HOLDINGS
PUBLIC LIMITED COMPANY
HOLDINGS
PUBLIC LIMITED COMPANY
THE WORLD’S NO.1 ONLINE CASINO AND POKER ROOM
Annual Report & Accounts 2005
Suite 601/701 Europort
Europort Road
Gibraltar
T: +350 49800
F: +350 48280
E: info@888holdingsplc.com
www.888holdingsplc.com
888 Holdings Public Limited Company Annual Report & Accounts 2005
Connecting…to the world’s no.1
online Casino and Poker room THE WORLD’S NO.1 ONLINE  
CASINO AND POKER ROOM
888 is one of the world’s most popular online gaming entertainment 
companies. Established in 1997 by pioneers of the online gaming 
industry, 888 has developed a strong brand, scale and member trust.
The business is based on its fully integrated proprietary operating 
software infrastructure backed up by impressive member relationship 
management and diversified payment processing systems. 888 benefits 
from industry leading multi-channel member acquisition capabilities.
888.com is our umbrella brand. We operate brands 
across a range of online gaming websites, such 
as 888.com, Casino-on-Net.com, PacificPoker.com 
and ReefClubCasino.com. The main products offered 
at these websites include traditional casino table 
games such as blackjack, roulette and craps as well 
as slot machines, video poker, poker ring games and 
poker tournaments.
Casino-on-Net is available in 11 languages. 888 also 
enjoys a diversified geographical balance with 45% of 
Net Gaming Revenue from outside the USA. 888 
provides members with a trustworthy and fair 
gaming environment.
Group Websites
A range of shareholder information is available in 
the Investor Relations area of the Group’s website, 
www.888holdingsplc.com, including:
Latest information on the Group’s share price
Information on the Group’s financial performance 
News and events
The following websites can also be accessed through 
the Group’s main web portal 888.com.
Casino
888’s Casino games are offered through its 
Casino-on-Net and Reef Club Casino offerings.
www.Casino-on-Net.com
www.ReefClubCasino.com
Poker
888’s Poker offering is through Pacific Poker.
www.PacificPoker.com
Betmate
Offers access to a betting exchange for non-USA members 
only, including sporting and non-sporting betting.
www.Betmate.com
888.tv
A portal for skill games allowing members to download 
games, open accounts and play tournaments.
www.888.tv
888.info
Allows members to practise their gaming skills for fun 
through a number of key Casino and Poker games. 
www.888.info
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Shareholder Information
Financial Advisers
HSBC Bank plc
8 Canada Square, London E14 5HQ
Principal Bankers
The Royal Bank of Scotland plc
280 Bishopsgate, London EC2M 4RB
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street, London EC4Y 1HS
Hassans
57/63 Line Wall Road
Gibraltar
Auditors
BDO Stoy Hayward LLP
Chartered Accountants
8 Baker Street
London W1U 3LL
BDO Fidecs Chartered 
Accountants Limited
Montagu Pavilion
8-10 Queensway
Gibraltar
Contents
01 Highlights
02 888 at a Glance
04 Marketing
06 Technology
08 People
10 Chairman’s Statement
12 Chief Executive’s Review
16 Financial Review
20 Board of Directors
22 Responsible Gaming
23 Regulatory and Compliance Review
24 Corporate Governance
29 Remuneration Report
35 Directors’ Report 
37 Independent Auditors’ Report
38 Consolidated Income Statement
39 Consolidated Balance Sheet
40 Consolidated Statement of Changes in Equity
41 Consolidated Statement of Cash Flows
42 Notes to the Consolidated Financial Statements
56 Company Balance Sheet
57 Company Statement of Changes in Equity
58 Company Statement of Cash Flows
59 Notes to the Company Financial Statements
IBC Shareholder Information
Incorporated in Gibraltar with registered 
number 90099
Shareholder Services
All enquiries relating to Ordinary Shares, 
Depository Interests, dividends and 
changes of address should be directed 
to the Group’s Transfer Agent:
Capita Registrars
The Registry, 34 Beckenham Road
Beckenham, Kent BR3 4TU 
Tel: 0870 162 3100
www.capitaregistrars.com
Further Information
For further information please contact:
Company Secretary
888 Holdings Public Limited Company
Suite 601/701
Europort, Europort Road
Gibraltar
info@888holdingsplc.com 0 50 100 150 200 250 300
NET GAMING REVENUE (US$million)
2005
2004
2003
271.0
177.9
122.5
0 20 40 60 80
PROFIT AFTER TAX* (US$million)
2005
2004
2003
65.2
41.1
19.5
0 20 40 60 80 100
NET GAMING REVENUE (US$million)
Q405
Q305
Q105
Q404
Q304
Q204
Q104
Q205
77.2
70.0
65.0
58.8
49.7
44.8
41.8
41.6
0 30 60 90 120 150 180
NET GAMING REVENUE: CASINO (US$million)
2005
2004
2003
161.2
138.6
114.5
0 5 10 15 20 25
REGISTERED MEMBER ACCOUNTS
AT YEAR END (million)
2005
2004
2003
23.2
17.9
13.2
0 1 2 3 4 5 6
REAL MONEY REGISTERED 
MEMBER ACCOUNTS (million)
2005
2004
2003
5.5
3.7
2.5
0 20 40 60 80 100 120 140
ACTIVE CASINO MEMBERS (’000)
Q405
Q404
Q403
97.6
66.1
42.9
0 40 80 120 160
NET GAMING REVENUE: POKER (US$million)
2005
2004
2003
109.8
39.3
8.0
*Excluding share benet charges
0 50 100 150 200 250
ACTIVE POKER MEMBERS (’000)
Q405
Q404
Q403
233.3
123.4
21.7
Highlights
Net Gaming Revenue for the year rose to US$271 million, an increase of 52% above 2004
Net Gaming Revenue from Casino during the year rose to US$161 million, an increase of 16% above 2004
Net Gaming Revenue from Poker during the year rose to US$110 million, an increase of 179% above 2004
Profit after tax* for the year rose to US$65 million, an increase of 59% above 2004
Adjusted EPS* for the year rose to 19.3¢, an increase of 58% above 2004 
Net cash generated from operating activities rose to US$88 million, an increase of 72% above 2004
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Operational Highlights Financial Highlights
01 888 Holdings Public Limited Company Annual Report & Accounts 2005 888 at a Glance
888 is one of the world’s most 
popular online gaming entertainment 
companies. 888 develops and 
manages all significant aspects of its 
business in-house, including software 
development, marketing, business 
development, back-office payment 
processing, risk management and 
member relationship management.
OPERATIONS: 888’S OPERATIONAl ARm IN 
GIb RAl TAR IS RESPONSIbl E f OR Th E d Ay- TO-d Ay 
Ru NNING Of Th E GROu P’S fl AGSh IP GAm ING 
b RANd S ANd PROduc TS, INclud ING m Emb ER 
REl ATIONSh IP m ANAGEm ENT, PROm OTIONS, 
l Oy Al Ty PROGRAmm ES ANd RISk m ANAGEm ENT.
m ARk ETING: 888’S m ARk ETING IS PRINc IPAlly 
Pl ANNEd, SOu Rc Ed ANd Ex Ecu TEd Th ROu Gh 
ITS IN-h Ou SE m ARk ETING ARm wh Ich h AS 
Accumul ATEd SIGNIf Ic ANT c REATIv E ANd 
m ARk ETING Ex PERIENc E f Ocu SING ON 
Ach IEv ING h IGh RETu RN ON ITS INv ESTm ENT-
d RIv EN c Am PAIGNS. 
TEch NOl OGy : 888 d Ev El OPS IN-h Ou SE All 
Of Th E c ORE TEch NOl OGy ASPEc TS Of ITS 
mul TI-Pl Ay ER cASINO ANd P Ok ER ROOm 
GAm ING SOf Tw ARE.
PAym ENT SOlu TIONS: Eff Ic IENT ANd REl IAbl E 
PROc ESSING Of PAym ENTS IS c Ruc IAl TO 
m Emb ER Acqu ISITION ANd RETENTION. 888 
Off ERS ITS m Emb ERS A w Id E RANGE Of 
ONl INE, REAl- TIm E PAym ENT OPTIONS.
02 NET GAMING REVENUE BY 
GEOGRAPHICAL MARKET
1. USA: 55%
2. UK: 20%
3. EUROPE: 17%
4. REST OF THE WORLD: 8%    
1
2
3
4
The World’s No.1 
oNli Ne Casi No aNd 
Poker r oom
We have over 23 millio N 
r egis Tered member a CCouNTs 
World Wide WiTh members 
sPaNNiNg 177 CouNTries.
Casi No-o N-NeT is NoW 
offered To members 
arou Nd The World i N 
11 la Nguages. Pa CifiC 
Poker is offered i N  
four la Nguages.
888 has Nearly 900 
eNThusias TiC aNd 
Tale NTed emPloyees 
World Wide.
03 888 Holdings Public Limited Company Annual Report & Accounts 2005 AT ANy ONE TIm E, Th ERE h Av E b EEN hu Nd REd S 
Of Ad c Am PAIGNS IN 10 d Iff ERENT l ANGu AGES, 
SPANNING 30 d Iff ERENT c Ou NTRIES, Ex POSING 
Ou R PROduc TS TO Th E w Id EST POSSIbl E 
Aud IENc E.
b y SPONSORING TEl Ev ISEd SPORTING Ev ENTS, 
TEAm S ANd AThl ETES, w E ARE STRENGTh ENING 
Ou R b RANd. Ou R d EAl w ITh mI ddl ESb ROu Gh 
fOOT b All c lub IS ONE Of wh Ich w E ARE 
PARTIcul ARly PROud ANd IS NOw IN ITS 
SEc ONd y EAR.
SOm E 15 NEw b ANNERS ARE c REATEd ON 
A d AIly b ASIS ANd Add Ed TO A b ANNER 
b ANk Numb ERING m ORE Th AN 20,000.
IN 2005 Ou R TOTAl m ARk ETING SPENd 
Exc EEd Ed US$100 m Ill ION Ac ROSS Ou R 
v ARIOu S m ARk ETING ch ANNEl S – ONl INE 
m Ed IA, Aff Il IATES, Offl INE ANd OTh ER 
m ARk ETING ANd PROm OTIONAl INITIATIv ES.
Marketing
Our marketing strategy is driven by 
three key principles:
Relevant and motivating member 
proposition: consumer needs 
underpin our marketing activity. 
Understanding player behaviour 
informs our product development. 
Localising our offer by both country 
and consumer segment is a key 
component of driving both trial and 
repeat usage of our products.
Quality of brand: one umbrella brand 
888.com serves all our products. 
This helps to maintain high 
awareness and ensure flexibility 
in targeted local communication 
whilst guaranteeing global 
consistency in messages.
Integrated marketing campaigns: a 
consistent communication approach 
with tailored activities leveraged 
through all channels. For example, 
the sponsorship of the “888.com 
World Snooker Championship” 
will feature traditional PR and 
advertising, as well as web-based 
and viral marketing activity online.
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04 buildi Ng a  
Truly global 
bra Nd
05 888 h AS APPROAch Ed Th E GAm ING INdu STRy AS 
AN INf ORm ATION TEch NOl OGy c Om PANy RATh ER 
Th AN AS A b OOkm Ak ER Th AT IS m Ov ING ONl INE.
888’S RESIl IENT, Sc Al Abl E ANd d Iv ERSIf IEd 
INf ORm ATION TEch NOl OGy INf RASTRuc Tu RE 
c Om PRISES hu Nd REd S Of SERv ERS Su PPORTING 
Num EROu S w Eb Sy STEm S, PROPRIETARy 
GAm ING Pl ATf ORm S ANd b Ack -Off Ic E Sy STEm S. 
888’S STRONG INf ORm ATION TEch NOl OGy 
Pl ATf ORm IS b EING d Ev El OPEd TO INc REASE 
Th E Eff Ic IENcy w ITh wh Ich 888 INTEGRATES 
NEw GAm ES, ENAbl ING IT TO Ex PANd 
ORGANIc Ally ANd TO INc REASE Th E 
Sc Al Ab Il ITy Of ITS OPERATION.
Eff Ic IENT ANd c OST-Eff Ec TIv E PAym ENT 
PROc ESSING h AS b Ec Om E ESSENTIAl f OR 
Succ ESS IN Th E ONl INE GAm ING m ARk ET.
Technology
Having the expertise to develop all 
significant aspects of gaming software 
in-house allows us to control and 
provide a flexible, secure and user-
friendly platform for members.
Our information technology platform 
not only handles over one million site 
visitors a day with more than 10,000 
members playing concurrently at 
peak times, but it also enables 888 
to provide a distinctive product and 
brand feel. 
The front-end playing experience is 
key, but robust back-office systems, 
such as payment processing, risk 
management and data mining, are 
also vital.
06 a safe gami Ng 
eNviro NmeNT
07 Th E GREATEST ASSET 888 h AS IS ITS PEOPl E. 
Th E TAl ENTEd TEAm b ASEd AROu Nd Th E w ORld 
c REATE, d ESIGN, m ANuf Ac Tu RE ANd d El Iv ER 
Ou R Sy STEm S.
Ou R SAl ES ANd m ARk ETING GROu PS h Av E 
Succ EEd Ed IN ch All ENGING m ARk ETS w ITh 
w Id E-RANGING c Am PAIGNS GOING l Iv E EAch 
d Ay ANd m ARk ET l EAd ING SPONSORSh IP 
d EAl S REc ORd ING Exc Ell ENT RESul TS.
wE PROv Id E 24/7 c ONTINu Ou S m Emb ER 
Su PPORT IN 11 l ANGu AGES f OR cASINO -ON-NET 
ANd f Ou R l ANGu AGES f OR PAc If Ic P Ok ER 
Th ROu Gh Ou T Th E w ORld, w ITh TOll-f REE 
Numb ERS Av AIl Abl E IN 25 c Ou NTRIES.
Th ESE PEOPl E, ANd hu Nd REd S m ORE l Ik E Th Em, 
ARE Th E m AIN REASON why 888 IS TRuly A 
w ORld l EAd ER IN Th E ONl INE GAm ING INdu STRy.
People
888 has nearly 900 enthusiastic and 
talented individuals. Our member 
support team is both multiskilled and 
multicultural enabling us to provide 
continuous support in 11 different 
languages, 24/7.
By taking our recruitment “to the 
source” through a variety of global 
Open Days, we enhance the quality  
of our service through the deployment 
of people who truly understand the 
local culture they are serving. In all our 
training and development strategies 
and initiatives the primary focus is on 
maintaining excellent member service. 
The member is at the centre of all 
our activities. 
At 888 we believe that successful 
business progression comes from an 
“inclusive” perspective.  We therefore 
strive to ensure that the feelings and 
ideas of all employees are heard, 
discussed and, where appropriate, 
acted upon.
2006 will see the launch of the 888 
Certification Scheme, an initiative that 
develops all employees – regardless of 
level – covering a range of disciplines 
unique to our brand. Through this 
initiative we fully expect to develop  
and motivate our dedicated employees 
even further. 
08 r ela TioNshi Ps 
based o N Trus T
09 888 Holdings Public Limited Company Annual Report & Accounts 2005 Chairman’s 
Statement
888 is Well Pla Ced To beNefiT from 
exPaNsio N iNTo NeW geogra PhiC 
marke Ts – as i NTer NeT PeNeTra TioN 
CoNTiNues a PaCe
The Board of 888 Holdings Public 
Limited Company is pleased to 
present its first set of full year 
results since the Company’s 
flotation in October 2005 – a major 
step forward and the successful 
result of a long-term growth plan 
for the business.
These results demonstrate the 
strength and growth potential of our 
business which is, today, one of the 
world’s most popular online gaming 
entertainment companies. During 
the year we continued to improve 
our financial performance. We 
developed our positions in both 
Casino and Poker by building on  
our key strengths of an industry 
leading brand, a highly diversified 
gaming offering and a widening 
geographic footprint.
In the year to 31 December 2005 
we achieved total Net Gaming 
Revenue of US$271 million and 
underlying Profit after tax excluding 
share benefit charges of US$65 
million. Continuing to build profitable 
sustainable topline momentum is 
key to our long-term success. 
our s Tre NgThs
A proven, resilient business 
model
Experienced Directors 
and long serving senior 
management who are 
industry pioneers
Fully integrated proprietary 
operating software 
infrastructure
Scalable technology platform
Industry leading in-house 
marketing capabilities
Industry leading member 
relationship management
Sophisticated, effective 
payment processing and risk 
management systems
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Richard Kilsby, Chairman
10 By the end of the year we had more 
than 23 million registered member 
accounts and over 330,000 active 
members, representing 177 different 
countries and supported 11 different 
languages for our Casino-on-Net 
offering – a real testament to the 
strength and global appeal of our brand.
