1. Preliminary Results Announcement Year ended 31 December 2002 10 March 2003

2. 2 Detailed Financials Outlook and Issues Operating Highlights

3. 3 EBIT (1) up 26% to £141.4m Further product/revenue diversification Encouraging income/cost movements post gross profit tax anniversary (1)Pre exceptional items

4. 4 EBIT (1) up 26% to £141.4m £m1999200020012002 Turnover1878204224523365 Gross wins417452503527 EBIT (1) 74.484.6112.0141.4 + 14%+ 32%+ 26% Third consecutive year double digit growth (1) Pre exceptional items

5. 5 Further, significant, product/revenue diversification Indicative proportion GW1999 % 2001 % 2002 % Horseracing595248 Greyhound racing161918 Football (inc World Cup)71114 Numbers (inc FOBT & virtual)548 AWPs776 Casino-24 Other (inc stadia)652 100

6. 6 Favourable income/cost movements post GPT anniversary Total Group gross win versus inflation 95.0 100.0 105.0 110.0 115.0 120.0 125.0 130.0 135.0 Dec-99 Feb-00 Apr-00 Jun-00 Aug-00 Oct-00 Dec-00 Feb-01 Apr-01 Jun-01 Aug-01 Oct-01 Dec-01 Feb-02 Apr-02 Jun-02 Aug-02 Oct-02 Dec-02 Feb-03 Rolling 12 months Index to 1999 = 100 Inflation Index Gross Win Index 21 wks Oct 6 – Mar 2 02/3 vs. 01/2 GW* + 17.7% Expenses* + 7.8 % * 13 weeks audited * 8 weeks mgmt accounts

7. 7 Operating Highlights Detailed Financials Outlook and Issues

8. 8 Interpretation of Results 1H, 012H, 011H, 022H, 02 -Lost fixtures/weather and Foot & Mouth epidemic -27 week period -Introduction of GPT (6 October) -Favourable results (1Q,02) -Horseracing Levy based on 10% GP (April) -World Cup (June) -IPO (June) -Betting exchanges -Unfavourable horseracing results (3Q, 02) -Acquire H&K chain and Sunderland greyhound stadium (September) -FOBT rollout

9. 9 Summary of Financial Results: FY02 v FY01 (pre-exceptional items) FY02 £m FY01 (3) £m Mvmt % TURNOVER (1) 3,365.32,452.237.2% GROSS WIN (2) 527.7502.65.0% GPT, Duty, Levy, Royalties and other related costs(111.7)(137.6)-18.8% GROSS PROFIT (CONTRIBUTION)416.0365.014.0% NET OPERATING EXPENSES(277.0)(257.9)7.4% ASSOCIATE INCOME2.44.9-51.0% EBIT141.4112.026.3% EBITDA158.1128.622.9% (1)Includes Casino drop and AWP cash-in-box net of VAT (2)Includes Casino drop and AWP cash-in-box inclusive of VAT (3)53 week financial period

10. 10 Summary of Earnings and Dividends: FY02 v FY01 (pre-exceptional items) FY02 £m FY01 (1) £m Mvmt % PROFIT BEFORE INTEREST AND TAXATION (EBIT)141.4112.026.3% NET INTEREST PAYABLE(59.9)(84.7)-29.3% TAXATION(22.9)(8.9)157.3% PROFIT AFTER TAXATION58.618.4218.5% DIVIDEND Interim(12.1)- Final(24.2)- RETAINED EARNINGS22.318.421.2% EARNINGS PER SHARE (pence) Basic16.96.9 Diluted16.86.9 (1)53 week financial period

11. 11 Proforma v Actual Earnings: FY02 (pre-exceptional items) Unaudited Proforma £m Actual £m PROFIT BEFORE INTEREST AND TAXATION (EBIT)141.4 NET INTEREST PAYABLE(35.4) (1) (59.9) PROFIT BEFORE TAXATION106.081.5 TAXATION(29.7) (2) (22.9) PROFIT AFTER TAXATION76.358.6 EARNINGS PER SHARE (pence) (3) Basic18.216.9 Diluted18.116.8 (1)Assumes average net indebtedness of £525m and an interest rate of 6.75% (2)Assumes an effective tax rate of 28% (3)Assumes 418.4m and 421.3m shares in issue for basic and diluted EPS calculations, respectively

12. 12 Analysis of Gross Win: FY02 v FY01 (1)Includes Traditional business, AWPs and FOBTs (2)Includes Sportsbook and Casino (3)27 week financial period (4)Adjusted to eliminate effect of additional trading week in 2H,01 1H02 £m 1H01 £m Mvmt % 2H02 £m 2H01 (3) £m Mvmt % Adjusted Mvmt (4) % Retail (1) 215.7211.81.8%203.2204.9-0.8%3.0% Telephone27.524.910.4%23.423.11.3%5.2% Interactive (2) 29.314.0109.3%25.621.419.6%24.2% Other1.21.5-20.0%1.81.080.0%86.9% Group273.7252.28.5%254.0250.41.4%5.3%

13. 13 Taxes and Duties: FY02 v FY01 FY02 £m FY01 (1) £m Mvmt %Explanation RETAIL GPT/Duty 57.895.1-39.2%FY benefit of GPT Levy 21.518.913.8%Changes in Levy arrangements (9 months) FOBT royalties 1.0-Roll out of FOBTs in 2H, 02 80.3114.0-29.6 AWPVAT/machine duty 7.17.01.4% TELEPHONE GPT/Duty 7.77.010.0%Net effect of GPT and repatriation of offshore business Levy3.71.994.7% Changes in Levy arrangements and repatriation of offshore business 11.48.928.1% INTERACTIVE: SPORTSBOOK GPT/Duty 6.33.296.9%Net effect of GPT and repatriation of offshore business Levy/licence fee0.80.1 Changes in Levy arrangements and repatriation of offshore business INTERACTIVE: CASINO Royalties 5.84.334.9% 12.97.669.7% OTHER -0.1 GROUP 111.7137.6-18.8% (1) 53 week financial period

