Exhibit 99.1

Youbet Reports Improved Net Revenue and Income
for 2004 Second Quarter, Six-Months

Woodland Hills, CA, August 3, 2004 — Youbet.com, Inc. (Nasdaq: UBET), a leading online wagering company and the largest provider of horse racing content in the United States, today announced that the company earned net income of $39,766 in the second quarter of 2004, a $1.0 million improvement over the net loss of $982,545 for the same quarter a year ago.

Earnings before income taxes, depreciation and amortization (EBITDA) for the three months ended June 30, 2004 rose 22.6% to $743,033 in 2004 versus $606,034 in 2003.

Youbet’s performance during the second quarter featured a year-over-year increase in gross handle resulting in the company’s tenth consecutive quarter of net revenue growth and its second straight quarter of net income. The gains were offset by higher marketing related expenses and by a $245,000 non-cash legal expense reserve to protect against any non-payment by the company’s D&O insurance carrier.

Gross handle in the second quarter of 2004 increased 13.3 percent to $83.0 million compared to $73.3 million in the second quarter of 2003. Youbet set a record for quarterly handle in the second three months of the year even though its network was contractually prohibited from carrying the 2004 Preakness Stakes and all non-California racing content provided by Magna Entertainment Corp.

Net revenues for the quarter ended June 30, 2004 increased 22.2 percent to a record $5.7 million, compared to $4.6 million in the second quarter of 2003.

“During this quarter, our first as a truly independent organization, we took steps to put ourselves on a course toward sustained business expansion,” said Chairman and Chief Executive Officer Charles F. Champion.

“These steps included a realignment of our executive team to focus on operating excellence, enhancing customer service enhancement and developing growth opportunities and an aggressive marketing stance to take advantage of heightened racing interest during the Triple Crown,” he said.

“Advanced deposit wagering is gaining traction among operators, jurisdictions and consumers both here and abroad,” Champion continued, “and Youbet, with its industry-leading technology, content and customer service, is uniquely positioned to take advantage of the opportunities that the market is creating.”

Operating expenses, excluding track and licensing fees, for the second quarter were $4.9 million, compared to $4.0 million in the same quarter of 2003, reflecting increases in network operations costs and higher sales and marketing expense. Marketing related expenses were $340,000 higher in the second quarter of 2004 reflecting an effort by the company to take advantage of the heightened interest in racing’s Triple Crown and to retain customers during the week of the Preakness. The program resulted in a 13.3 percent increase in Preakness week handle — to $6.8 million in 2004 from $6.0 million in 2003 — even though the race was not carried on Youbet’s network.

As a percent of second quarter handle, operating expenses, excluding track and licensing fees, in the second quarter of 2004 were 5.9 percent compared to 5.5 percent in the same quarter in 2003.

For the six months ended June 30, 2004, Youbet earned net income of $54,876 compared to net loss of $2.2 million for the same period in 2003.

EBITDA for the six months rose to $1,838,270 in 2004 versus $1,071,034 in 2003, an increase of 72 percent.

Gross handle for the six months ended June 30, 2004 grew 15.3 percent to $154.8 million from $134.3 million in the 2003 period. Net revenue for the six months increased to $11.1 million, a 31.4 percent improvement from the same period a year ago.

Operating expenses, excluding track and licensing fees, for the first six months of the year were 6.0 percent of handle, compared to 5.5 percent in 2003.

2004 SECOND QUARTER OPERATING HIGHLIGHTS

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Youbet generated a 13.3 percent increase in total handle in the second quarter of 2004 compared to the same period of 2003.

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Total revenue increased 18.7 percent in the second quarter of 2004 compared to the prior year’s second quarter.

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Net revenue rose 22.2 percent in the second quarter of 2004 compared to the 2003 second quarter.

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Net income rose to $39,766 in the second quarter of 2004 compared to a net loss of $982,545 for the same quarter in 2003.

Youbet also reported that it will conduct its 2003 Annual Meeting at the company’s corporate offices in Woodland Hills, California on August 24, 2004. Proxy solicitations have been mailed to shareholders of record as of July 30, 2004. The Annual Meeting had been delayed by a now-resolved legal dispute with Gemstar-TV Guide International, Inc., whose TVG subsidiary elected not to exercise warrants in the second quarter of 2004 that would have given it control of the company. The warrants would have expired on May 18, 2004.

Youbet.com is the largest Internet provider of thoroughbred, quarter horse and harness horse racing content in the United States. Members have the ability to watch and, in most states, the ability to wager on vast majority of all major domestic horse racing content via Youbet.com’s exclusive closed-loop network. Youbet.com members enjoy features that include commingled track pools, live audio/video, up-to-the-minute track information, real-time wagering information, phone wagering and value-added handicapping products.

Youbet.com is an official online wagering platform of Churchill Downs Incorporated and the Kentucky Derby. Youbet.com operates Youbet.com TotalAccess™, an Oregon-based hub for the acceptance and placement of wagers. More information on Youbet can be found at www.Youbet.com.

Forward-Looking Statements

This press release contains certain forward-looking statements. Statements containing expressions such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” potential,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology used in Youbet’s press releases and in its reports filed with the Securities and Exchange Commission are intended to identify forward-looking statements. These forward-looking statements, which are included in accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause Youbet’s actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this press release. Although Youbet believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that actual results will not differ materially from these expectations. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the Securities and Exchange Commission. Such factors include, without limitation, the following: the timely development and market acceptance of new products and technologies; our ability to secure financing on terms acceptable to us; our ability to control operating expenses; increased competition in the advance deposit wagering business; a decline in the public acceptance of wagering; wagering ceasing to be approved in jurisdictions where Youbet currently operates; the limitation, conditioning or suspension of any of Youbet’s licenses; increases in or new taxes imposed on wagering revenues; loss or retirement of key executives; and a decline in the general economy. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this press release. Youbet does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Youbet.com, Inc.
Condensed Consolidated Balance Sheets

Youbet.com, Inc.
Condensed Consolidated Statements of Operations

Youbet.com, Inc.
Condensed Consolidated Statements of Operations

Youbet.com, Inc.
Condensed Consolidated Statements of Cash Flows

Reconciliation of Net Income to EBITDA

(a) EBITDA (earnings before interest, taxes, depreciation and amortization) is considered a Non-GAAP financial measure as defined by SEC Regulation G. We consider EBITDA an important measure of our financial performance and of our ability to generate cash flows to measure operating performance, fund capital expenditures and fund other corporate investing and financing activities. EBITDA eliminates the non-cash effect of tangible asset depreciation and intangible asset amortization, as well as any non-cash gains or charges. EBITDA should be considered in addition to, rather than as a substitute for, pre-tax income, net income and cash flows from operating activities.