The significant achievements of this 
year would not have been possible 
without the support, contribution and 
dedication of our staff whose passion, 
knowledge and enthusiasm gives us a 
further competitive advantage in this 
fast moving market.
The online gaming market is maturing 
and, whilst online regulation is still in its 
infancy, we welcome the UK’s entry into 
the online space through the Gambling 
Act 2005. Of note is the Gibraltar 
Gambling Ordinance which introduces a 
bespoke regulatory regime in Gibraltar 
for remote gaming and further 
consolidates Gibraltar’s position as a 
first-class online gaming jurisdiction. 
Generally, we are seeing a change  
in emphasis of regulators, who are 
looking beyond the grant of licences 
and are focusing more on compliance 
and codes of conduct within the 
industry. This is an area where 888 
has sought to take the lead. We  
were one of the founding members  
of eCOGRA (e-Commerce Online 
Gaming Regulation and Assurance),  
an independent body which has 
Our strategy is clear. We aim to 
create sustainable shareholder 
value by becoming the market 
leader in the global online 
gaming industry, providing our 
members with a comprehensive 
selection of uniquely-created 
gaming activities.
developed a series of self-regulatory 
guidelines for the online gaming 
industry. As online gaming develops 
into a mainstream leisure activity we 
believe further clarification of the 
regulatory position in relation to online 
gaming would be a positive driver  
for growth by enhancing consumer 
confidence and trust in the sector.
board
I am pleased to have the opportunity to 
chair 888 and to welcome to the Board 
three new Non-executive Directors: 
since August 2005, Michael 
Constantine, a former Inspector and 
Acting Commissioner of the Gibraltar 
Financial Services Commission and 
Brian Mattingley, former Executive 
Director of Gala Group Plc; and from 
March 2006 Amos Pickel, Chief 
Executive of Red Sea Hotels Ltd.
With their outstanding complementary 
experience, I am confident that our 
new Non-executive Directors are 
superbly qualified to provide invaluable 
support to our executive team in the 
years ahead.
The Board’s commitment to the 
highest standards of corporate 
governance and corporate social 
responsibility is detailed in the 
Corporate Governance section of 
this report on pages 24 to 28.
Finally, on behalf of the Board, I  
would like to express the Group’s 
appreciation to Marie Stevens for  
her contribution.
dividend
The Board intends to implement, in 
2006, the dividend policy set out in 
the Financial Review on page 19.
outlook
Our strategy is clear. We aim to create 
sustainable shareholder value by 
becoming the market leader in the 
global online gaming industry, providing 
our members with a comprehensive 
selection of uniquely-created gaming 
activities and offering a secure, trusted 
entertainment experience.
I am pleased to report that we have 
already begun the new financial year 
with strong organic growth. 2006 will 
see continued investment in the 888 
brand through worldwide innovative 
marketing initiatives, such as the 
recently announced five year 
sponsorship of the World Snooker 
Championship, which will be known 
as the “888.com World Snooker 
Championship”.
888 is well placed to benefit from 
expansion into new geographic 
markets – as Internet penetration 
continues apace and we react to local 
regulatory developments. We will also 
look to extend the range of products 
so that we can offer members the 
complete online entertainment 
experience. All of this gives me great 
confidence about our future prospects.
Richard Kilsby
Chairman
11 888 Holdings Public Limited Company Annual Report & Accounts 2005 Chief Executive’s 
Review
The TWo mos T imPor TaNT Words 
iN our iNdus Try , “Trus T me”
John Anderson, Chief Executive Officer
888 is an industry-leading brand 
which is synonymous with quality, 
fairness and trust. As a business  
it has delivered a number of 
consecutive years of growth in 
Profits. 2005 was no exception, 
and we are delighted to report Profit 
after tax for the year excluding 
share benefit charges of US$65 
million, up 59% on 2004, a more 
than satisfactory increase.
Our flotation in October on the 
London Stock Exchange marked  
an important step in our goal to 
become the market leader in the 
global online gaming entertainment 
industry. This will enable us to 
increase further our brand profile, 
recognition and credibility and  
will also give us an acquisition 
currency. This is a key part of  
our strategy and we believe the 
industry has matured to a stage 
where consolidation is inevitable 
and I intend that 888 will be at  
the heart of this. Our industry  
has arrived and will be here on  
a permanent basis. 
The business is in great shape, 
and the year to 31 December 2005 
saw us achieve record Net Gaming 
Revenue and Profits. New member 
registrations in both Casino and 
Poker were significantly up at 
5.3 million.
The main driver behind our 
outstanding growth has been our 
in-depth knowledge and experience 
of the industry built up since our 
inception in 1997. We understand 
what our members want and we are 
continually upgrading our product 
offering to retain existing and 
attract new players. Most 
importantly, we continue to provide 
our s Tra Tegy
Investment in and leverage 
of the 888 brand
Expansion into new 
geographic markets
Development and expansion 
of software platforms to 
provide a “one stop shop” 
through organic growth and 
selective acquisitions
Leveraging 888’s large 
member database to 
maximise cross-selling and 
up-selling opportunities 
Continued development of 
efficient payment processing 
options that suit new target 
markets and audiences
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12 members with a secure and trusted 
environment in which to play. In the 
interests of consumer protection, we 
were a founding member of eCOGRA, 
the pre-eminent industry benchmark 
and I am a member of its board.
Whilst member acquisition is key, 
member retention is paramount.  
As well as the products we offer, we 
have invested in the highest quality 
infrastructure and systems to ensure 
that we sustain our members’ interest 
and do not give them a reason to play 
anywhere else. We will continue to add 
new entertainment options through 
selective acquisition or in-house 
development and we will expand  
our software platforms to allow for 
increased scalability.
geographic spread
No business should have an over-
reliance on any one particular market 
and those in our industry are no 
exception. We don’t believe in having 
all our eggs in the one basket and I 
personally consider our geographic mix 
of business to be the widest in the 
industry. By making our product 
available in up to 11 languages we 
have grown our non-USA business  
at such a rate so as to reduce our 
dependence on the USA, to 55%  
of our business without sacrificing 
volume. Our second largest revenue 
stream comes from the UK market, 
representing 20% of our mix. In the 
UK, 888 has come from nowhere in 
2003 to become the top brand in the 
industry in 2005. This success is 
mainly due to the highly successful 
offline advertising campaigns we ran  
in the UK and high profile selected 
sponsorships. We will be repeating 
this strategy of awareness throughout 
mainland Europe in the coming year. 
our Product offering
During the year we have succeeded in 
growing Net Gaming Revenue and new 
player sign-ups across all our categories. 
In 2004 the total amount wagered in 
the online casino market was estimated 
at US$53.9 billion (source: CCA).
Since its inception in 1997 our Casino 
product, Casino-on-Net, has continued 
to be the leading online casino brand 
with member numbers now at a level 
of 4 million real money registered 
member accounts. 
2005 saw continued growth in Net 
Gaming Revenue from US$178 million  
to US$271 million, an increase of 52%. 
This is mainly attributable to the 
expansion of our online and offline 
marketing programmes and the 
introduction of new distribution channels 
through our affiliate programmes.
We also operate an additional Casino 
brand, Reef Club Casino, that we 
introduced in 2002. By offering 
members another Casino brand we 
optimise their choice which in turn 
underpins our member retention by 
keeping players on our sites.
In January 2006, 888 launched an 
entirely new Casino product with a new 
graphical user interface, new industry 
leading video-slot machines and 
promotion features to provide  
our members with an even more 
sophisticated visual and interactive 
No business should have an over-
reliance on any one particular 
market and those in our industry 
are no exception. We don’t believe 
in having all our eggs in the one 
basket and I personally consider 
our geographic mix of business to 
be the widest in the industry.
experience to enhance their playing 
environment. We also plan to add an 
additional language to our Casino in 
the first quarter of 2006. 
The online poker market has 
experienced remarkable growth since 
2002 and I have no doubt it is fast 
becoming a mainstream entertainment 
activity. Poker has always been played 
in the USA and in fact is part of the 
fabric of USA society. People of all ages, 
including families, have always played 
Poker as part of their recreational 
time. More and more countries 
throughout the globe are playing the 
game and this is resulting in a decline 
in the dominance of the USA market. 
Poker is cool and here to stay.
Our Poker product, Pacific Poker, was 
ranked four in 2005 and in the year, 
Net Gaming Revenue from our Poker 
business exhibited strong growth, 
increasing by 179% to US$109.8 
million (2004: US$39.3 million). This 
result partly reflects an increase in 
888’s marketing efforts but is also a 
by-product of the exponential growth of 
the phenomenon that is online poker.
We are continually upgrading our 
proprietary products and have recently 
upgraded our Poker offering with a multi-
language format. It is now operational in 
English, German, Italian and Swedish. 
We introduced a new e-wallet focusing 
on Spain, Germany, Netherlands, Italy 
and France, thereby expanding further 
our geographical presence in non-USA 
markets. 888 plans to roll-out a further 
two new languages and a new Jackpot 
feature for Pacific Poker in the first 
quarter of 2006.
13 888 Holdings Public Limited Company Annual Report & Accounts 2005 Chief Executive’s 
Review
Betmate, our betting exchange, is a 
white label product in conjunction 
with Betdaq, the second largest 
betting exchange in the UK. It has 
been in operation since 2004 and 
acts as a member retention tool  
by complementing our Casino 
offerings. It offers access to a 
betting exchange for non-USA 
members only. It has performed 
satisfactorily over the period.
In order for us to give our members 
a “one stop shopping” experience 
we need to offer them a 
sportsbook. We are currently 
examining our options to achieve 
this. We will not take sports bets 
from US citizens, however we will 
take bets on American sports 
events from non-US citizens.
r egulatory developments
Whilst the application of existing 
laws to online gaming is still to be 
clarified in most jurisdictions, in 
April 2005 the UK Government 
passed the Gambling Act, which 
includes the licensing of online 
gaming. I believe the UK’s position 
is the first domino in what will 
become a legislative network 
throughout mainland Europe.
We continue to monitor the 
legislative position in the USA, 
where many attempts have been 
made in the past to prevent the 
instruments for the financial 
payment of internet gaming to take 
place. It is our view that this will 
continue to be our main challenge. 
We also monitor on a continual 
basis all jurisdictions to ensure 
we understand local regulatory 
positions and are alerted early to 
any potential developments. The 
world has still to get to grips with 
this industry and the laws which do 
exist can change very rapidly. Part of 
what we must do as an industry is to 
lobby all of the countries of the world 
so that legalisation and licensing of 
Internet gaming becomes the norm 
rather than the exception. 
innovative marketing approach
The 888 brand is a core aspect  
of our marketing strategy and is  
key to building and maintaining  
our business. Strong branding is 
not only critical in differentiating  
our business but a recognisable 
brand builds trust which is a  
key consideration affecting a 
consumer’s choice of provider.
Our marketing strategy includes both 
online advertising, such as search 
engine optimisation and offline 
activities. This includes mass media 
advertising, direct mail, sports 
marketing and sponsorship, such as 
that of Middlesbrough Football Club 
where our shirt sponsorship deal 
has been a huge success. Recently 
we also signed up to be the sponsor 
of the iconic World Snooker 
Championship. The event is held  
at the Crucible in Sheffield, UK and 
is the most important event in the 
snooker calendar. Our sponsorship 
not only catapults us into emerging 
markets such as China and the Far 
East, where snooker has a huge 
following, but our brand will be fully 
14 future Prospects
I have no doubt that this industry  
is here to stay and the market will 
continue to grow in line with increasing 
Internet penetration throughout the 
world. As stated at flotation, our goal 
is to become market leader and offer  
a “one stop shop” online leisure 
experience. This expansion will be 
achieved both organically and through 
selective acquisition. 
Our 2005 results confirm we are 
heading in the right direction to 
achieve this. We are confident that the 
continued focus on our strategic goals, 
through a systematic and evidence-
based approach, will provide the 
opportunities to deliver further positive 
results in the future.
The, albeit early, trends in 2006 
confirm our confidence in the future. 
This year we will expand into more 
countries with better products and  
we will continue to pursue excellence 
in every facet of our business.
John Anderson
Chief Executive Officer
exposed for hundreds of hours in the 
UK and Europe. We consider the deal  
to be a major step in continuing to 
spread global awareness of the 888 
brand. As part of this 888 will also be 
an associate sponsor of the Masters, 
Grand Prix and UK Championship 
snooker events.
member r elationship management
888 has a first class reputation for  
its member relationship management. 
Our member support is as international 
as our member base and we currently 
provide support in up to 11 languages, 
available 24/7. Our call centres offer 
interactive services and support toll-
free/free-phone numbers, email and 
web-chat platforms as well as online 
self-help options. Our staff are all highly 
trained and undergo an ongoing training 
programme to ensure we remain at the 
cutting edge of service excellence.
We have consistently focused on 
maintaining and enhancing our 
member support services and have 
developed a valuable proprietary 
member database of over 23 million 
registered members. We believe there 
is significant opportunity in both the 
cross-selling and up-selling of this 
database to maximise member 
retention and lifetime value. 
Payment systems
Payment systems are the lifeblood of 
our industry. The number of options we 
use has increased from four in 2000  
to 22 in 2005. We must continually 
upgrade and seek new systems in order 
to give all of our members in different 
markets local methods enabling them 
to pay and play seamlessly.
I cannot emphasise enough the 
importance of making available a  
wide variety of payment methods to 
support members in different locations 
and with different needs. This alone 
shatters the myth that barriers to  
entry to our industry are low. The fact 
is that barriers to successful entry are 
extremely high.
back-office support
Our proprietary back-office systems 
are state of the art and form an 
excellent base to keep our members 
satisfied. We spend a lot of money  
to attract new members and it is vital 
we create a service environment that 
keeps them.
People
Our people are totally dedicated and 
include many of the pioneers of the 
industry. They are not only good at 
what they do and have a tremendous 
track record but are focused on the 
future success of the Group. I would 
like to add my personal thanks to each 
one of our employees worldwide for 
what they have achieved in 2005.  
Our success is their success.
There is no doubt that this is an 
industry which is here to stay and 
the market will continue to grow 
in line with increasing Internet 
penetration.
15 888 Holdings Public Limited Company Annual Report & Accounts 2005 100
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01/03/06
888 SHARE PRICE
Financial Review
Aviad Kobrine, Chief Financial Officer
a year of Transformation, 
growth and diversification
Flotation on the London  
Stock Exchange
2005 saw the transformation of 
888 from private to public company 
and, on 4 October 2005, Ordinary 
Shares of the Company were 
admitted to the main list of the 
London Stock Exchange at an offer 
price of £1.75, representing a 
market capitalisation of £590 
million. On 16 December 2005 
the Company was admitted to  
the FTSE 250 Index and as at 
30 December 2005 (the last 
trading day of the year) the  
closing share price was £1.94.
