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FLUXX AG turns attention towards Europe

FLUXX AG / Miscellaneous

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FLUXX AG turns attention towards Europe

- Schleswig-Holstein's cabinet authorises Prime Minister Carstensen to sign
the controversial State Treaty on gaming
- Even authors of the State Treaty doubting its lawfulness
- FLUXX stepping up expansion throughout Europe as its priority

Altenholz, July 10, 2007 – The Prime Minister of Schleswig-Holstein Peter
Harry Carstensen was today authorised by his cabinet to approve the
ratification process of the controversial draft of the State Treaty on
gaming. 'We note the political decision by the cabinet of the
Schleswig-Holstein government in the full awareness that personal
opposition to the State Treaty on gaming by the individuals in question,
and in particular by the Prime Minister, will not have changed,' declared
Rainer Jacken, Management Board spokesman of FLUXX AG. 'Including with his
support, we have gone to considerable lengths to find a politically
above-board solution. If the federal states' parliaments likewise now
ratify the draft treaty, the courts will simply override the State Treaty
again. All serious observers are absolutely convinced that this is what
will happen. It is totally unacceptable for a community of people that
regards itself as a state under the rule of law simply to trample on
fundamental rights, to disregard higher-order law such as European
Community law, and to act in complete defiance of the European Commission's
trenchant criticism.

The European Commission had already announced its intention to initiate new
infringement proceedings against the Federal Republic of Germany in view of
the serious infringement of rights by the State Treaty. 96.7 percent of all
infringement proceedings initiated by the European Commission in recent
years and brought before the European Court of Justice have been decided in
the European Commission's favour.

Rainer Jacken added: 'The hypocrisy surrounding the State Treaty on gaming
is intolerable. Contrary to what we keep hearing, it is not about the
common good, money or even gambling addiction. It is purely and simply
about protecting the jobs of a handful of lottery officials who
understandably fear for their future in a gaming market that is liberalised
throughout Europe – the incredible thing is that they have managed to
manipulate those in positions of political responsibility to their own
personal ends. They have succeeded in bringing the Prime Ministers to the
brink of risking billions of euros, over 35,000 jobs and subsidies for
sport, charities and culture. It's a complete scandal! If the draft State
Treaty on gaming becomes law, Germany will be thrown into unprecedented
legal chaos.'

Appraisals by numerous renowned lawyers have come to the conclusion that
the State Treaty on gaming is unlawful. And even the treaty's key authors
now seem to be having doubts as to whether it is legally watertight. At the
University of Hohenheim's symposium on gaming at the end of June, Georg
Nagel, Head of the Gaming Section at the North Rhine-Westphalia Ministry of
the Interior, admitted that the treaty had 'exposed flanks'.

The lack of unanimity in Germany's policy on gaming in particular is a bar
to the imposing of a monopoly on lotteries and sports betting: whereas the
running of slot machines and casinos, which partly are acknowledged to
constitute an addiction risk, is in the hands of private operators and is
unaffected by the new State Treaty on gaming, forms of gaming that are
demonstrably harmless such as sports betting and particularly lotteries are
to be nationalised for reasons of preventing addiction. In its
much-discussed Placanica ruling the European Court of Justice had made it
clear that a state monopoly could only be entertained as the last resort if
there were a coherent, conclusive policy on gaming. It also ruled that the
member state must first examine and prove that no milder means than a state
monopoly is available as a means of achieving its objectives. Other
national and international courts have now adopted this line of argument.

Whereas European jurisdictions are now turning their attention to the case
of Germany, FLUXX is looking towards other European countries. Rainer
Jacken explained: 'Until the situation in the German market has been
definitively clarified, we will be putting the development of our domestic
activities on the back burner in view of the new legal situation. In
parallel, specialist lawyers are examining FLUXX AG's compensation and
public liability claims against the federal states for a figure running
into the three-digit millions. Instead, we will be devoting most of our
capacity to the expansion of the FLUXX Group throughout Europe. We will be
intensifying the process of development that we embarked on last year for
our sports betting brand myBet.com and the Spanish subsidiary DigiDis. And
we will shortly be entering the British betting market with a competitive
product. In parallel, we are currently analysing various interesting,
profitable companies in the European gaming market as prospective takeover

About FLUXX:

FLUXX is a company specialising in the handling of lotteries and betting,
with registered office in Altenholz, near Kiel. The necessary rights and
licences and the technical and market-relevant expertise place FLUXX in a
position to be able to arrange any form of licensed gaming for consumers,
using a variety of sales channels. In addition to the self-marketed
services jaxx.de, jaxx.com, myBet.com and Telewette, FLUXX makes its
products and services available to other companies and organisations with
extensive customer contacts. These include the online services AOL,
Freenet, Lycos and Yahoo! Espana, the pay TV station Premiere, the
publisher Burda and the lottery companies in the states of
Schleswig-Holstein, Brandenburg and Mecklenburg-Western Pomerania. FLUXX AG
has been listed on the Frankfurt Stock Exchange (Deutsche Börse) since
September 1999 (ISIN DE000A0JRU67); the group currently has 145 employees.

Investor Relations & Corporate Communications
Stefan Zenker
Tel. +49 (40) 85 37 88 47
Fax +49 (431) 88 10 44 0
Mail stefan.zenker@fluxx.com

DGAP 10.07.2007 
Language:     English
Issuer:       FLUXX AG
              Ostpreußenplatz 10
              24161 Altenholz Deutschland
Phone:        +49 (0)431 88 104-0
Fax:          +49 (0)431 88 104-40
E-mail:       info@fluxx.com
Internet:     www.fluxx.com
ISIN:         DE000A0JRU67
WKN:          A0JRU6
Listed:       Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr
              in Berlin-Bremen, Düsseldorf, Hamburg, München, Stuttgart
End of News                                     DGAP News-Service