, 32Red's share price closed up 0.50p at 41.50.