Growth
The year was characterised by 
record growth with Net Gaming 
Revenue reaching US$271.0 million 
(2004: US$177.9 million), a 52% 
increase over 2004 and Profit after 
tax, excluding share benefit 
highligh Ts
2005 was a record year for 
888 characterised by strong 
growth, record profits and 
cash generation coupled 
with accelerated geographic 
diversification, all achieved 
during a busy IPO year
888 finished 2005 with a 
strong balance sheet and a 
positive cash position
Net Gaming Revenue during 
the year rose to US$271.0 
million, an increase of 52% 
above 2004
Profit before tax and share 
benefit charges during the year 
rose to US$67 .4 million, an 
increase of 56% above 2004
Net cash generated from 
operating activities rose to 
US$88.3 million, an increase 
of 72% above 2004
■
■
■
■
■
5.3 millio N NeW regis Tered 
member a CCouNTs Were o PeNed 
of WhiCh 1.8 millio N Were real 
moNey member a CCouNTs
16 1
2
3
4
1
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2005
1. USA: 55%
2. NON-USA: 45%
0 10 20 30 40 50 60
THE UK, NET GAMING REVENUE 2002–2005
2005
2004
2003
97.6
66.1
42.9 42.9
2002 42.9
GEOGRAPHIC SEGMENTATION, NET 
GAMING REVENUE – NON-USA 2005
1. UK: 44%
2. EUROPE: 38%
3. AMERICAS: 10%
4. REST OF THE WORLD: 8%
2
0 40 80 120 160
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2003-2005
2005
2004
2003
■ USA    ■ Europe    ■ Rest of the World
101
54
27
12
9
148
103
64
62
45
22
13
13
1
2
3
4
1
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2005
1. USA: 55%
2. NON-USA: 45%
0 10 20 30 40 50 60
THE UK, NET GAMING REVENUE 2002–2005
2005
2004
2003
97.6
66.1
42.9 42.9
2002 42.9
GEOGRAPHIC SEGMENTATION, NET 
GAMING REVENUE – NON-USA 2005
1. UK: 44%
2. EUROPE: 38%
3. AMERICAS: 10%
4. REST OF THE WORLD: 8%
2
0 40 80 120 160
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2003-2005
2005
2004
2003
■ USA    ■ Europe    ■ Rest of the World
101
54
27
12
9
148
103
64
62
45
22
13
13
1
2
3
4
1
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2005
1. USA: 55%
2. NON-USA: 45%
0 10 20 30 40 50 60
THE UK, NET GAMING REVENUE 2002–2005
(US$million)
2005
2004
2003
97.6
66.1
42.9 42.9
2002 42.9
GEOGRAPHIC SEGMENTATION, NET 
GAMING REVENUE – NON-USA 2005
1. UK: 44%
2. EUROPE: 38%
3. AMERICAS: 10%
4. REST OF THE WORLD: 8%
2
0 40 80 120 160
GEOGRAPHIC SEGMENTATION, NET GAMING 
REVENUE 2003–2005 (US$million)
2005
2004
2003
■ USA ■ Europe ■ Rest of the World
101
54
27
12
9
148
103
64
62
45
22
13
13
1
2
3
4
1
GEOGRAPHIC SEGMENTATION, 
NET GAMING REVENUE 2005
1. USA: 55%
2. NON-USA: 45%
0 10 20 30 40 50 60
THE UK, NET GAMING REVENUE 2002–2005
(US$million)
2005
2004
2003
97.6
66.1
42.9 42.9
2002 42.9
GEOGRAPHIC SEGMENTATION, NET 
GAMING REVENUE – NON-USA 2005
1. UK: 44%
2. EUROPE: 38%
3. AMERICAS: 10%
4. REST OF THE WORLD: 8%
2
0 40 80 120 160
GEOGRAPHIC SEGMENTATION, NET GAMING 
REVENUE 2003–2005 (US$million)
2005
2004
2003
■ USA ■ Europe ■ Rest of the World
101
54
27
12
9
148
103
64
62
45
22
13
13
charges reaching US$65.2 million 
(2004: US$41.1 million), a 59% 
increase over 2004. This growth 
accelerated during the second half of 
the year with Net Gaming Revenue and 
Profit after tax, excluding share benefit 
charges increasing in comparison  
to the first half of the year by 19%  
and 66%, respectively.
Member Accounts
The Group further increased its 
member base in 2005. 5.3 million  
new registered member accounts were 
The rake from ring games plus 
net tournament fees for Poker 
grew rapidly during 2005 
achieving a rake in December 
2005 that was 108% higher 
than in December 2004.
recruited the majority of first-time 
depositors from outside the USA. 
Members from 177 countries played on 
888’s sites with 55% of Net Gaming 
Revenue derived from the USA, 20% 
from the UK, 17% from the rest of 
Europe and 8% from other countries. 
Whilst growth of Net Gaming Revenue 
in the USA market achieved 44% over 
2004 levels, the rest of the world far 
exceeded this growth rate at 64%.
Casino
Net Gaming Revenue for Casino 
increased by 16% to US$161.2 million 
(2004: US$138.6 million) and active 
Casino members increased by 48% to 
97,661. The Group’s quarterly Net 
Gaming Revenue per active member 
indicator tends to fluctuate over time 
as a result of various promotion and 
data mining activities. Some of these 
campaigns are targeted at dormant 
opened (2004: 4.7 million) of which 
1.8 million were real money member 
accounts compared to 2004 at 
1.2 million. As at 31 December 2005 
the Group had 23.2 million registered 
member accounts (2004: 18 million) 
including 5.5 million real money 
member accounts (2004: 3.7 million).
During the final quarter of the year 
the Group recorded 330,962 active 
members representing a 75% increase 
over the same period in 2004. An 
active member is a member who  
has made a game-related balance 
movement in a real money account.
Geographic Diversification
The Group continued its geographic 
diversification in 2005 and further 
diluted concentration of Net Gaming 
Revenue from the USA to 55% (2004: 
58%). Further, in 2005 the Group 
17 888 Holdings Public Limited Company Annual Report & Accounts 2005 members or members at the later 
stages of their spend profile who 
tend to spend less than newly 
recruited members. Due to such 
promotion activities quarterly Net 
Gaming Revenue per active Casino 
member in the final quarter of 2005 
was US$419.
2.9 million new registered Casino 
member accounts were opened 
(2004: 3.2 million) of which 0.9 
million were real money member 
accounts compared to 2004 at  
0.7 million. As at 31 December 
2005 the Group had 18.9 million 
registered Casino member accounts 
(2004: 16 million) including 4.1 
million real money member Casino 
accounts (2004: 3.2 million).
Poker
Net Gaming Revenue for Poker rose 
dramatically by 179% to US$109.8 
million (2004: US$39.3 million). 
Active Poker members increased by 
89% to 233,301. In the final quarter 
of 2005 quarterly Net Gaming 
Revenue per active member was 
US$156.
2.3 million new registered Poker 
member accounts were opened 
(2004: 1.5 million) of which 0.9 
million were real money member 
accounts compared to 0.5 million in 
2004. As at 31 December 2005 
the Group had 4.3 million 
registered Poker member accounts 
(2004: 2.0 million) including 1.5 
million real money Poker member 
accounts (2004: 0.6 million).
The rake from ring games plus net 
tournament fees for Poker grew 
rapidly during 2005 achieving a rake 
in December 2005 that was 108% 
higher than in December 2004.
expenses
Operating Expenses
Operating expenses for 2005 were 
US$73.0 million representing 27% of 
Net Gaming Revenue, a reduction 
compared to 2004 (28%).
Research and Development
An increase of 65% in research and 
development expenditure in 2005 
from US$6.9 million to US$11.3 
million further demonstrates the 
Group’s continued commitment to 
invest in technology. This continues 
to enhance the offering of innovative 
gaming products to members.
Selling and Marketing
During the year the Group continued 
its long term strategy of investment 
in its global brand, 888, which is 
not language dependent, by utilising 
a wide variety of marketing channels 
to attract new members to its web 
sites. These include online media, 
affiliates and offline campaigns, as 
well as other innovative promotion 
and marketing activities. Selling and 
Marketing costs were US$100.0 
million (2004: US$64.5 million) 
whilst cost per acquisition, 
excluding members recruited by 
affiliates on a revenue share basis, 
remained competitive in 2005 at 
US$183 (2004: US$192). 
Administration
Administrative costs, excluding share 
benefit charges, were US$20.1 
million (2004: US$13.6 million) 
representing a slight reduction to 7% 
of Net Gaming Revenue (2004: 8%).
Financial Review
18 Investment in Human Capital
As at year end the Group had 886 
employees (2004: 689) at the 
following locations: Gibraltar – 391; 
Israel – 369; Antigua – 115; and 
London – 11. As part of its strategic 
investment in human capital, at the 
time of flotation of the Company on  
the London Stock Exchange, eligible 
management and employees received 
share awards (including share options) 
under the 888 All-Employee Share 
Plan. In addition, the Principal 
Shareholder Trusts made a one-time 
grant of immediately vested shares  
to management and employees, 
details of which are set out in the 
Remuneration Report on page 31.  
The grants had no cash impact on  
the Group, but under the applicable 
accounting standard (IFRS 2) this 
results in a charge in respect of share 
benefit against income calculated  
on a phased basis as set out in the 
accounting policies on page 42. These 
two grants resulted in a charge to the 
Consolidated Income Statement of 
US$2.1 million and US$15.1 million, 
respectively. Within the 2005 Annual 
Report and Accounts these are 
collectively referred to as the share 
benefit charges.
Tax and Profit
Operating Profit before share benefit 
charges for the year was 56% higher  
at US$66.7 million (2004: US$42.8 
million) with Operating Profit margin 
(before share benefit charges) having 
increased to 25% (2004: 24%). In 2005 
the Group continued to benefit from a 
low effective tax rate as a result of  
its exempt status in both Gibraltar  
and Antigua, and a transfer pricing 
agreement with the tax authorities in 
Israel. As a result the tax charge in 
2005 was unchanged on the prior year 
at approximately US$2 million. Profit 
after tax excluding share benefit 
charges was 59% higher at US$65.2 
million (2004: US$41.1 million).
earnings per share
Basic earnings per share excluding 
share benefit charges was 19.3¢ being 
a 58% increase over 2004. Diluted 
earnings per share excluding share 
benefit charges was 19.3¢ being a 
58% increase over 2004. Basic 
earnings per share was 14.2¢.
dividends
During the year dividends paid totalled 
US$63.1 million (2004: US$26.1 
million). The Group has adopted a 
dividend policy whereby it intends to 
pay dividends to holders of Ordinary 
Shares and Depositary Interests 
representing 50% of annual profits in 
aggregate. Approximately one third of 
the amount for the year will be declared 
as an interim dividend. The first 
dividend is expected to be declared in 
relation to the results of the Group for 
the first six months of 2006 on the 
basis as set out in the Prospectus.
Cash flows and balance sheet
In accordance with the Group’s 
practice, members are required to 
deposit funds into their accounts prior 
to participating in any real money 
activity. As a matter of policy the 
Group keeps sufficient liquid resources 
in US dollars to meet the possible 
withdrawal of all member balances  
at any time. The Group is highly cash 
generative with net cash generated 
from operating activities in 2005 of 
US$88.3 million (2004: US$51.4 
million) representing 132% of 
Operating Profit for the year before 
share benefit charges. Cash generated 
has been used mainly for dividends 
declared and partly paid prior to 
flotation of US$63.1 million (2004: 
US$26.1 million). Cash increased for 
the year by US$21.9 million (2004: 
US$10.7 million) resulting in a cash 
position at year end of US$62.2 
million (2004: US$40.3 million).  
The Group has no debt.
accounting standards
The Group’s gaming products are  
all denominated in US dollars and 
accordingly, the Group’s functional  
and reporting currency is the  
US dollar. The 2005 financial 
statements are prepared in 
accordance with International  
Financial Reporting Standards.
summary and outlook
2005 saw the transformation of 888 
into a public company characterised by 
strong growth, profitability and cash 
generation. The Group’s financial 
strength, continued investment in the 
brand and technological innovation 
comprise the robust foundation 
required to achieve our goals.
Aviad Kobrine
Chief Financial Officer
19 888 Holdings Public Limited Company Annual Report & Accounts 2005 Board of Directors
20 1 r ichard kilsby ♥ ♠
Non-executive Chairman
Richard Kilsby has been Chairman 
since March 2006 having previously 
been Deputy Chairman of the Company 
from August 2005. He is currently a 
director of Collins Stewart Tullett plc. 
Since 2001 he has held several board 
and management positions in various 
private and venture-capital funded 
companies. In 2004, he acted as 
independent monitor for the SEC and 
USA Department of Justice. From 1999 
to 2002, he was Chief Executive of 
Tradepoint and subsequently Executive 
Vice Chairman of virt-x plc. From 1995 
to 1998 he was an Executive Director 
of the London Stock Exchange prior  
to which he was a Managing Director 
for Bankers Trust from 1992 to 1995. 
He was also Vice Chairman of 
Charterhouse Bank from 1988 to 1992 
and a partner of Pricewaterhouse from 
1984 to 1988. Age 54.
2 John anderson ♠
Chief Executive Officer
John Anderson has been the Chief 
Executive Officer of the Company since 
September 2000. He is currently  
Non-executive Chairman of Burford 
Holdings plc and was Chief Executive 
Officer of Burford Holdings plc from 
1996 to 2000. He is also a board 
member of IGC and eCOGRA. He held 
a number of senior executive positions 
within Ladbrokes plc and from 1990  
to 1996 he served as an Executive 
Director. Age 57.
3 aviad kobrine
Chief Financial Officer
Aviad Kobrine has been Chief Financial 
Officer of the Company since June 
2005 and was appointed to the Board 
in August 2005. From October 2004 
he was a consultant to 888. 
Previously, he was a banker with the 
Media Telecoms Investment Banking 
Group of Lehman Brothers and prior  
to that, he was a senior associate  
with Slaughter and May. He holds a 
Masters in Finance from the London 
Business School (Distinction), a BA in 
Economics and an LLB from Tel Aviv 
University. Age 42.
4 shay ben-yitzhak
Chief Technical Officer
Shay Ben-Yitzhak is one of 888’s 
founders and has been the Chief 
Technical Officer of the Company and 
in charge of research and development 
since the establishment of its research 
and development centre in Tel Aviv in 
1998. Previously he was a software 
engineer for Tower Semi Conductor 
Limited and CIBAM Technologies 
Limited. He holds a BSc in computer 
science from Technion – the Israel 
Institute of Technology. Age 37.
5 brian mattingley ♦ ♥ ♣
Deputy Chairman and Senior 
Independent Non-executive Director
Brian Mattingley has been Deputy 
Chairman since March 2006 having 
been appointed to the Board in August 
2005. He is currently Non-executive 
Chairman of the Academy Music Group 
and was previously Chief Executive of 
Gala Regional Developments Limited 
until 2005. From 1997 to 2003 he was 
Group Finance and Strategy Director of 
Gala Group Plc, prior to which he was 
Chief Executive of Ritz Bingo Limited. 
He has held senior executive positions 
within Kingfisher Plc and Dee 
Corporation Plc. Age 54.
6 michael Constantine ♦ ♥ ♣ ♠
Independent Non-executive Director
Michael Constantine was appointed  
in August 2005. He is a chartered 
accountant and a member of the 
Compliance Institute. From 1996 to 
1998 he was Deputy Superintendent of 
the Turks and Caicos Islands Financial 
Services Commission and in 1995 he 
was head of the Financial Supervision 
Unit of the Mauritius Offshore Business 
Activities Authority. From 1991 to 1995 
he was an Inspector at the Gibraltar 
Financial Services Commission, latterly 
Acting Commissioner. Prior to this he 
was a Partner of Spain Brothers & 
Company and served in the Royal Naval 
Reserve reaching the rank of 
Commander. Age 67.
7 amos Pickel ♦ ♥ ♣ ♠
Independent Non-executive Director
Amos Pickel was appointed in March 
2006. He is currently Chief Executive 
Officer and member of the Board  
of Directors of Red Sea Hotels Ltd. 
Formerly a Non-executive Director  
of Gresham Hotel Group Plc, he is a 
solicitor holding a Masters in Law from 
New York University and a BA in Law 
from Tel Aviv University. Age 39.
Committee Memberships
♦ Audit
♥ Nomination
♣ Remuneration
♠ Regulatory and Compliance
21 888 Holdings Public Limited Company Annual Report & Accounts 2005 As a pioneer in the online gaming industry 888 has sought 
to take the lead in setting the industry standards for 
self‑regulation and is fully committed to responsible gaming.
Gaming is a form of entertainment enjoyed by many  
people and it is 888’s aim to provide members with a 
comprehensive selection of gaming activities in a secure, 
trustworthy environment.
Self-Regulation
888 was a founding member of eCOGRA (e‑ Commerce Online 
Gaming Regulation and Assurance), an independent body 
that has developed a series of self‑ regulatory guidelines. 
888’s Casinos have adopted the recommendations and 
procedures laid down by eCOGRA. Compliance with these 
recommendations and procedures is subject to independent 
review. This review bolsters and supplements the internal 
control procedures in place at 888 in order to ensure that 
objectives of player protection, fair gaming and responsible 
conduct are met. 888 was awarded a seal of approval by 
eCOGRA for its casinos following a due diligence audit 
process by an independent committee of the board 
of eCOGRA.
888 is a founding member of the Gibraltar Betting and 
Gaming Association which has been set up to represent  
the gaming industry in Gibraltar.
