Annual Financial Report

26 March 2010

PartyGaming Plc

("PartyGaming" or the "Company")

2009 Annual Report and Notice of 2010 Annual General Meeting

2009 Annual Report

Following the release on 4 March 2010 of PartyGaming's annual results announcement for the year ended 31 December 2009, the world's leading listed online gaming company has today published its annual report and accounts for the year ended 31 December 2009 (the "Annual Report"). The Annual Report can be found on the Company's website, www.partygaming.com. Copies have also been posted today to those PartyGaming shareholders and depositary interest holders that elected to receive hard copies of the Annual Report.

2010 Annual General Meeting

The Annual Report incorporates the notice of the PartyGaming 2010 Annual General Meeting ("AGM"), which will be held at 11.00 a.m. (Central European Time) on Thursday 29 April 2010 at The Caleta Hotel, Catalan Bay, Gibraltar.

Listing Rule Filings

In accordance with Listing Rule 9.6.1 two copies of the Annual Report incorporating the notice of AGM and forms of proxy and direction have today been submitted to the Financial Services Authority and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility which is situated at the Financial Services Authority, 25 The Colonnade, Canary Wharf, London E14 5HS.

Disclosure and Transparency Rule 6.3.5

A condensed set of the financial statements for the year ended 31 December 2009 together with information on important events that occurred during that financial year and their impact on the financial statements, were contained in the annual results announcement made on 4 March 2010. That information, together with the information set out below, which is extracted from the Annual Report, constitute the material required by Disclosure and Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service. This announcement is not a substitute for reading the Annual Report.

2009 Annual Report Extracts

"Our risks

We continually ask ourselves the small but highly important question 'what if?' In 2009 we conducted six major workshops to assess whether any individual risk had increased, decreased or become obsolete since it was last assessed; to identify any new risks, especially from recent key business events and; to identify the likelihood of a risk occurring and its possible impact on the Group.

The workshops help to embed risk management within the business and improve responsibility and accountability for managing business objectives and risks. Facilitated by the Internal Audit & Risk Management team, they involved key people from each of the prime functions across all Group locations: Technology, Marketing, Human Resources, Operations, Finance, Legal and Company Secretarial.

An executive level workshop was also conducted by the Executive Risk Committee towards the end of 2009, to ensure that all strategic risks were identified and a consensus on the significant risks resulting from the individual functional workshops was agreed.

Many of the threats and challenges faced by online gaming companies are similar to those faced by other leisure and entertainment industries. They include competition, changes to consumer tastes, maintaining healthy financial ratios in compliance with banking covenants, loss of key personnel and so on. But there are also certain risks that are more specific to PartyGaming and to the online gaming industry that deserve particular mention. These risks are summarised in the table on this page and described in detail overleaf.

Technology

Technology is the engine of the online gaming industry and no operator can afford to stand still. Improving our gaming platform is a never-ending and vital task that continually sharpens our competitive edge, keeps us abreast of evolving consumer tastes and upholds our reputation for operating a safe and secure gaming environment.

Deploying our own proprietary technology across the bulk of our business helps mitigate the risks associated with technological change compared to those that are heavily reliant on third-party gaming software and systems. However, we do share the industry's general risks associated with providers for services such as broadband and communications, data management and storage. To counter these risks, we have back-up centres for disaster recovery purposes and we continually aim to restrict our reliance on any one supplier for any particular service.

Regulation

Regulatory compliance is a prime management process for the Group. Our geographic reach

means that our landscape comprises many different regimes, overlaid by a complex and diverse web of political and cultural attitudes towards online gaming. Our compliance obligations range from administration of our gaming licences in Gibraltar, Italy and Alderney to assessing what impact country-specific and pan-regional rules and regulations might have on our business and the wider industry. Whilst attitudes towards online gaming as a leisure pursuit continue to evolve, there is always a risk that certain territories may seek to outlaw online gaming.

We advocate that the best way to protect consumers is to license and regulate online gaming, a concept that is now being grasped by more countries around the world and particularly so in Europe with France and Denmark the next to join the UK and Italy by introducing online gaming regimes. We continue to believe that our conservative approach and proven management of regulatory compliance will deliver significant business opportunities over the medium to longer term.

Unlevel playing field in online poker

As noted previously in this Annual Report, the sites that continue to accept online gaming customers from the US have created an unlevel playing field that represents an ongoing threat to our poker business. To mitigate this threat, we are concentrating our efforts on operational excellence, increasing our brands' strength and relevance to consumers in a number of international markets by providing excellent gaming entertainment.

Taxation

Group companies operate for tax purposes only where they are incorporated, domiciled or registered. Revenues earned from customers located in a particular jurisdiction may give rise to further taxes in that jurisdiction. If such taxes are levied, either on the basis of existing law or the current practice of any tax authority, or by reason of a change in law or practice, then this may have a material adverse effect on the amount of tax payable by the Group. We manage these risks by considering tax as part of our business planning.

* Based on management's assessment"

Directors' Responsibility Statement

"In accordance with DTR 4.1.12 of the FSA's Disclosure and Transparency Rules, the Directors confirm to the best of their knowledge:

(a) the Group's financial statements have been prepared in accordance with IFRS and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group; and

(b) the Annual Report includes a fair review of the development and performance of the business and the financial position of the Group and the Company, together with a description of the principal risks and uncertainties that they face.

By order of the Board of Directors

Robert Hoskin

Company Secretary

4 March 2010"