PokerTek Reports Results for Q2

CHARLOTTE, North Carolina – (PRESS RELEASE) -- PokerTek, Inc. (NASDAQ: PTEK) today announced financial results for the three and six months ended June 30, 2006. Net loss for the second quarter of fiscal 2006 was approximately $2,232,000, or ($0.24) per diluted share, compared with net loss of approximately $856,000, or ($0.12) per diluted share, in the second quarter of 2005. Net loss for the six months ended June 30, 2006 was approximately $3,823,000, or ($0.40) per diluted share, compared with net loss of approximately $1,581,000, or ($0.23) per diluted share, in the six months ended June 30, 2005.

Second Quarter Financial Results

Revenues from both license fees and equipment sales relating to the PokerPro(TM) system totaled approximately $314,000 during the three-month period ended June 30, 2006, up from zero in the same period in 2005. Revenues consisted of: aggregate license fees of approximately $133,000 from the Seminole Hardrock properties in Florida, three major cruise lines and the Chickasaw property in Oklahoma; and the remainder from equipment sales to our international distributor, Aristocrat International Pty. Limited, for its use in demonstrations of the PokerPro(TM) system to international licensing bodies and potential customers.

The net loss increased to approximately $2,232,000 from approximately $856,000 in the same period in 2005, creating a net loss per common share, basic and diluted, of ($0.24) compared to ($0.12) for the second quarter of fiscal year 2005. The increases in the following factors were the primary components affecting the increased loss for the second quarter of 2006 as compared to the second quarter of 2005: employees' salaries and benefits; costs associated with being a public company; fees related to compliance with licensing and regulatory requirements; and non-cash stock option expense recorded in accordance with Statement of Financial Accounting Standards No. 123R. Partially offsetting the increase in expenses was an increase in interest income.

"PokerTek continues to define and grow the market for automated poker tables," stated Lou White, PokerTek's Chief Executive Officer. "The market for automated poker tables is substantial. We believe that the collective profit pool that this technology taps into for casinos simply cannot be ignored. While expenses were in line with our operating plan, we are behind our revenue target as it has taken us longer than expected to more broadly introduce the PokerPro(TM) system to the market, which is attributable in part to regulatory delays. However, we are encouraged by many recent developments on the regulatory front, we are enthusiastic about our installation pipeline of announced and soon-to-be announced installations, and we are very proud of the progress that we continue to make toward our goals."

Year-to-Date Financial Results

Revenues from both license fees and equipment sales totaled approximately $787,000, up from zero in the same period in 2005. Revenues consisted of: aggregate license fees of approximately $493,000 from the Seminole Hardrock properties in Florida, three major cruise lines and the Chickasaw properties in Oklahoma; and the remainder from equipment sales to our international distributor, Aristocrat International Pty. Limited, for its use in demonstrations of the PokerPro(TM) system to international licensing bodies and potential customers.

The net loss increased to approximately $3,823,000 from approximately $1,581,000 in the same period in 2005, creating a net loss per common share, basic and diluted, of ($0.40) compared to ($0.23) for the first six months of fiscal year 2005. The increases in the following factors were the primary components affecting the increased loss for the first six months of 2006 as compared to the same period of 2005: employees' salaries and benefits; costs associated with being a public company; fees related to compliance with licensing and regulatory requirements; and non-cash stock option expense recorded in accordance with Statement of Financial Accounting Standards No. 123R. Partially offsetting the increase in expenses was an increase in interest income. At June 30, 2006, PokerTek had no debt and approximately $16.2 million total cash and cash equivalents.