888 is also an active participant in the Interactive Gaming 
Council (IGC) – an online gaming trade association, which 
was founded to establish, promote and enforce a uniform 
code of conduct across the entire online gaming industry – 
and has adopted the IGC’s Code of Conduct.
Problem Gaming
To promote responsible gaming 888 has a number of 
technological and policy measures in place to identify 
irregular playing patterns. Systems exist to identify 
behaviour patterns that may indicate problem gaming, 
including the following:
all our sites have clear and visible links to assist  
with gaming problems (Gamblers Anonymous and 
Helping Hand);
there are progressive limits on deposits, as well as  
table limits, that are in place to prevent members from 
spending large amounts of money over a short period 
of time;
■
■
our member support staff proactively monitor members’ 
activity, such as total spend, time, length and frequency 
of playing sessions, in order to identify potential 
problem gamblers;
in cases where members are confirmed as having a 
gaming problem or financial difficulties their accounts  
are immediately blocked and can only be opened again 
after a suspension period and after ascertaining that  
the financial or other problems have been resolved; and
our member support team is trained in all the above 
issues to be able to identify and deal with such problems 
at the earliest practicable stage.
Underage Gaming
888 takes underage gaming extremely seriously, acting 
quickly to close an account and return monies whenever a 
complaint or suspicion is raised regarding a member’s age.
888 is involved in continuous dialogue with payment 
processors, the industry and industry regulatory bodies, 
such as eCOGRA, to establish and implement the best 
possible solutions to prevent underage gaming.
In the UK, where some debit cards are issued to minors, 
we have developed specific systems to deal with underage 
gaming. 888 has created its own tools for identifying 
possible underage gaming by SOLO, Switch and Visa 
Electron card holders. 
Additionally, 888 has recently installed the state‑ of‑ the‑ art 
URU (You Are You) system, a new e‑ authentication scheme 
for age and identity verification launched by British Telecom 
and a data management software provider, GB Group. URU 
does not require members to create an online identity by 
providing personal details to the service, which then 
authenticates them but instead uses existing information  
to verify an individual’s identity. The system can confirm an 
individual’s identity in seconds by checking a number of 
public and private databases. 
888 strives to take the lead in evolving best practice, 
developing new systems and keeping its policies and 
procedures under continuous review.
■
■
■
Responsible Gaming
22 Regulatory and Compliance Review
The regulatory framework of online gaming in different 
countries around the world remains as dynamic and rapidly 
evolving as ever. While some jurisdictions have moved to 
curtail the activities of online gaming sites, others are 
currently contemplating liberalisation and regulation of the 
industry. The Board note that there are significant risks, 
unique to the online gaming industry, including in the USA 
where members of 888 generated 55% of our Net Gaming 
Revenue in 2005. The Board remains committed to 
monitoring closely and addressing regulatory changes as 
they occur, and to fostering, so far as possible, the trend 
towards liberalisation and regulation of online gaming 
throughout the world.
888 is licensed and regulated in Gibraltar. In December 
2005, the Government of Gibraltar enacted a new Gambling 
Ordinance. The Ordinance introduces a tailor‑ made regime 
for the regulation of remote gaming. 888 has actively 
supported the introduction of such legislation and the Board 
looks forward to full implementation in the coming months, 
which will include the appointment of a new regulator.
In the USA, several members of Congress have proposed 
various Bills aimed at prohibiting online gaming in the USA 
or financial transactions with online gaming sites. These 
Bills are currently in their preliminary legislative stages and 
the Board will continue to monitor their progress closely. 
In Italy, authorities have recently ordered local Internet 
Service Providers to prohibit access by Italian users to 
foreign gaming sites. The Board is carefully monitoring this 
development and, together with others in the online gaming 
industry, is weighing up its potential responses, especially 
in light of the fact that this legislation is perceived to be in 
contravention of European law.
In Israel, law enforcement authorities have raided the 
offices of several Internet portals and arrested several 
individuals on the suspicion that they had advertised online 
gaming sites in Israel, in contravention of the Israeli Penal 
Law. 888 does not allow Israelis to wager on its websites 
and has systems to prevent them doing so. 
However, 888 has been advised that since it does not 
facilitate, offer or provide gaming activities prohibited under 
the Penal Law to Israeli residents, the Penal Law will not be 
applicable to 888 since no offence is committed wholly or in 
part within Israeli territory.
The Board continues to monitor these developments closely 
and is alert to changes as they may occur in areas where 
the Group operates.
888 Holdings Public Limited Company Annual Report & Accounts 2005 23 Corporate Governance
888 is listed on the London Stock Exchange, but it is not 
technically subject to the UK Combined Code on Corporate 
Governance issued in July 2003 (the Code) because it is  
a Gibraltar registered company. The Directors support the 
high standards of Corporate Governance set out in the  
Code and will apply the principles as far as practicable for  
a company based outside the UK. This statement sets out 
how the Board has applied the principles set out in Section 
1 of the Code, from the date of the Company’s flotation on 
4 October 2005.
The Board
The Directors consider it essential that the Company should 
be both led and controlled by an effective Board.
Composition
The Board consists of three Independent Non‑ executive 
Directors, a Non‑ executive Chairman, and three Executive 
Directors, comprising Chief Executive Officer, Chief Financial 
Officer and Chief Technical Officer. The biographical details 
of all the Directors are given on page 21.
Strategic approach
The Board focuses upon the Group’s long‑ term objectives, 
strategic and policy issues and considers management of 
key risks facing the Group. The Board is responsible for 
acquisitions and divestments, major capital expenditure 
projects and considering Group budgets and dividend policy. 
The Board also determines key appointments. The Board 
receives regular updates on shareholders’ views and more 
detailed briefings are to be given to the Board immediately 
following the publication of the Company’s annual and 
interim results. 
The Board has established a calendar of business within 
which it is currently working, post flotation, to structure the 
conduct of its activities going forward. This provides for the 
financial calendar, strategic planning, annual budgets and 
performance self‑ assessments, as well as the conduct of 
standing business. The calendar is intended to form the 
basis for effective integration of business activities as 
between the Board and its principal Committees (see pages 
25 and 26), which individually consider their own operating 
frameworks against the Board’s business programme.
The Board plans to meet eight times a year. In the period 
from flotation to 31 December 2005, the Board met twice 
and all of the Directors attended each of the Board meetings. 
Ad‑hoc meetings can be convened to attend to any matters 
requiring Board consideration in between regular meetings.
The Chairman has responsibility for ensuring that agendas 
for Board meetings are set in advance. Board papers  
are, where practicable, issued to Directors sufficiently  
in advance of meetings to facilitate both informed debate 
and timely decision.
Non-executive review and performance appraisal
The Chairman plans to hold meetings (at least one per year) 
with the Non‑ executive Directors without the Executive 
Directors being present. Led by the Senior Independent 
Director, the Non‑ executive Directors also plan to meet 
without the Chairman present at least once a year to 
appraise the performance of the Chairman. In the period 
from flotation to 31 December 2005, no such meetings 
were held. The Directors have wide ranging business 
experience, and no individual, or group of individuals, 
dominates the Board’s decision making.
The Board considers that Brian Mattingley, Michael 
Constantine and Amos Pickel satisfy the criteria of the Code 
to act as Independent Non‑ executive Directors. The Board  
is satisfied that, at flotation, the former Chairman met the 
independence criteria of the Code, as did Richard Kilsby  
upon his appointment as Chairman. The Chairman is not 
considered as independent for the purposes of assessing  
the balance of the Board pursuant to the Code.
Brian Mattingley was appointed Deputy Chairman and 
Senior Independent Director on 9 March 2006.
Reserved powers and delegation
A schedule of matters reserved to the Board has been 
adopted and its content is being kept under review as the 
business develops, to align it with operational needs and 
the Board’s preference to monitor and, where appropriate, 
approve matters of substance to the Group as a whole. 
Senior executives have given written undertakings to ensure 
compliance within their business operations with the 
Board’s formal schedule of matters reserved for itself for 
decision or approval. Within these parameters, a framework 
of delegated authorities is being developed to ensure that 
management can exercise on an ongoing basis requisite 
authority for an effective business operation. 
Division of responsibilities
The responsibilities of the Chairman are clearly and formally 
defined, with the Chairman being responsible for the 
effective operation of the Board as a whole and supporting 
key external relationships. 
The Executive Directors are responsible for the day‑ to‑ day 
management of the business. The Chief Executive Officer 
chairs an Operations Forum, which is a working group 
comprising key senior executives. Its principal function is  
to act as a conduit for communication between different 
areas of the Group’s business and allow the interchange  
of ideas, as well as feedback, between the research and 
development, marketing and operational functions across 
the Group. Executive Directors meet individually and 
collectively with heads of functions and line management  
to coordinate business priorities.
24 Other issues
All Directors have access to the advice and services of  
the Company Secretary and the Company’s nominated 
advisers, who are responsible for ensuring that Board 
procedures are followed. Directors are able to seek 
independent professional advice, if required, at the 
Company’s expense provided that they have first notified 
their intention to do so. The appointment or removal of the 
Company Secretary is a matter for the Board as a whole.
The Board accepts that there should be a formal, rigorous 
and transparent procedure for the induction of new 
Directors, which is to be formulated with the guidance  
of the Nominations Committee.
The opportunity to hold office as Non‑ executive Directors of 
other companies enables Directors of 888 to broaden their 
experience and knowledge, which will benefit the Company. 
Executive Directors may be allowed to accept Non‑ executive 
appointments with the Board’s prior permission, so long as 
these are not likely to lead to conflicts of interest. Directors 
may be required to account for fees received from such 
other companies.
The Company has arranged insurance cover in respect  
of any legal action against its Directors. To the extent 
permitted by Gibraltar law, the Company also indemnifies 
the Directors. Neither the insurance nor the indemnity 
provides cover where a Director has acted fraudulently 
or dishonestly.
Re-election of Directors
All Directors are subject to re‑ appointment by shareholders 
at the first Annual General Meeting after their appointment, 
and thereafter, in accordance with the Articles of 
Association of the Company, at intervals of no more than 
three years. Richard Kilsby (Non‑ executive Chairman),  
Brian Mattingley, Michael Constantine and Amos Pickel  
(the Independent Non‑ executive Directors) are appointed  
for an initial period of three years, following re‑ appointment,  
if approved, by shareholders at the first Annual General 
Meeting after their appointment. 
Audit Committee
The Audit Committee comprises three Independent  
Non‑ executive Directors: Brian Mattingley (Chair), Michael 
Constantine and Amos Pickel. During 2005, Richard Kilsby 
was Chairman of the Audit Committee until his appointment 
as Chairman of the Company in March 2006. The Board  
is satisfied that Brian Mattingley has sufficient recent and 
relevant financial experience to chair the Audit Committee. 
Normally, by invitation, the Chief Financial Officer and 
Internal Auditor attend Committee meetings, as can 
representatives of the external Auditors. In 2005, the 
Committee met once and all of the Committee members 
attended the meeting.
The Audit Committee’s terms of reference are available on 
request to the Company Secretary and are included on the 
Company’s website, www.888holdingsplc.com.
In summary, the Committee assists the Board in 
discharging its responsibilities with regard to financial 
reporting, external and internal audits and controls, 
including reviewing 888’s annual financial statements, 
considering the scope of annual audit and the extent  
of non‑audit work undertaken by external Auditors, 
approving 888’s internal audit programme, advising  
on the appointment of external Auditors and reviewing  
the effectiveness of internal control systems.
Following a review in 2005 by the Audit Committee,  
the Board adopted on 31 January 2006 a Group‑ wide 
framework enabling employees to raise any concerns under 
a formalised “Whistleblowing” policy, in confidence, and 
with the assurance of employment protection under the 
policy. The Audit Committee is responsible for monitoring 
and reviewing the operation of this policy.
Nominations Committee
The Nominations Committee assists the Board in 
discharging its responsibilities relating to the composition  
of the Board. The Nominations Committee is responsible  
for reviewing, from time to time, the structure of the Board, 
determining succession plans for the Chairman and Chief 
Executive Officer, and identifying and recommending 
suitable candidates for appointment as Directors. The 
Nominations Committee’s terms of reference are available 
on request to the Company Secretary and are included on 
the Company’s website, www.888holdingsplc.com.
The Nominations Committee comprises three Independent 
Non‑ executive Directors, Michael Constantine (Chair), Brian 
Mattingley, Amos Pickel and Richard Kilsby, Chairman.  
The Nominations Committee did not meet during 2005  
and at this early stage from flotation, has not undertaken  
a formal evaluation of the balance of skills, knowledge and 
experience on the Board. This extends to director training, 
induction and succession planning.
The Nominations Committee will, in 2006, be considering  
a structured framework for Board, Committee and Director 
evaluations and other matters within a programme of 
activities designed to address its assigned terms 
of reference.
888 Holdings Public Limited Company Annual Report & Accounts 2005 25 Corporate Governance
Remuneration Committee
The Company’s Remuneration Committee was formed at 
flotation and comprises solely Independent Non‑ executive 
Directors. Brian Mattingley chairs the Committee and its  
other members are Michael Constantine and Amos Pickel. 
Richard Kilsby was a member of the Committee up until his 
appointment as Chairman of the Company. The Remuneration 
Committee met twice during 2005. Both meetings of the 
Committee were attended by all of the Committee members 
during the period. It anticipates meeting not less than twice  
in 2006 to address its responsibilities under its formal terms 
of reference, through the creation of a considered schedule  
of business. 
The Committee assists the Board in determining its 
responsibilities in relation to remuneration, including  
making recommendations to the Board on 888’s policy  
on executive remuneration, determining the individual 
remuneration and benefits of each of the Executive 
Directors, and recommending and monitoring the 
remuneration of senior management below Board level. 
The Remuneration Report, which outlines the Committee’s 
work and details of Directors’ remuneration, is on  
pages 29 to 34. The Remuneration Committee’s terms  
of reference are available on request to the Company 
Secretary and are included on the Company’s website, 
www.888holdingsplc.com.
Regulatory and Compliance Committee
Although not specifically recommended by the Combined 
Code, the Board has established a Regulatory and 
Compliance Committee to assist 888 to conduct its 
operations in accordance with the highest ethical 
standards. In particular, the Regulatory and Compliance 
Committee assists the Board in relation to compliance  
with all current and prospective applicable regulatory  
and legal requirements, as well as the development and 
implementation of 888’s internal codes and policies.
The Committee comprises Michael Constantine (Chair  
since March 2006), Richard Kilsby, Amos Pickel and John 
Anderson. The Committee did not meet during 2005 but has 
done so since the year end to plan a calendar of activities 
and determine interaction with the Audit Committee.
The Regulatory and Compliance Committee’s terms of 
reference are available on request from the Company 
Secretary and are included on the Company’s website, 
www.888holdingsplc.com.
Risk Management and Internal Control
The Directors acknowledge that they are responsible for  
the Company’s system of internal control, for setting policy 
on internal control, and for reviewing the effectiveness  
of internal control. It is management’s role to implement  
Board policies on risk and control, including reporting. The 
system of internal control is designed to manage rather than 
eliminate the risk of failure to achieve business objectives 
and can only provide reasonable, and not absolute, 
assurance against material misstatement or loss.
The Regulatory and Compliance Committee has 
responsibility for assisting in the implementation of  
an effective framework of policies and procedures,  
Group‑ wide. 
The Board has delegated responsibility to the Audit 
Committee to review, ongoing, the appropriateness  
and adequacy of systems of internal control and make 
recommendations to the Board. The Company has an 
Internal Auditor who reports to the Audit Committee,  
whose audit program for 2006 has been reviewed by  
the Audit Committee. 
888’s risk management team, based in Gibraltar, has 
developed stringent risk management and fraud control 
procedures. The team makes use of external and internal 
systems to manage the risks faced by 888’s operational 
systems. Detailed procedures exist throughout the 
Company’s operations and compliance is monitored  
by operational management and the Internal Auditor.
An extensive risk review was conducted preparatory to  
the flotation in October 2005; Part II of the Prospectus 
described risk factors faced by the Group. The Directors 
have reviewed the effectiveness of the Group’s systems  
of internal control, taking account of key risks identified 
during the flotation process. The review considered 
individual risk control responsibilities, reporting lines and 
qualitative assessments of residual risks. The results  
have been discussed by the Audit Committee, which has 
advised the Board on the ongoing development of corporate 
controls. The Audit Committee is guiding internal audit on 
the establishment of a framework for the monitoring of 
management processes operated to develop, integrate  
and embed effective Group‑ wide controls.
