Bingo.com, Ltd.
OTC Bulletin Board : BNGOF

Bingo.com, Ltd.

August 14, 2009 06:00 ET

Bingo.com Announces Second Quarter Results

ANGUILLA, BRITISH WEST INDIES--(Marketwire - Aug. 14, 2009) - Bingo.com, Ltd. (OTCBB:BNGOF), operator of the popular online gaming community http://www.bingo.com, today announced its unaudited financial results for the second quarter ended June 30, 2009. All amounts are presented in United States dollars and in accordance with United States Generally Accepted Accounting Principles.

"The second quarter of 2009 was a challenge for Bingo.com," said Tarrnie Williams, the Company's CEO. "While our traffic and revenues continue to increase, the competition in the United Kingdom online bingo market is intense and has resulted in a reduction of individual player values. Our costs have increased due to our Maltese gaming license, affiliate marketing costs, and our continued investment into search engine optimization. We recognize that to capture a higher percentage of the online bingo market share and reach profitability we need to offer our players a unique gaming experience. As we put cost saving measures in place and continue to focus on improving the Bingo.com system, we believe we will achieve profitability in the coming quarters."

Bingo.com highlights for the second quarter of 2009 included:

- Second quarter gaming revenue of 957,040 Pounds Sterling, an increase of 41% from gaming revenue of 678,108 Pounds Sterling for the second quarter of the prior year and an increase of 7% from gaming revenue of 894,738 Pounds Sterling in the first quarter of 2009 when measured in Pounds Sterling, our depositing currency.

- Net loss of $266,702 in the second quarter of 2009, a 9% increase from a net loss of $243,974 in the first quarter of 2009.

- Completion of a private placement of 1.5 million shares at $0.15 per share. Total proceeds of the offering were $225,000.

The Company's revenues are primarily received in Pounds Sterling whereas the majority of its fixed expenses are in both Canadian and United States Dollars. The large swings in the exchange rates of these currencies have negatively affected our operations.

Total revenue increased to $1,512,116 for the quarter ended June 30, 2009, an increase of 7% from revenue of $1,415,858 for second quarter of 2008 and an increase of 14% from revenue of $1,324,630 in the first quarter of 2009. Gaming Revenue increased to $1,460,149 (954,040 Pounds Sterling) in the quarter ended June 30, 2009, an increase of 9% (41% increase when measured in Pounds Sterling), compared to Gaming Revenue of $1,337,441 (678,108 Pounds Sterling) in the second quarter of 2008 and an increase of 14% from revenue of $1,284,732 (894,738 Pounds Sterling) in the first quarter of 2009. While the Company experienced strong growth in its player base during the quarter over the previous quarters, the weakness in the Pound Sterling compared to the US dollar neutralized the gains. Bingo.com earned advertising revenue of $51,967 in the quarter ended June 30, 2009, a 34% decrease from advertising revenue of $78,417 in the second quarter of 2008 and an increase of 30% from advertising revenue of $39,898 in the first quarter of 2009.

Cost of revenue increased to $951,954 during the quarter ended June 30, 2009, an increase of 3% compared to costs of $925,293 for the second quarter of 2008 and an increase of 9% over costs of $870,349 in the first quarter of 2009. The gross margin increased to 37% for the quarter ended June 30, 2009, compared to gross margin of 35% in the second quarter of 2008 and 34% gross margin in the first quarter of 2009. Cost of revenue consists of bonuses granted on deposits made by players, the cost of hosting the website, payment processing fees in relation to deposits from and withdrawals to our players, software license fees, and the domain name purchase payments. The increase in cost of revenue for the quarter ended June 30, 2009, compared to the second quarter of 2008 and the first quarter of 2009, is due to the increase in costs, especially bandwidth and gaming taxation, in relation to our Maltese gaming license. In addition, due to our increase in deposits, more deposit bonuses were granted. The awarding of deposit bonuses has been required both to be competitive with other bingo-oriented websites and to build a large customer base as quickly as possible.

Operating costs before interest, depreciation and amortization expenses, including sales and marketing and general and administrative expenses increased to $840,160 in the second quarter of 2009, an increase of 12% over operating expenses of $753,403 in the second quarter of 2008 and an increase of 18% over operating costs of $712,288 in the first quarter of 2009. The increase in operating expenses compared to the second quarter of 2008 and the first quarter of 2009 is primarily due to the increase in marketing costs plus an increase in expenses as a result of operating our Maltese gaming license.

Sales and marketing expenses were $455,501 during the second quarter of 2009, an increase of 42% over sales and marketing expenses of $321,027 in the second quarter of 2008 and an increase of 36% over expenses of $334,245 during the first quarter of 2009. These costs include sign up bonuses and incentives, affiliate commissions, advertising, and other promotional expenses intended to increase our subscriber base and improve gaming revenue. The increase compared to the previous quarters is primarily due to the increase in marketing expenses, particularly search engine optimisation costs incurred to retain our top ranking positions in the search engines.

General and Administrative expenses consist of salaries, premises costs for our office, legal and professional fees, and other general corporate and office expenses. These expenses were $429,384 for the second quarter of 2009, a marginal decrease from general and administrative expenses of $431,195 in the second quarter of 2008 and an increase of 17% from expenses of $366,132 for the first quarter of 2009. The decrease compared to the second quarter of 2008, is primarily a result of the currency fluctuations. The increase, compared to the first quarter of 2009, is due to the increase in expenses as a result of operating our Maltese gaming license.

Net loss for the quarter ended June 30, 2009 amounted to $266,702, or $0.01 per share, an increase of 13% compared to a net loss of $235,188 or $0.01 in the second quarter of the prior year and an increase of 9% compared to a net loss of $243,974 or $0.01 per share for the first quarter of 2009. The increase in net loss is due to the increasing marketing costs incurred to enable us to compete in the increasily competitive United Kingdom market.

The Company has made a provision for the progressive jackpots on its slots games and for players float. We had cash of $848,749 and working capital of $752,304 before the provision for jackpots and players float of $340,317 at June 30, 2009. This compares to cash of $412,002 and working capital of $336,316 before the provision for jackpots and players float of $211,821 at December 31, 2008.

For full details of the Company's operations and financial results, please refer to the Securities and Exchange Commission website at www.sec.gov or the Bingo.com website at http://www.bingo.com.

About Bingo.com

Bingo.com, Ltd. (OTCBB:BNGOF) is the parent company of the Bingo.com group of companies which operates the popular online gaming community http://www.bingo.com. The Bingo.com group offers multiplayer bingo, slot machines, sweepstakes, and more. Players come together from around the world to chat, share, play and win at Bingo.com. With over 1,975,000 registered users http://www.bingo.com is one of the most recognized and most visited bingo entertainment destinations on the Internet.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by the company) contains statements that are forward-looking, such as statements relating to anticipated future success of the company. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the company. For a description of additional risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission. Specifically, readers should read the Company's Annual Report on Form 10-KSB, filed with the SEC on March 28, 2008, and the prospectus filed under Rule 424(b) of the Securities Act on March 9, 2005 and the SB2 filed July 17, 2007 for a more thorough discussion of the Company's financial position and results of operations, together with a detailed discussion of the risk factors involved in an investment in Bingo.com, Ltd.

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