Aristocrat Leisure, EssNet Sign Deal

SYDNEY, Australia – (PRESS RELEASE) -- Aristocrat Leisure Limited (ALL: ASX) announces a move into the fast growing interactive, server-based video lottery market with the execution of a Share Purchase Agreement for the acquisition of all of the issued capital of Scandinavian high technology gaming company, EssNet Interactive AB ("Interactive") for approximately A$70 million.

The Share Purchase Agreement is subject to a number of procedural conditions subsequent and is expected to be completed in May 2006.

Interactive develops, manufactures and markets next generation interactive system and video terminal hardware and software, utilising a leading-edge system offering, based on PC technology in a client-server architecture.

The highly scalable Interactive solution has an open system architecture that allows any content provider to port games onto its interactive video terminal platform.

This acquisition will allow Aristocrat to exploit the growing global market for server based video lottery product offerings. Another major benefit will be the use of the video lottery technology to accelerate development of in-casino and cross-casino server-based content delivery within traditional markets, which is expected to be a major growth sector in world gaming markets over the next 10 years.

Mr Paul Oneile, Aristocrat Chief Executive Officer and Managing Director said, "This is a key strategic opportunity for us to enter a segment of the global gaming market in which we do not currently compete. We anticipate that the demand for this type of product offering will grow significantly in future years in many jurisdictions, especially in Europe and Asia."

"The Interactive technology is world class and will also be of significant value to Aristocrat in our existing core markets as we continue to invest heavily in the development of our server-based gaming product offering," he added.

Following a global competitive evaluation, Interactive was awarded a contract by Norsk Tipping, the Norwegian lottery, in November 2003 for the supply of an interactive video lottery system and around 10,000 terminals.

The roll-out of this opportunity, pending resolution of a legal challenge in the European Courts, is expected to re-commence in early 2007. Mr Reidar Nordby, President of Norsk Tipping, said, "The Interactive system has been formally accepted by Norsk Tipping. In my view, the system is the most technologically advanced VLT system today."

Aristocrat has also entered into a Strategic Alliance Agreement with Tattersall's Limited ("Tattersall's"). This Strategic Alliance Agreement with Tattersall's represents a further step in the development of the strong relationship between two substantial Australian gaming companies, which operate in different parts of the industry value chain.

It will also enable Aristocrat to further develop and utilise Interactive's gaming system technology, the development of which included the active involvement of Tattersall's.

Aristocrat intends to commit significant research and development resources to ensure the optimisation of Interactive's potential. This is effectively a start-up operation and the financial performance of Interactive will be dependent on the speed of the roll-out of its products.

The earnings impact on Aristocrat in 2006 will be dilutive by approximately 1.5 - 2.0 cents per share, broadly neutral in 2007, but is expected to be accretive thereafter. This earnings impact is after an estimated charge of A$6 - A$7 million per annum, as a result of the amortisation of the value of intellectual property and other intangibles acquired.