Relations with Shareholders and  
Key Financial Audiences
The Company maintains an active and regular dialogue  
with principal and institutional shareholders and sell‑ side 
analysts through a planned programme of investor relations 
and financial PR activity. The outcome of these meetings  
is reported to the whole Board to ensure it keeps in touch 
with shareholder and City opinion. The programme includes 
formal presentations of full year and interim results.
26 Brian Mattingley, the Senior Independent Director, is 
available to shareholders to address any issues that normal 
contact with the Chairman, Chief Executive Officer and Chief 
Financial Officer has failed to resolve or is inappropriate.
All shareholders are welcome to attend the 2006 Annual 
General Meeting and private investors are encouraged to 
take advantage of the opportunity given to ask questions. 
The Chairmen (or nominated members) of the Audit, 
Remuneration, Nominations and Regulatory and Compliance 
Committees will attend the meeting and be available to 
answer questions.
Compliance with the Code Provisions
As 888 Holdings Public Limited Company is registered in 
Gibraltar, it is subject to compliance with Gibraltar statutory 
requirements and is not technically bound by the UK 
Combined Code. The main legislation relevant to companies 
in Gibraltar is the Gibraltar Companies Ordinance, which is 
based on the UK Companies Act 1929.
The Board of Directors confirm that, since flotation, the 
Company has complied with the majority of the provisions 
set out in Section 1 of the Combined Code. The exception  
is the performance evaluation of the Board which has not 
been undertaken given that there has been insufficient 
time, since flotation, for it to be meaningful. 
Going Concern
After reviewing the Group’s budget for 2006 and its medium 
term plans, the Directors are confident that the Company 
and the Group have adequate financial resources to 
continue in operational existence for the foreseeable future. 
They have therefore continued to adopt the going concern 
basis in preparing its financial statements.
Corporate and Social Responsibility Statement
The Group’s Chief Executive Officer is the Director 
responsible for monitoring corporate and social 
responsibility within 888. The Board receives periodic 
reports on the Group’s activities in this area from the  
Chief Executive Officer.
Members
The Board is eager to promote online gaming as a 
responsible, self‑ regulating industry which is prepared  
to submit itself to regulatory licensing and believe this is a 
key factor in attracting more participation in online gaming 
activities. 888 has sought to take the lead in setting the 
industry standards and a separate report on Responsible 
Gaming is set out on page 22.
Other aspects which 888 promotes include:
providing the highest levels of service and support  
to the Group’s members;
protecting member privacy and the proper handling  
and use of data in accordance with applicable law;
ongoing training, development and motivation of 
employees to retain the widest possible range of 
talented staff; and
provision of a safe and healthy workplace in accordance 
with relevant legislation.
Service and Support to Members
888 is committed to providing the highest levels of service 
and support to its members. There is a dedicated team  
of in‑ house trained member support representatives  
for each of the Group’s brands providing support 24/7  
in up to 11 different languages. A separate, highly skilled 
team is dedicated to VIP members. Member support 
representatives are strictly monitored and benefit from 
ongoing refresher training courses. 888 has retained 
leading call centre experts to further enhance the quality  
of its member support.
Protecting Member Privacy
All 888’s online products maintain a privacy policy which  
is clearly accessible from each of the Group’s websites, 
explaining how the Group deals with members’ personal 
data. All processing of members’ personal data is 
undertaken in‑ house and where personal data is transferred 
between Group companies, appropriate intra‑ Group 
processing contracts are put in place. 
The EU Directive on Data Protection has recently been 
enacted in Gibraltar but has not yet been brought into force. 
888 has for some time carried out the processing of its 
members’ personal data accordingly, in accordance with  
the EU Directive.
Employees
The Group respects individuals’ human rights and treats 
individuals with dignity and respect. The Board supports 
high standards of employment practice, including providing 
equal opportunities in the workplace in terms of selection, 
promotion, training and development and a safe 
environment in which to work. The Group has reviewed  
its compliance with health and safety legislation in its 
various locations.
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888 Holdings Public Limited Company Annual Report & Accounts 2005 27 Training and Development
Training and development is provided to individuals 
throughout their career to enable employees to maintain 
and improve standards of performance, deal effectively  
with any changes to the work environment and to develop 
their abilities and realise their potential. Selection for  
further training and development is based upon individual 
and business needs. 2006 will see the launch of the  
888 Certification Scheme, an initiative that develops  
all employees, regardless of level, covering a range of 
disciplines unique to our brand.
Equal Opportunities
888 is an equal opportunity employer. No employee or 
potential employee will therefore receive less favourable 
treatment due to their race, creed, colour, nationality, ethnic 
origin, religion, political or other opinion, affiliation, gender, 
sexual orientation, marital status, family connections, 
membership or non‑ membership of a trade union 
or disability.
Corporate Governance
Communication
The Board values the involvement of all the Group’s 
employees and is committed to communicating effectively 
with them through formal and informal meetings and 
internal publications, including in‑ house newsletters  
and employee reports. 
Community 
Sponsorship
888 is a sizeable employer with a visible presence in 
Gibraltar and enjoys a good relationship with the local 
community. During 2005 the Group has reinforced this 
relationship by making contributions to a number of local 
causes, primarily educational. 
Charities
In 2005 the Group made regular donations to Free the 
Children, EarthAction and NetAid. The Group also made  
a donation to the Disasters Emergency Committee 
Tsunami Appeal.
28 Remuneration Report
This is the first Remuneration Report of the Board as a  
UK Listed Public Company. The Company is not required  
to comply with the directors Remuneration Report 
requirements in Schedule 7A to the UK Companies Act 
1985, but has chosen to prepare this Remuneration  
Report on the basis of those requirements.
The report sets out the structure and details of the 
remuneration of the Directors for the year ended 
31 December 2005. It also describes the Board’s  
approach to the Principles of Good Governance relating  
to Directors’ remuneration.
A resolution to approve the Remuneration Report will be 
proposed, annually, to shareholders for approval. This first 
Remuneration Report will be put to shareholder vote at the 
2006 Annual General Meeting.
Remuneration Committee
The Remuneration Committee consists solely of independent 
Non‑ executive Directors: Brian Mattingley (Chair), Michael 
Constantine and Amos Pickel. Since flotation up to his 
appointment as Chairman of the Company, Richard Kilsby 
was also a member of the Committee. Details of attendances 
at Committee meetings are contained in the statement on 
Corporate Governance on page 26. The Remuneration 
Committee has formal terms of reference (which are available 
on request in writing to the Company Secretary and on the 
Company’s website, www.888holdingsplc.com).
The Board has overall responsibility for determining the 
framework of executive remuneration and its cost. It is 
required to take account of any recommendation made by the 
Remuneration Committee in determining the remuneration, 
benefits and employment packages of the Executive Directors 
and senior management and the fees of the Chairman.
Independent Advice
The Board intends that executive remuneration policies be 
both formal and transparent. It further acknowledges the 
importance of taking into consideration independent advice 
in setting remuneration policies and benefit levels.
In the preparatory period for the Company’s flotation on  
the London Stock Exchange, the Board was advised by  
BDO Stoy Hayward LLP (which also acted as reporting 
Accountants) on its initial policies, Freshfields Bruckhaus 
Deringer as English legal counsel and Herzog, Fox & 
Neeman as Israeli counsel. Since the end of the financial 
year, a process has been commenced to identify an 
independent executive remuneration adviser to advise the 
Remuneration Committee. The selected adviser will be 
familiar with benefit structures operated within comparable 
technology businesses, with a global spread and the  
leisure sector.
Remuneration Policy
Executive Directors
Remuneration packages must be sufficient to attract, retain 
and motivate Directors of the calibre appropriate to a global 
business in a competitive environment.
The current remuneration packages of the Executive Directors 
were implemented preparatory to the October 2005 flotation. 
Each Executive Director signed a new service agreement on 
14 September 2005. The components of the remuneration 
structure are set out on page 30.
At least half of the total potential remuneration of the Chief 
Executive Officer and Chief Financial Officer is represented  
by a variable element, dependent on the performance of the 
Company. The Remuneration Committee considers that these 
represent achievable and motivational levels of personal 
rewards commensurate with stipulated levels of corporate 
performance. The Chief Technical Officer receives only a base 
salary and no additional performance related remuneration. 
His significant share interest in 888 is considered to provide 
substantive linkage to corporate performance.
The Remuneration Committee is mandated by the Board  
to satisfy itself that the level of the Directors’ and senior 
management’s remuneration is appropriate having regard  
to pay and conditions throughout the rest of the Group. It 
will further satisfy itself that such remuneration aligns with 
the risks and rewards to shareholders. In this context the 
Remuneration Committee will regularly review individual and 
corporate performance targets.
The 888 Long Term Incentive Plan (LTIP) was approved prior 
to flotation but no awards have been granted under the LTIP. 
Performance criteria are to be set in relation to the planned 
operation of the LTIP (see pages 30 to 31), and it is 
intended that they will be suitably stretching and linked  
to the Company’s performance.
In 2006, after taking independent advice and with due 
regard to existing contractual arrangements and relevant 
statements made at flotation, the Remuneration Committee 
will consider, and thereafter keep under review, the level 
and composition of executive remuneration within 888.  
The Committee acknowledges the importance of balancing 
fixed and performance‑ related remuneration elements,  
such that appropriate targets and aspirational levels for 
executives align with the corporate objectives set and the 
successful operation of business strategies. The review will 
take into account the balance between fixed and variable 
remuneration, and short and long term components of 
remuneration, together with the justification for any salaries 
exceeding a comparator group median.
Non-executive Directors
The Chairman and the Non‑ executive Directors receive fees 
only, and are not eligible to participate in any bonus plan, 
888 Holdings Public Limited Company Annual Report & Accounts 2005 29 pension plan, share plan, or long‑ term incentive plan  
of the Company. The Chairman and the Executive  
Directors determine the fees paid to the Non‑ executive 
Directors. The Chairman’s fee is determined by the 
Remuneration Committee.
Fees paid to the Non‑ executive Directors were set by 
reference to an assessment of the time commitment and 
responsibility associated with each role. Levels take account 
of additional demands placed upon individual Non‑ executive 
Directors by virtue of their holding particular offices, such  
as Committee Chairman and/or Deputy Chairman. The  
fees paid to each Non‑ executive Director during 2005  
are disclosed in the Directors’ remuneration summary  
on page 32.
Remuneration Structure
Base Salary and Benefits
Base salaries are subject to annual review with the first 
review following flotation taking place in June 2006 for  
Aviad Kobrine and Shay Ben‑ Yitzhak. In considering reviews 
in the future, it is anticipated that the Remuneration 
Committee will take into account key factors, including 
individual performance appraisals, market competitive levels, 
geographic issues and the salary levels of other higher paid 
executives across the organisation as a whole.
To assist the Remuneration Committee in their judgements, 
benchmark comparator group information (comprising the 
Company’s principal competitors and other companies  
of similar size and complexity in the FTSE 250) is  
to be commissioned for compilation from independent 
remuneration consultants. The positioning of 888’s executive 
salary levels within the benchmark group distribution will 
then be submitted to the Remuneration Committee for 
consideration with independent advice.
Benefits provided to senior executives include a car 
allowance, and health, disability and life insurance.
Annual Cash Bonus
John Anderson and Aviad Kobrine are each entitled to  
an annual cash bonus subject to the achievement of a 
predetermined level of net earnings by their respective 
employers (in the case of John Anderson, the Company and 
in the case of Aviad Kobrine, the Company and Cassava 
Enterprises (Gibraltar) Limited). The maximum annual cash 
bonus entitlement for John Anderson is 200% of basic salary 
and for Aviad Kobrine, 100% of basic salary. Shay Ben‑Yitzhak 
is not entitled to an annual cash bonus.
Pensions
John Anderson and Aviad Kobrine are each entitled to an 
annual contribution to their personal pension schemes  
of 15% of their respective basic salaries (in the case of  
Aviad Kobrine, 15% of his basic salary under both service 
agreements). Shay Ben‑ Yitzhak is entitled to an annual 
contribution to his personal pension scheme and managers’ 
insurance scheme of 13.33% of his basic salary.
Long Term Incentives
On 30 August 2005 the Company adopted two employee 
share incentive plans which took effect from flotation: (i) the 
888 All‑ Employee Share Plan, and (ii) the 888 Long Term 
Incentive Plan. On flotation, awards were granted under the 
888 All‑ Employee Share Plan. During 2005, no awards were 
granted under the 888 Long Term Incentive Plan and none 
have been made to date.
888 All-Employee Share Plan
All employees and Executive Directors of the Group who  
are not within six months of their normal retirement age are 
eligible to participate in the 888 All‑ Employee Share Plan at 
the discretion of the Remuneration Committee. At the 2006 
Annual General Meeting shareholder approval will be sought 
to extend the definition of eligible participants to include 
consultants of the Company or any of its subsidiaries.
Awards under the 888 All‑ Employee Share Plan can either be 
granted for no/nominal consideration (or with a nil exercise 
price) or at an exercise price that will normally not be less 
than the market value of an Ordinary Share at the time of 
grant. In countries where an award or option involving real 
shares is not appropriate or feasible for legal, regulatory or 
tax reasons, a phantom award may be used.
The maximum number of Ordinary Shares that an eligible 
employee may acquire pursuant to share awards or options 
granted to him in any calendar year under the 888 All‑ Employee Share Plan may not have an aggregate market 
value, as measured at the date of grant, exceeding 200%  
of his annual base salary or such higher limits as the 
Remuneration Committee may determine is appropriate in 
any individual case. Awards vest in instalments over a fixed 
period of up to four years. The Remuneration Committee may 
determine that the vesting and release or exercise of share 
awards and options under the 888 All‑ Employee Share Plan 
is subject to performance conditions imposed at the time of 
grant. The initial grant of awards upon flotation under this 
scheme was not subject to performance conditions, other 
than the actual occurrence of the flotation.
888 Long Term Incentive Plan
All employees and Executive Directors of the Group who  
are not within six months of their normal retirement age are 
eligible to participate in the 888 Long Term Incentive Plan  
at the discretion of the Remuneration Committee.
Share incentives under the 888 Long Term Incentive Plan can 
be awarded either for no/nominal consideration (or with a nil 
exercise price) or granted as an option at an exercise price 
that will normally not be less than the market value of an 
Ordinary Share at the time of grant. In both cases, the share 
award or option vests subject to, and to the extent that, 
performance conditions determined at the time of grant  
are satisfied during the applicable performance period. 
Performance conditions are not capable of being retested, so 
that any proportion of a performance share award or option, 
which does not vest on the normal vesting date will lapse.
Remuneration Report
30 In countries where a share award or option involving real 
shares is not appropriate or feasible for legal, regulatory or 
tax reasons, a phantom award may be used. The maximum 
number of Ordinary Shares that an eligible employee may 
acquire pursuant to share awards or options granted to him 
in any calendar year under the 888 Long Term Incentive Plan 
may not have an aggregate market value, as measured at  
the date of grant, exceeding 200% of his annual base salary 
or such higher limits as the Remuneration Committee may 
determine is appropriate in any individual case.
No share award or option may be granted to an employee 
under the 888 Long Term Incentive Plan in any calendar  
year if he has previously been granted a share award  
or option under the 888 All‑ Employee Share Plan in the  
same calendar year. 
Subject to the satisfaction of applicable performance 
conditions, performance share awards and options will 
normally vest in equal tranches over a four‑ year vesting 
period, on each anniversary of the date of the grant or on 
such other period or such other basis as the Remuneration 
Committee may decide.
As at the date of this report, no awards have been granted 
pursuant to the 888 Long Term Incentive Plan. In the Prospectus 
published at flotation, the Remuneration Committee anticipated 
granting awards under the 888 Long Term Incentive Plan to 
members of the senior executive management team including 
the Executive Directors. The Remuneration Committee has yet 
to consider and determine how many shares will be subject to 
such awards or what performance conditions will apply to them. 
It is intended that they be suitably stretching and linked to the 
Company’s performance. 