14. 14 Net Operating Expenses: FY02 v FY01 FY02 £m FY01 (2) £m Mvmt % STAFF COSTS143.0129.210.7% PROPERTY COSTS41.539.45.3% DEPRECIATION16.716.60.6% COMMUNICATIONS15.914.112.8% ADVERTISING AND SPONSORSHIP Routine13.412.84.7% World Cup2.1- AWP/FOBT RENTALS7.56.221.0% OTHER36.939.6-6.8% OPERATING EXPENSES277.0257.97.4% Less: Costs allocated to Trading Divisions(265.5)(247.7)7.2% CENTRAL COSTS (1) 11.510.212.7% (1)Primarily central support functions and property costs (2)53 week financial period

15. 15 Underlying Growth in Operating Expenses: FY02 v FY01 1H01 £m 2H01 £m 1H02 £m 2H02 £m TOTAL OPERATING EXPENSES124.6133.3138.5 Less: 53 rd week(4.8) Repatriation costs(4.0) Increase in staff costs due to recycling/extended trading hours(1.5)(2.8)(5.0)(3.3) World Cup advertising(2.1) H&K / Sunderland acquisitions(1.4) FOBT rental(0.1)(0.3)(0.9) ADJUSTED OPERATING EXPENSES119.1125.6131.1132.9 10.1% 5.8% 5.5%4.4%1.4%

16. 16 Growth rate (Y on Y): Gross win0.5% Operating profit20.1% Retail: Results FY02 v FY01 >Benefit of GPT regime/recycling >Weak horseracing margins since Q2 02 coupled with unfavourable results in Q2/Q3 02 (normalised in Q4 02) >Strong growth in Numbers (e.g. virtual racing, FOBTs) and Football betting >Extended trading hours >7 new licenses for LBOs and 61 other development actions >Acquisition of 40 LBOs 20022001 (1) Gross winOperating profit (1) 53 week financial period

17. 17 Growth rate (Y on Y): Gross win6.0% Operating profit11.6% Telephone (1): Results FY02 v FY01 >164,000 active customers (1 January 2002: 150,000) >2001 adversely impacted by Foot & Mouth epidemic >Offshore business repatriated and gross win became subject to GPT and Levy >Call centres Leeds and Sheffield (opened Jan 02); Athlone closed April 02 >Good World Cup in Q2, 2002 >Unfavourable horseracing results in Q3, 2002 Gross winOperating profit (1) Aggregates onshore and offshore business (2) After repatriation provision of £3.1million (3) 53 week financial period (2) (3)

18. 18 Growth rate (Y on Y): Gross win55.1% Operating profit122.8% Gross winOperating profit (1)Sportsbook and Casino (2)53 week financial period Interactive (1) : Results FY02 v FY01 Sportsbook >Increase in active accounts on Sportsbook site (31 December 2002: 130,000; 1 January 2002: 100,000) >Excellent World Cup >Continuing growth in the market, with the focus on the UK Casino >Increase in active accounts on Casino site (31 December 2002: 43,000; 1 January 2002: 35,000) >Cross selling to Sportsbook and Telephone customers (2)

19. 19 Cash Generation: FY01 v FY02 (Pre-exceptional items) FY02FY01 (1) EBIT 141.4112.0 Associate income (2.4)(4.9) Associate dividend 5.7- Depreciation 16.716.6 Working capital/Other (4.1)9.5 Capital expenditure (routine) (20.4)(28.0) Capital expenditure (acquisitions) (20.8)- Taxation (9.5)(0.7) FREE CASHFLOW 106.6104.5 NET INDEBTEDNESS 481.4792.1 (1) 53 week financial period

20. 20 Current trading Gross win up 20% in the nine weeks ended 4 March 2003 compared to the corresponding period due to:- -Favourable sporting results -Introduction of FOBTs -Growth in Football and Numbers betting Double digit growth in gross win across all three channels

21. 21 Operating Highlights Detailed Financials Outlook and Issues

22. 22 Fixed Odds Betting Terminals 1820 installed, will be over 2000 by June From inception, net profit/terminal/week averages £220 Assume 50% of net profit substitutional - further research underway Contractual terms improving Gaming Board case – focus roulette DCMS focus proliferation – terminals and products in 4/shop

23. 23 Horseracing Margins/Exchanges WHAT’S THE PROBLEM YTD book margin 118.7 vs. LT average 121.3 -results & betting patterns determine actual margin -recycling of ‘supernormal’ winnings unknowable WHAT’S HAPPENING 10% levy/data charge from 1 April Application for judicial review denied Increasing pressure on NJPC to enforce rules Independent concerns re integrity issues Potential tax will mirror levy on exchange layers

24. 24 Relationships with content providers 1.Greyhounds *Brough Park and Sunderland give WH 15 % of BAGS fixtures *3 year BAGS contracts with seven tracks *BGRB deadline extended 2.Horseracing *Constructive collaboration on fixture planning *Rule 14 expected soon

25. 25 Other key areas of focus ‘03 Retail -Technology programme -Machine optimisation -Ongoing estate development Telephone/Internet sports betting -Single account -Mobile -Targeted marketing -Alternative payment methods On-Line Casino -Hosted poker -‘Arcade’ -Supply chain

26. Questions?

27. Preliminary Results Announcement Year ended 31 December 2002 10 March 2003