Policy on Long Term Incentives
The Remuneration Committee will obtain and consider 
independent advice in setting policy on the grant of options 
and awards, the performance criteria to which options and 
awards are subject and the period over which options  
and awards will vest when operating the 888 All‑ Employee 
Share Plan and 888 Long Term Incentive Plan in future. The 
Remuneration Committee will also have regard to the total 
remuneration packages of all senior executives and Directors 
when determining the amount of share awards.
Scheme Limits
Awards and options granted under the 888 All‑ Employee 
Share Plan and the 888 Long Term Incentive Plan may be 
satisfied through the issue of new shares. In accordance with 
the Association of British Insurers Guidelines on Executive 
Remuneration, grants of options and awards are to be 
planned so as not to exceed 5% of the issued Ordinary Share 
capital in any rolling 10 year period for the 888 Long Term 
Incentive Plan, and 10% of the issued Ordinary Share capital 
in any rolling 10 year period for both the 888 All‑ Employee 
Share Plan and the 888 Long Term Incentive Plan. The 
Committee intends to have regard to appropriate annual flow‑ rates so as to ensure that these limits are not breached.
Employee Trusts
The Company has established two Trusts to further the 
interests of the Company, its subsidiaries and shareholders 
by providing share incentives to employees (including 
Executive Directors) of any Group company to enable the 
Group to attract, retain and motivate employees.
The 888 Holdings Public Limited Company Share Plan  
Trust was created pursuant to a Trust Deed dated 
14 September 2005 and operated in connection with share 
awards made to certain employees upon the 2005 flotation. 
The Trust currently holds no shares in the Company.
The 888 IPO Share Award Trust was created pursuant to  
a Trust Deed dated 14 September 2005 and operated in 
connection with the grant of share awards and nil cost 
options to employees of the Group upon the 2005 flotation. 
The Trust currently holds 211,432 Ordinary Shares in 
the Company.
Director Appointments – Service Contracts  
and Directors’ Fees
Executive Directors
In accordance with the Combined Code, each Executive 
Director’s service agreement is terminable on no more  
than 12 months written notice. Each Executive Director’s 
employment can be terminated by making a payment equal 
to the salary and pension contributions and the value of 
other contractual benefits due to the Executive Director  
in lieu of any unexpired notice period. John Anderson and 
Aviad Kobrine continue to be entitled to be paid a bonus 
during any unexpired part of the notice period even if the 
employment is terminated by making payment in lieu of 
notice. Awards granted under the 888 All‑ Employee Share 
Plan to John Anderson and Aviad Kobrine pursuant to their 
service agreements and conditional upon flotation (as 
described in the Prospectus) shall continue to vest during 
any unexpired part of the notice period and they shall be 
treated as a “good leaver” under the terms of the 888  
All‑ Employee Share Plan where their employment has been 
terminated by making a payment in lieu of notice. No other 
benefits upon termination of employment are payable. An 
Executive Director’s entitlement to share awards and share 
options under any share incentive plan on termination of 
employment will be governed by the terms of the relevant 
plan (and in the case of John Anderson and Aviad Kobrine  
by the relevant provisions of their service agreements).
Resignations
Peter Montegriffo and Eyal Shaked resigned from the Board  
in August 2005. Eyal Shaked did not have a service contract 
and Peter Montegriffo served under a Letter of Appointment 
for a fixed one year term subject to the Company’s articles  
of association and the Board resolving to re‑ appoint 
Mr Montegriffo for a further term. Clive Needham, whose 
services were provided to the Company by Skyefid Limited 
until his resignation in February 2005, did not have a Letter  
of Appointment.
888 Holdings Public Limited Company Annual Report & Accounts 2005 31    Annual Document
Name Position Employer/contracting party salary/fee date
John Anderson
1
 Chief Executive Officer The Company £475,000 14/09/2005
Aviad Kobrine Chief Financial Officer The Company £112,500 14/09/2005
Aviad Kobrine Chief Financial Officer Cassava Enterprises (Gibraltar) Limited
2
 £137,500 14/09/2005
Shay Ben‑ Yitzhak Chief Technical Officer Random Logic Limited
2
 US$250,000 14/09/2005
1 John Anderson is Non‑ executive Chairman of Burford Holdings plc and is not required to account to the Company in respect of his earnings from that company.  
He does not receive fees in respect of his directorships of IGC or eCOGRA.
2 Wholly‑ owned subsidiary companies.
3 The unexpired term of the Executive Directors’ Service Agreements is 12 months.
Chairman and Non‑ executive Directors
The Chairman and the Non‑ executive Directors do not have service contracts but have entered into Letters of Appointment.
Non‑ executive Directors’ appointments may be terminated by the Company without notice in accordance with the Company’s 
Articles of Association and the Gibraltar Companies Ordinance, except for the Chairman who is required to be given six 
months prior written notice of termination. No compensation is payable on the termination of the appointment. Each of the 
Non‑ executive Directors is appointed to serve until the 2006 Annual General Meeting and, if renewed at the Annual General 
Meeting, each Director’s appointment will continue for a term of three years.
   Annual Document
Name Position Employer/contracting party salary/fee date
Richard Kilsby Chairman The Company £140,000 14/03/2006
Brian Mattingley Deputy Chairman The Company £80,000 14/03/2006
Michael Constantine Non‑ executive Director The Company £60,000 14/09/2005
Amos Pickel Non‑ executive Director The Company £60,000 14/03/2006
Directors’ Remuneration Summary
The cash emoluments or fees received by the Directors for 2005 are shown below:
  Base  Annual  Total Total
  salary/fees bonus Benefits 2005 2004
  US$’000 US$’000 US$’000 US$’000 US$’000
Executive
John Anderson  847 1,100 217 2,164 1,678
Aviad Kobrine
2
  147 250 37 434 –
Shay Ben‑ Yitzhak
3
  63 – 12 75 –
Eyal Shaked  66 42 22 130 148
Non-executive     
Marie Stevens  222 – 5 227 –
Richard Kilsby  46 – – 46 –
Brian Mattingley  35 – – 35 –
Michael Constantine  35 – – 35 –
Clive Needham
4
  3 – – 3 1
Peter Montegriffo  27 – – 27 31
Total  1,491 1,392 293 3,176 1,858
1 Where Directors’ remuneration is denominated in Sterling, costs have been converted at the applicable rate of exchange at the transaction date.
2 Part of Mr Kobrine’s remuneration is paid by one of his employers, Cassava Enterprises (Gibraltar) Limited, a wholly‑ owned subsidiary of the Company.
3 Mr Ben‑ Yitzhak’s remuneration was paid by his employer, Random Logic Limited, a wholly‑ owned subsidiary of the Company.
4 The fees in relation to the services provided by Mr Needham were paid to Skyefid Limited.
The Bonuses became payable to John Anderson and Aviad Kobrine upon achievement of the corporate performance target 
which requires that Net Profit excluding share benefit charges for 2005 exceed US$60 million.
Remuneration Report
32 Directors’ Interests in Ordinary Shares
The notified interests of Executive and Non‑ executive Directors in the issued share capital of the Company are:
     Ordinary Shares
   31 December 2005
2
   1 January 2005
1
Executive  
John Anderson     724,758  –
Aviad Kobrine     55,621  –
Shay Ben‑ Yitzhak
3
    57,522,356  77,238,562
Eyal Shaked
3
    86,283,535  115,857,845
Non-executive  
Marie Stevens    142,857  –
Richard Kilsby    114,285  –
Brian Mattingley    142,857  –
Michael Constantine    22,857  –
Clive Needham    –  –
Peter Montegriffo    –  –
1 Or date of appointment if later and adjusted for the share capital restructures during 2005.
2 Or date of resignation if earlier.
3 These shares are held on Trust and are subject to a Relationship Agreement dated 14 September 2005 between, among others, the Company and the Principal Shareholder 
Trusts. Further details can be found on page 35. Details of share capital restructures made during 2005 are explained in note 14 to the consolidated financial statements.
No changes in Directors’ share interests have been notified between 31 December 2005 and the date of this report.
Except where stated, all interests were held beneficially.
Directors’ Interests in Share Awards and Share Options 
The number of shares subject to Share Awards or Share Options granted to the Executive Directors in 2005 and outstanding 
as at 31 December 2005 are set out below:
  Earliest
  exercise/ Exercise    Exercised/ Awards at
 Date of  vesting period Exercise Awarded Vested transferred 31 December
 award date end‑ date price 2005 2005 2005
1
 2005
John Anderson
Admission Bonus 29/9/05 4/10/05 n/a £nil 1,685,482 1,685,482 1,685,482 –
888 All‑ Employee Share Plan 4/10/05 4/10/06 4/10/15 £nil 421,371 – – 421,371
 4/10/05 4/10/07 4/10/15 £nil 421,371 – – 421,371
 4/10/05 4/10/08 4/10/15 £nil 421,370 – – 421,370
 4/10/05 4/10/09 4/10/15 £nil 421,370 – – 421,370
Aviad Kobrine
Admission Bonus 29/9/05 4/10/05 n/a £nil 55,621 55,621 55,621 –
888 All‑ Employee Share Plan
2
 29/9/05 4/10/06 n/a £nil 55,621 – – 55,621
 29/9/05 4/10/07 n/a £nil 55,621 – – 55,621
 29/9/05 4/10/08 n/a £nil 55,621 – – 55,621
 29/9/05 4/10/09 n/a £nil 55,621 – – 55,621
888 All‑ Employee Share Plan
3
 4/10/05 1/1/06 4/10/15 £nil 45,508 – – 45,508
 4/10/05 4/10/06 4/10/15 £nil 45,508 – – 45,508
 4/10/05 4/10/07 4/10/15 £nil 45,508 – – 45,508
 4/10/05 4/10/08 4/10/15 £nil 45,508 – – 45,508
 4/10/05 4/10/09 4/10/15 £nil 45,508 – – 45,508
All awards were made under the 888 All‑ Employee Share Plan during the year. None existed on or prior to 1 January 2005. 
No consideration was paid for the grant of any awards.
1 At the date of Exercise/Transfer the market price of an Ordinary Share was 175p.
2 Awarded as a share award.
3 Awarded as a nil cost option.
33 888 Holdings Public Limited Company Annual Report & Accounts 2005 The market value of one Ordinary Share was 194p at 
30 December 2005. The highest market value during  
2005 was 197.5p and the lowest was 134p.
No Director was materially interested during the year in any 
contract which was significant in relation to the business of 
the Company otherwise than as disclosed in the Prospectus 
or these Report and Accounts.
Graph of Total Shareholder Return
The period between flotation and 31 December 2005 is 
considered too short to provide a meaningful comparison  
of 888 total shareholder return against a benchmark group 
and has not been shown in this first report.
Approval
This report was approved by the Board and signed on its 
behalf by:
Brian Mattingley
Chairman of the Remuneration Committee
16 March 2006
Remuneration Report
34 The Directors submit to the members their Annual  
Report and Accounts of the Group for the year ended 
31 December 2005. The report on Corporate Governance 
and the Remuneration Report on pages 24 and 29 
respectively, form part of this Directors’ Report.
Principal Activities
During 2005 the Group’s principal activities were the 
provision of online gaming entertainment. A review of the 
business is given in the Chairman’s statement on pages 10 
to 11, the Chief Executive’s Review on pages 12 to 15 and 
the Financial Review on pages 16 to 19.
The principal subsidiary undertakings are listed on page 52.
Results and Dividends
The Group’s Profit for the financial year of US$48.0 million  
is reported in the Consolidated Income Statement on page 
38. As stated in the Prospectus, a final dividend will not  
be paid in respect of the financial year but that it is the 
intention of the Directors to declare an interim dividend 
payable in October 2006.
Directors and their Interests
Biographical details of the current Board of Directors are 
shown on page 21. The Directors who served during the 
year are shown below:
John Anderson
Marie Stevens (appointed 1 February 2005,
 resigned 10 March 2006)
Aviad Kobrine (appointed 30 August 2005)
Shay Ben‑ Yitzhak (appointed 30 August 2005)
Richard Kilsby (appointed 30 August 2005) 
Brian Mattingley (appointed 30 August 2005)
Michael Constantine (appointed 30 August 2005)
Peter Montegriffo (resigned 30 August 2005)
Eyal Shaked (resigned 30 August 2005)
Clive Needham (resigned 16 February 2005)
The beneficial and non‑ beneficial interests of the Directors 
in shares of the Company are set out in the Remuneration 
Report on pages 29 to 34.
Except as noted above, none of the Directors had any 
interests in the shares of the Company or in any material 
contract or arrangement with the Company or any of 
its subsidiaries.
Shay Ben‑ Yitzhak, Aviad Kobrine, Richard Kilsby, Brian 
Mattingley and Michael Constantine who were each 
appointed as Directors during the year, will retire at the 
Annual General Meeting and, being eligible, will offer 
themselves for election.
Directors’ Report
John Anderson will retire by rotation at the Annual General 
Meeting and, being eligible, will offer himself for re‑ election.
Amos Pickel, who was appointed as an Independent Non‑ executive Director on 14 March 2006, will retire at the 
Annual General Meeting and, being eligible, will offer himself 
for re‑ election.
Share Capital
Changes in the Company’s share capital during the period are 
given in note 14 to the Consolidated Financial Statements.
Substantial Shareholdings
As at 16 March 2006 the Company had been notified of the 
following interests in 3% or more of its Share Capital:
 Number of % Issued 
 shares share capital
E Shaked Shares Trust 86,283,535 25.60
O Shaked Shares Trust 86,283,535 25.60
Ben‑ Yitzhak Family Shares Trust 57,522,356 17.06
As disclosed in the Prospectus, a Relationship Agreement 
governing the relationship between the above Principal 
Shareholder Trusts and the Company was entered into in 
connection with the Company’s flotation. The Relationship 
Agreement provides that all transactions between the Group 
and the Principal Shareholder Trusts will be on a normal 
business basis, that the Group will be allowed to carry on 
business independently of them and that the Principal 
Shareholder Trusts will not cause the Group to contravene 
the Combined Code unless required by law or as 
contemplated in the Relationship Agreement. It further 
provides that each of the Principal Shareholder Trusts will 
not solicit Group employees without consent, that only 
Independent Directors can vote on proposals to amend the 
Relationship Agreement, that the Principal Shareholder 
Trusts will consult the Group prior to disposing of a 
significant number of shares in order to maintain an orderly 
market and shall not disclose confidential information 
unless required to do so or having first received consent. 
The Relationship Agreement also includes restrictions on 
the Principal Shareholder Trusts power to appoint Directors 
and obligations to ensure that the majority of the Board, 
excluding the Chairman, is independent. The Principal 
Shareholder Trusts can nominate a Non‑ executive Director 
for appointment to the Board and the Directors will  
consider the appointment of the nominated person to  
the Remuneration Committee. In the event that this right  
is exercised and it results in fewer than half the Board 
(excluding the Chairman of the Board) being Independent 
Directors, such appointment shall only become effective 
upon the appointment to the Board of an additional 
Independent Director. Such restrictions and obligations 
apply whilst the E Shaked Shares Trust and O Shaked 
Shares Trust collectively or the Ben‑ Yitzhak Family Shares 
Trust individually, hold not less than 7.5%.
888 Holdings Public Limited Company Annual Report & Accounts 2005 35 Charitable Contributions
Contributions for charitable purposes were made during the 
year amounting to approximately US$70,000.
Directors’ Responsibility Statement
The Directors are responsible for keeping proper accounting 
records which disclose with reasonable accuracy at any time 
the financial position of the Company, for safeguarding the 
assets, for taking reasonable steps for the prevention  
and detection of fraud and other irregularities and for  
the preparation of a Directors’ report which complies with the 
Gibraltar Companies (Accounts) Ordinance 1999, the Gibraltar 
Companies (Consolidated Accounts) Ordinance 1999 and  
the Gibraltar Companies Ordinance 1930, as amended.
Financial statements are published on the Group’s website 
in accordance with legislation in the UK governing the 
preparation and dissemination of financial statements, 
which may vary from legislation in other jurisdictions. The 
maintenance and integrity of the Group’s website is the 
responsibility of the Directors. The Directors’ responsibility 
also extends to the ongoing integrity of the financial 
statements contained therein.
The Directors are responsible for preparing the annual 
report and the financial statements. The Directors are 
required to prepare financial statements for the Group in 
accordance with International Financial Reporting Standards 
(IFRSs) and have also chosen to prepare financial 
statements for the Company in accordance with IFRSs.
Group and Parent Company Financial Statements
Company law requires the Directors to prepare such 
financial statements in accordance with International 
Financial Reporting Standards and the Gibraltar Companies 
(Accounts) Ordinance 1999, the Gibraltar Companies 
(Consolidated Accounts) Ordinance 1999 and the Gibraltar 
Companies Ordinance 1930, as amended.
International Accounting Standard 1 requires that financial 
statements present fairly for each financial year the 
Company’s financial position, financial performance and 
cash flows. This requires the faithful representation of the 
effects of transactions, other events and conditions in 
accordance with the definitions and recognition criteria for 
assets, liabilities, income and expenses set out in the 
Directors’ Report
International Accounting Standards Board’s “Framework for 
the preparation and presentation of financial statements”. 
In virtually all circumstances, a fair presentation will be 
achieved by compliance with all applicable International 
Financial Reporting Standards. A fair presentation also 
requires the Directors to:
consistently select and apply appropriate accounting 
policies;
present information, including accounting policies, in a 
manner that provides relevant, reliable, comparable and 
understandable information; and
provide additional disclosures when compliance with the 
specific requirements in IFRSs is insufficient to enable 
members to understand the impact of particular 
transactions, other events and conditions on the entity’s 
financial position and financial performance.
Auditors
During the year ended 31 December 2005 BDO Stoy 
Hayward LLP were appointed auditors for the purposes of 
the Company meeting its obligations to prepare financial 
statements under the Listing Rules of the UK Listing 
Authority. For the purposes of meeting the Company’s 
statutory requirements under Section 182 of the Gibraltar 
Companies Ordinance 1930, as amended and the filing of 
the Company’s financial statements in Gibraltar pursuant to 
Section 10 of the Gibraltar Companies (Accounts) Ordinance 
1999, as amended, BDO Fidecs Chartered Accountants 
Limited have been appointed to act as auditors.
A resolution for the re‑ appointment of BDO Stoy Hayward 
LLP and BDO Fidecs Chartered Accountants Limited will be 
proposed at the Annual General Meeting on 10 May 2006.
On behalf of the Board 
John Anderson
Chief Executive Officer
16 March 2006
■
■
■
36 We have audited the Group and the Company financial 
statements (the “financial statements”) of 888 Holdings 
Public Limited Company for the year ended 31 December 
2005 which comprise the Group Income Statement, the 
Group and Company Balance Sheets, the Group and 
Company Cash Flow Statements, the Group and Company 
Statement of Changes in Equity and the related notes 1 to 
22 to the Consolidated Financial Statements and notes 1  
to 8 to the Company Financial Statements. These financial 
statements have been prepared under the accounting 
policies set out therein.
Respective Responsibilities of Directors and Auditors
The Directors’ responsibilities for preparing the Annual Report 
and the financial statements in accordance with applicable 
law and International Financial Reporting Standards (“IFRSs”) 
as adopted by the European Union are set out in the 
Statement of Directors’ Responsibilities. 888 Holdings Public 
Limited Company has complied with the requirements of 
rules 9.8.6 and 9.8.8 of the Listing Rules in preparing its 
Annual Report as if it was incorporated in the UK.
Our responsibility is to audit the financial statements in 
accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland). 
We report to you our opinion as to whether the financial 
statements give a true and fair view and whether the financial 
statements have been properly prepared in accordance  
with the Gibraltar Companies (Accounts) Ordinance 1999, 
Gibraltar Companies (Consolidated Accounts) Ordinance 
1999 and the Gibraltar Companies Ordinance 1930, as 
amended and the part of the Remuneration Report to be 
audited has been properly prepared in accordance with 
Schedule 7A of the UK Companies Act 1985. We also  
report to you if, in our opinion, the Directors’ Report is not 
consistent with the financial statements, if the Company has 
not kept proper accounting records, or if we have not received 
all the information and explanations we require for our audit 
or if information specified by the Listing Rules and Gibraltar 
legislation is not disclosed.
We review whether the Corporate Governance Statement 
reflects the Company’s compliance with the nine provisions 
of the 2003 FRC Combined Code specified for our review  
by the Listing Rules of the Financial Services Authority, and 
we report if it does not. We are not required to consider 
whether the Board’s statements on internal control cover all 
risks and controls, or form an opinion on the effectiveness 
of the Group’s corporate governance procedures or its risk 
and control procedures.
We read other information contained in the Annual Report 
and consider whether it is consistent with the audited 
financial statements. The other information comprises  
only the Directors’ Report, Chairman’s Statement, Chief 
Executive’s Review, Financial Review, Regulatory and 
Compliance Review, Corporate Governance Statement and 
Remuneration Report. We consider the implications for our 
report if we become aware of any apparent misstatements 
or material inconsistencies with the financial statements. 
Our responsibilities do not extend to any other information. 
Our report has been prepared pursuant to the terms of our 
engagement letter and for no other purpose. No person is 
entitled to rely on this report unless such a person is a 
person entitled to rely upon this report by virtue of the terms 
of our engagement letter or has been expressly authorised 
to do so by our prior written consent. Save as above, we do 
not accept responsibility for this report to any other person 
or for any other purpose and we hereby expressly disclaim 
any and all such liability.
Basis of Audit Opinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the 
Auditing Practices Board. An audit includes examination,  
on a test basis, of evidence relevant to the amounts and 
disclosures in the financial statements and the part of the 
Remuneration Report to be audited. It also includes an 
assessment of the significant estimates and judgements 
made by the Directors in the preparation of the financial 
statements, and of whether the accounting policies are 
appropriate to the Group’s and Company’s circumstances, 
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all  
the information and explanations which we considered 
necessary in order to provide us with sufficient evidence to 
give reasonable assurance that the financial statements are 
free from material misstatement, whether caused by fraud 
or other irregularity or error. In forming our opinion we also 
evaluated the overall adequacy of the presentation of 
information in the financial statements and the part of the 
Remuneration Report to be audited.
Opinion
In our opinion:
the Group financial statements give a true and fair view, in 
accordance with IFRSs as adopted by the European Union, 
of the state of the Group’s and the Company’s affairs as 
at 31 December 2005 and of the Group’s Profit for the 
year then ended;
the financial statements have been properly prepared in 
accordance with the Gibraltar Companies (Accounts) 
Ordinance 1999, Gibraltar Companies (Consolidated 
Accounts) Ordinance 1999 and the Gibraltar Companies 
Ordinance 1930, as amended; and
the part of the Remuneration Report to be audited has 
been properly prepared in accordance with Schedule 7A 
of the UK Companies Act 1985.
BDO Stoy Hayward LLP BDO Fidecs Chartered  
Chartered Accountants Accountants Limited
8 Baker Street,  Montagu Pavilion,
London W1U 3LL 8‑ 10 Queensway, 
UK Gibraltar
Date: 16 March 2006
■
■
■
Independent Auditors’ Report To The Shareholders  
of 888 Holdings Public Limited Company
888 Holdings Public Limited Company Annual Report & Accounts 2005 37 	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 Note	 US$’000	 US$’000
Net Gaming Revenue	 	 	 	 2(d)	 271,031	 177,904
Operating	 expenses	 	 	 	 	 72,960	 50,141
Research	 and	 development	 expenses	 	 	 	 	 11,318	 6,866
Selling	 and	 marketing	 expenses	 	 	 	 	 100,009	 64,488
Administrative	 expenses	 	 	 	 4	 37,328	 13,586
	 Operating	 Profit	 before	 share	 benefit	 charges	 	 	 	 66,650	 42,823
	 Charges	 in	 respect	 of	 shares	 granted	 to	 employees	 on	 IPO	 	 	 	 	 	 15,087	 –
	 Charges	 in	 respect	 of	 share	 and	 option	 awards	 	 	 	 	 2,147	 –
	 Total	 share	 benefit	 charges	 	 	 	 	 17,234	 –
Operating	 Profit	 	 	 	 5	 49,416	 42,823
Finance	 income	 	 	 	 	 735	 266
Profit before tax	 	 	 	 	 50,151	 43,089
Taxation	 	 	 	 6	 2,136	 1,991
Profit after tax for the year attributable to equity holders of parent	 	 	 	 48,015	 41,098
Earnings per share	 	 	 	 Basic	 	 	 	 7	 14.2¢	 12.2¢
Diluted	 	 	 	 	 14.2¢	 12.2¢
All	 amounts	 relate	 to	 continuing	 activities.
The	 notes	 on	 pages	 42	 to	 55	 form	 part	 of	 these	 financial	 statements.
Consolidated Income Statement
for	 the	 year	 ended	 31	 December	 2005
38 Consolidated Balance Sheet
at	 31	 December	 2005
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 Note	 US$’000	 US$’000
Assets
Non-current assets
Intangible	 assets	 	 	 	 9	 –	 –
Property,	 plant	 and	 equipment	 	 	 	 10	 8,341	 7,242
Deferred	 taxes	 	 	 	 11	 361	 –
	 	 	 	 	 8,702	 7,242
Current assets
Cash	 and	 cash	 equivalents	 	 	 	 12	 62,202	 40,335
Trade	 and	 other	 receivables	 	 	 	 	 13	 15,013	 15,225
Amounts	 due	 from	 related	 parties	 	 	 	 19	 1,649	 2,245
	 	 	 	 	 78,864	 57,805
Total assets	 	 	 	 	 87,566	 65,047
Equity and liabilities
Equity attributable to equity holders of the parent 
Share	 capital	 	 	 	 14	 3,068	 3,066
Share	 benefit	 reserve	 	 	 	 	 2,147	 –
Retained	 earnings	 	 	 	 	 27,115	 27,113
Total equity attributable to equity holders of the parent	 	 	 	 	 32,330	 30,179
Liabilities
Current liabilities
Trade	 and	 other	 payables	 	 	 	 15	 25,593	 15,346
Member	 deposits	 	 	 	 	 29,325	 19,141
Amounts	 due	 to	 related	 parties	 	 	 	 19	 318	 381
Total liabilities	 	 	 	 	 55,236	 34,868
Total equity and liabilities	 	 	 	 	 87,566	 65,047
Approved	 by	 the	 Board	 and	 authorised	 for	 issue	 on	 16	 March	 2006.
John Anderson   Aviad Kobrine
Chief	 Executive	 Officer	 	 	 Chief 	 Financial	 Officer
The	 notes	 on	 pages	 42	 to	 55	 form	 part	 of	 these	 financial	 statements.
39 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 	 	 	 Share 	 	 Share 	 Benefit	 Accumulated
	 	 	 capital	 reserve	 profit	 Total
	 	 	 US$’000	 US$’000	 US$’000	 US$’000
Balance at 1 January 2004	 	 	 15,443	 –	 12,115	 27,558
Net	 Profit	 for	 the	 year	 	 	 –	 –	 41,098	 41,098
Dividend	 paid	 	 	 –	 –	 (26,100)	 (26,100)
Capital	 reduction	 	 	 (12,442)	 –	 –	 (12,442)
Share	 capital	 issued	 	 	 65	 –	 –	 65
Balance at 1 January 2005	 	 	 3,066	 –	 27,113	 30,179
Net	 Profit	 for	 the	 year	 	 	 – – 48,015 48,015
Dividend	 paid	 	 	 – – (63,100) (63,100)
Redemption	 of	 preference	 share	 capital	 	 	 (1) – – (1)
Share	 benefit	 charge	 	 	 – 17,234 – 17,234
Transfer	 of	 shares	 granted	 on	 IPO	 	 	 –	 (15,087) 15,087 –
Redenomination	 translation	 effect	 	 	 3 – – 3
Balance at 31 December 2005   3,068 2,147 27,115 32,330
The	 notes	 on	 pages	 42	 to	 55	 form	 part	 of	 these	 financial	 statements.
Consolidated Statement of Changes in Equity
for	 the	 year	 ended	 31	 December	 2005
40 	 	 	 Year ended Year ended	 Year 	 ended	 Year 	 ended
	 	 	 31 December 31 December	 31 	 December	 31 	 December
	 	 	 2005 2005	 2004	 2004
	 	 	 US$’000 US$’000	 US$’000	 US$’000
Cash flows from operating activities
	 Profit	 before	 income	 tax	 	 	 50,151	 	 43,089
Adjustments for
	 Depreciation	 	 	 2,700	 	 2,427
	 Loss	 on	 sale	 of	 property,	 plant	 and	 equipment	 	 	 32	 	 19
	 Amortisation	 	 	 20	 	 –
	 Impairment	 	 	 832	 	 –
	 Translation	 effect	 of	 redenomination	 of	 share	 capital	 	 	 3	 	 –
	 Interest	 received	 	 	 (683)	 	 (266)
	 Share	 benefit	 charges	 	 	 17,234	 	 –
	 	 	 70,289	 	 45,269
Decrease/(increase)	 in	 trade	 receivables	 	 	 579	 	 (2,080)
Increase	 in	 related	 party	 balances	 	 	 (638)	 	 (1,286)
Decrease/(increase)	 in	 other	 accounts	 receivable	 	 	 142	 	 (1,548)
Increase/(decrease)	 in	 trade	 payables	 	 	 1,177	 	 (2,350)
Increase	 in	 member	 deposits	 	 10,184	 	 10,751
Increase	 in	 other	 accounts	 payable	 	 	 	 9,680	 	 3,699
Cash generated from operations	 	 91,413	 	 52,455
Income	 tax	 paid	 	 	 (3,160)	 	 (1,016)
Net cash generated from operating activities	 	 	 88,253	 	 51,439
Cash flows from investing activities
	 Purchase	 of	 intangibles	 	 	 (400)	 	 –
	 Cash	 acquired	 on	 combination	 with	 ACTeCASH	 	 	 263  –
	 Purchase	 of	 property,	 plant	 and	 equipment	 	 	 (3,831)	 	 (1,555)
	 Proceeds	 from	 sale	 of	 property,	 plant	 and	 equipment	 	 	 –	 	 78
	 Acquisition	 of	 Random	 Logic	 Limited	 net	 of	 cash	 acquired	 	 	 –	 	 (937)
	 Interest	 received	 	 	 683	 	 266
Net cash used in investing activities	 	 	 	 (3,285)	 	 (2,148)
Cash flows from financing activities
	 Reduction	 in	 share	 capital	 	 	 (1)	 	 (12,442)
	 Dividends	 paid	 	 	 (63,100)	 	 (26,100)
Net cash used in financing activities	 	 	 	 (63,101)	 	 (38,542)
Net increase in cash and cash equivalents	 	 	 	 21,867	 	 10,749
Cash	 and	 cash	 equivalents	 at	 the	 beginning	 of	 the	 year	 	 	 	 40,335	 	 29,586
Cash and cash equivalents at the end of the year	 	 	 	 62,202	 	 40,335
The	 notes	 on	 pages	 42	 to	 55	 form	 part	 of	 these	 financial	 statements.
Consolidated Statement of Cash Flows
for	 the	 year	 ended	 31	 December	 2005
41 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 1 General information
(a) Company description and activities
888	 Holdings	 Public	 Limited	 Company	 (the	 “Company”)	 and	 its	 subsidiaries	 (together	 the	 “Group”)	 was	 founded	 in	 1997	 	 and	 originally	 operated	 as	 a	 holding	 company	 domiciled	 in	 the	 British	 Virgin	 Islands.	 On	 12	 January	 2000,	 the	 Company	 was	 continued	 in	 Antigua	 and	 Barbuda	 as	 a	 corporation	 under	 the	 International	 Business	 Corporation	 Act	 1982	 with	 registered	 number	 12512.	 On	 17	 December	 2003,	 the	 Company	 redomiciled	 in	 Gibraltar	 with	 the	 Company	 number	 90099.	 	 On	 4	 October	 2005,	 the	 Company	 listed	 on	 the	 London	 Stock	 Exchange.
The	 Group	 has	 developed	 innovative	 proprietary	 software	 applications	 solutions	 for	 virtual	 Casinos,	 Poker	 rooms,	 	 e-commerce,	 credit-card	 clearing	 services	 and	 online	 advertising	 methodologies.
Cassava	 Enterprises	 (Gibraltar)	 Limited	 (a	 subsidiary)	 carried	 out	 the	 operations	 of	 the	 Group	 during	 the	 year,	 principally	 under	 the	 name	 www.888.com	 under	 the	 terms	 of	 a	 gaming	 license	 issued	 in	 Gibraltar.	 (b) Definitions
In	 these	 financial	 statements:
The	 Company	 888 	 Holdings	 Public	 Limited	 Company.
The	 Group	 888 	 Holdings	 Public	 Limited	 Company	 and	 its	 subsidiaries.
Subsidiaries	 Companies 	 over	 which	 the	 Company	 has	 control	 (as	 defined	 in	 International	 Accounting	 Standard	 27	 “Consolidated	 and	 Separate	 Financial	 Statements”	 and	 whose	 accounts	 are	 consolidated	 with	 those	 	 of	 the	 Company.
Related	 parties	 As 	 defined	 in	 International	 Accounting	 Standard	 24	 –	 “Related	 Party	 Disclosures”.
2 Significant accounting policies
The	 significant	 accounting	 policies	 applied	 in	 the	 preparation	 of	 the	 financial	 statements	 are	 as	 follows:
(a) Basis of preparation
The	 consolidated	 financial	 statements	 of	 the	 Group	 have	 been	 prepared	 in	 accordance	 with	 International	 Financial	 Reporting	 Standards,	 including	 International	 Accounting	 Standards	 (“IAS”)	 and	 Interpretations,	 adopted	 by	 the	 International	 Accounting	 Standards	 Board	 (“IASB”)	 and	 endorsed	 for	 use	 by	 companies	 listed	 on	 an	 EU	 regulated	 market.
The	 significant	 accounting	 policies	 applied	 in	 the	 financial	 statements	 of	 the	 Group	 in	 the	 prior	 years	 are	 applied	 consistently	 in	 these	 financial	 statements.
The	 financial	 statements	 are	 presented	 in	 thousands	 of	 US	 dollars	 (US$’000)	 because	 that	 is	 the	 currency	 the	 Group	 primarily	 operates	 in.
The	 consolidated	 financial	 statements	 comply	 with	 the	 Gibraltar	 Companies	 (Accounts)	 Ordinance	 1999,	 the	 Gibraltar	 Companies	 (Consolidated	 Accounts)	 Ordinance	 1999	 and	 the	 Gibraltar	 Companies	 Ordinance	 1930,	 as	 amended.
Notes to the Consolidated Financial Statements
42 2 Significant accounting policies	 continued
(b) Basis of consolidation
The	 consolidated	 financial	 statements	 include	 the	 accounts	 of	 the	 Company	 and	 its	 subsidiaries.	 The	 subsidiaries	 are	 companies	 controlled	 by	 888	 Holdings	 Public	 Limited	 Company.	 Control	 exists	 where	 the	 Company	 has	 the	 power	 to	 govern	 the	 financial	 and	 operating	 policies	 of	 an	 entity	 so	 as	 to	 obtain	 benefits	 from	 its	 activities.	 Subsidiaries	 are	 consolidated	 from	 the	 date	 the	 parent	 gained	 control	 until	 such	 time	 as	 control	 ceases.	 The	 financial	 statements	 of	 the	 subsidiaries	 are	 included	 in	 the	 consolidated	 financial	 statements	 using	 the	 purchase	 method	 of	 accounting.	 On	 the	 date	 of	 the	 acquisition,	 the	 assets	 and	 liabilities	 of	 a	 subsidiary	 are	 measured	 at	 their	 fair	 values	 and	 any	 excess	 of	 the	 fair	 value	 of	 the	 acquisition	 over	 the	 fair	 values	 of	 the	 identifiable	 net	 assets	 acquired	 is	 recognised	 as	 goodwill.
Inter-company	 transactions	 and	 balances	 are	 eliminated	 on	 consolidation.
The	 financial	 statements	 of	 subsidiaries	 are	 prepared	 for	 the	 same	 reporting	 period	 as	 the	 parent	 company	 and	 using	 consistent	 accounting	 policies.
(c) Use of estimates
The	 preparation	 of	 financial	 statements	 in	 conformity	 with	 generally	 accepted	 accounting	 principles	 requires	 management	 to	 make	 estimates	 and	 assumptions	 that	 affect	 the	 amounts	 reported	 in	 the	 financial	 statements	 and	 accompanying	 notes.	 Actual	 results	 could	 differ	 from	 those	 estimates.
(d) Net Gaming Revenue
Revenue	 is	 recognised	 to	 the	 extent	 that	 it	 is	 probable	 that	 economic	 benefits	 will	 flow	 to	 the	 Group	 and	 the	 revenue	 can	 be	 reliably	 measured.
Net	 Gaming	 Revenue	 is	 defined	 as	 follows:
Casino
Casino	 winnings	 that	 are	 the	 differences	 between	 the	 amounts	 of	 bets	 placed	 by	 members	 less	 amounts	 won	 by	 members.
Poker
Ring	 games:	 	 Rake, 	 which	 is	 the	 commission	 charged	 from	 each	 winning	 hand	 played.
Tournaments:	 Entry 	 fees	 charged	 for	 participation	 in	 poker	 tournaments.
Casino	 winnings	 and	 revenues	 from	 the	 poker	 business	 are	 stated	 after	 deduction	 of	 certain	 bonuses	 granted	 to	 members.
	 (e) Foreign currency
Monetary	 assets	 and	 liabilities	 denominated	 in	 non-US	 dollar	 currencies	 are	 translated	 into	 US	 dollar	 equivalents	 	 using	 year-end	 spot	 foreign	 exchange	 rates.	 Non-monetary	 assets	 and	 liabilities	 are	 translated	 using	 exchange	 	 rates	 prevailing	 at	 the	 dates	 of	 the	 transactions.	 Exchange	 rate	 differences	 on	 foreign	 currency	 transactions	 	 are	 included	 in	 administrative	 expenses.
The	 results	 and	 financial	 position	 of	 all	 Group	 entities	 that	 have	 a	 functional	 currency	 different	 from	 US	 dollars	 are	 translated	 into	 the	 presentation	 currency	 as	 follows:
(i)	 monetary 	 assets	 and	 liabilities	 for	 each	 balance	 sheet	 presented	 are	 translated	 at	 the	 closing	 rate	 at	 the	 date	 of	 that	 balance	 sheet;
(ii)	income 	 and	 expenses	 for	 each	 income	 statement	 are	 translated	 at	 an	 average	 exchange	 rate	 (unless	 this	 average	 is	 	 not	 a	 reasonable	 approximation	 of	 the	 cumulative	 effect	 of	 the	 rates	 prevailing	 on	 the	 transaction	 dates,	 in	 which	 case	 income	 and	 expenses	 are	 translated	 at	 the	 dates	 of	 the	 transactions);	 and
(iii)	exchange 	 rate	 differences	 on	 translation	 of	 Group	 entities	 that	 have	 functional	 currencies	 different	 from	 US	 dollars	 are	 included	 in	 administrative	 expenses.
43 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 2 Significant accounting policies	 continued
(f) Research and development costs
Research	 and	 development	 expenditure	 is	 charged	 to	 the	 statement	 of	 income	 as	 incurred.	 IAS	 38	 “Intangible	 Assets”	 requires	 capitalisation	 of	 certain	 software	 development	 costs,	 subsequent	 to	 technological	 and	 commercial	 feasibility	 being	 established	 and	 the	 Group	 having	 sufficient	 resources	 to	 complete	 development.	 Based	 on	 the	 Group’s	 product-development	 process,	 technological	 feasibility	 and	 therefore	 the	 creation	 of	 substantially	 improved	 product,	 is	 only	 established	 upon	 the	 completion	 	 of	 a	 working	 model.	 The	 Group	 generally	 does	 not	 incur	 any	 significant	 costs	 between	 the	 completion	 of	 the	 working	 model	 	 and	 the	 point	 at	 which	 the	 product	 is	 ready	 for	 general	 release.		 (g) Taxation
The	 tax	 expense	 represents	 tax	 payable	 for	 the	 year	 based	 on	 currently	 applicable	 tax	 rates.	 Deferred	 tax	 assets	 and	 liabilities	 are	 recognised	 where	 the	 carrying	 amount	 of	 an	 asset	 or	 liability	 in	 the	 balance	 sheet	 differs	 from	 its	 tax	 base.	 Recognition	 of	 deferred	 tax	 assets	 is	 restricted	 to	 those	 instances	 where	 it	 is	 probable	 that	 taxable	 profit	 will	 be	 available	 against	 which	 the	 difference	 can	 be	 utilised.	 The	 amount	 of	 the	 asset	 or	 liability	 is	 determined	 using	 tax	 rates	 that	 have	 been	 enacted	 or	 substantially	 enacted	 by	 the	 balance	 sheet	 date	 and	 are	 expected	 to	 apply	 when	 the	 deferred	 tax	 liabilities/(assets)	 are	 settled/(recovered).	 Deferred	 tax	 balances	 are	 not	 discounted.
(h) Intangible assets
All	 intangible	 assets	 are	 initially	 recognised	 at	 cost.
Amortisation	 is	 provided	 to	 write	 off	 the	 cost,	 less	 estimated	 residual	 values,	 of	 all	 intangible	 assets,	 evenly	 over	 their	 expected	 useful	 lives,	 and	 the	 charge	 is	 included	 within	 operating	 expenses.	 Intangible	 assets	 are	 reviewed	 annually	 for	 evidence	 of	 impairment.	 The	 annual	 amortisation	 rates	 are	 as	 follows:
Domain	 names:	 10%
	 (i) Property, plant and equipment
Property,	 plant	 and	 equipment	 is	 stated	 at	 historic	 cost	 less	 accumulated	 depreciation.	 Carrying	 amounts	 are	 reviewed	 	 at	 each	 balance	 sheet	 date	 for	 impairment.
Depreciation	 is	 calculated	 using	 the	 straight-line	 method,	 at	 annual	 rates	 estimated	 to	 write	 off	 the	 cost	 of	 the	 assets	 less	 their	 estimated	 residual	 values	 over	 their	 expected	 useful	 lives.	 The	 annual	 depreciation	 rates	 are	 as	 follows:	 IT	 equipment	 33%
Office	 furniture	 and	 equipment	 7–15%
Motor	 vehicles	 15%
Leasehold	 improvements	 Over	 the	 shorter	 of	 the	 term	 of	 the	 lease	 or	 useful	 lives.
(j) Impairment of non-financial assets
Impairment	 tests	 on	 goodwill	 and	 other	 intangible	 assets	 with	 indefinite	 useful	 economic	 lives	 are	 undertaken	 annually	 on	 31	 December.	 Other	 non-financial	 assets	 are	 subject	 to	 impairment	 tests	 whenever	 events	 or	 changes	 in	 circumstances	 indicate	 that	 their	 carrying	 amount	 may	 not	 be	 recoverable.	 Where	 the	 carrying	 value	 of	 an	 asset	 exceeds	 its	 recoverable	 amount	 (i.e.	 the	 higher	 of	 value	 in	 use	 and	 fair	 value	 less	 costs	 to	 sell),	 the	 asset	 is	 written	 down	 accordingly.
Where	 it	 is	 not	 possible	 to	 estimate	 the	 recoverable	 amount	 of	 an	 individual	 asset,	 the	 impairment	 test	 is	 carried	 out	 on	 	 the	 asset’s	 cash	 generating	 unit	 (i.e.	 the	 lowest	 group	 of	 assets	 in	 which	 the	 asset	 belongs	 for	 which	 there	 are	 separately	 identifiable	 cash	 flows).
(k) Trade receivables
Trade	 receivables	 are	 recognised	 and	 carried	 at	 the	 original	 transaction	 value	 and	 principally	 comprise	 amounts	 due	 from	 the	 credit-card	 companies	 and	 from	 e-payment	 companies.	 An	 estimate	 for	 doubtful	 debts	 is	 made	 when	 collection	 of	 the	 full	 amount	 is	 no	 longer	 probable.	 Bad	 debts	 are	 written	 off	 when	 identified.
Notes to the Consolidated Financial Statements
44 2 Significant accounting policies	 continued
(l) Cash and cash equivalents
Cash	 comprises	 cash	 in	 hand	 and	 balances	 with	 banks.	 Cash	 equivalents	 are	 short	 term,	 highly	 liquid	 investments	 that	 are	 readily	 convertible	 to	 known	 amounts	 of	 cash.	 They	 include	 short-term	 bank	 deposits	 originally	 purchased	 with	 maturities	 	 of	 three	 months	 or	 less.	 (m) Equity
Equity	 issued	 by	 the	 Company	 is	 recorded	 as	 the	 proceeds	 received,	 net	 of	 direct	 issue	 costs.
(n) Trade and other payables
Trade	 and	 other	 payables	 are	 recognised	 and	 carried	 at	 the	 original	 transaction	 value.
(o) Chargebacks and returned e-cheques
The	 cost	 of	 chargebacks	 and	 returned	 e-cheques	 is	 included	 in	 operating	 expenses.
(p) Leases
Leases	 are	 classified	 as	 finance	 leases	 wherever	 the	 terms	 of	 the	 lease	 transfer	 substantially	 all	 the	 risks	 and	 rewards	 	 of	 ownership	 to	 the	 Group.	 All	 other	 leases	 are	 classified	 as	 operating	 leases	 and	 rentals	 payable	 are	 charged	 to	 income	 	 on	 a	 straight-line	 basis	 over	 the	 term	 of	 the	 lease.
	 (q) Provisions
Provisions	 are	 recognised	 when	 the	 Group	 has	 a	 present	 or	 constructive	 obligation	 as	 a	 result	 of	 a	 past	 event	 from	 which	 	 it	 is	 probable	 that	 it	 will	 result	 in	 an	 outflow	 of	 economic	 benefits	 that	 can	 be	 reasonably	 estimated.
(r) Financial instruments
The	 carrying	 amounts	 of	 cash	 and	 cash	 equivalents,	 related	 parties,	 trade	 receivables,	 other	 accounts	 receivable,	 trade	 payables,	 member	 deposits	 and	 other	 accounts	 payable	 approximate	 to	 their	 fair	 value.
The	 Group	 does	 not	 hold	 or	 issue	 derivative	 financial	 instruments	 for	 trading	 purposes.
(s) Segment information
A	 business	 segment	 is	 a	 distinguishable	 component	 of	 the	 Group	 that	 is	 engaged	 in	 providing	 an	 individual	 product	 or	 service	 or	 a	 Group	 of	 related	 products	 or	 services	 and	 that	 is	 subject	 to	 risks	 and	 returns	 that	 are	 different	 from	 those	 of	 other	 business	 segments.	 A	 geographical	 segment	 is	 a	 distinguishable	 component	 of	 the	 Group	 that	 is	 engaged	 in	 providing	 products	 or	 services	 within	 a	 particular	 environment	 and	 that	 is	 subject	 to	 risks	 and	 returns	 that	 are	 different	 from	 those	 of	 components	 operating	 in	 other	 economic	 environments.	 The	 Group	 operates	 in	 the	 following	 online	 gaming	 segments:
Casino
Poker	 (t) Member deposits
Member	 deposits	 are	 the	 amounts	 that	 clients	 place	 in	 the	 Group’s	 electronic	 “wallet”	 or	 bankroll,	 including	 provision	 for	 bonuses	 granted	 by	 the	 Group,	 less	 management	 fees	 and	 charges	 applied	 to	 member	 accounts,	 along	 with	 full	 provision	 	 for	 casino	 jackpots.	 These	 amounts	 are	 repayable	 on	 demand.
	 ■
■
45 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 3 Segment information
Business segments
	 Casino	 Poker	 Consolidated
	 Year ended	 Year 	 ended	 Year ended	 Year 	 ended	 Year ended	 Year 	 ended
	 31 December	 31 	 December	 31 December	 31 	 December	 31 December	 31 	 December
	 	 2005	 	 2004	 2005	 2004	 2005	 	 2004
	 US$’000	 US$’000	 US$’000	 US$’000	 US$’000	 US$’000
Net Gaming Revenue	 161,214	 138,587	 109,817	 39,317	 271,031	 177,904
Result
Segment	 result	 79,555	 77,207 55,169	 13,218	 134,724	 90,425
Unallocated	 corporate	 expenses
1
	 	 	 	 	 85,308	 47,602
Operating	 Profit	 	 	 	 	 49,416	 42,823
Finance	 income	 	 	 	 	 735	 266
Income	 tax	 expense	 	 	 	 	 (2,136)	 (1,991)
Net	 Profit	 for	 the	 year	 	 	 	 	 48,015	 41,098
Assets
Unallocated	 corporate	 assets	 	 	 	 	 87,566	 65,047
Total	 assets	 	 	 	 	 87,566	 65,047
Liabilities
Segment	 liabilities	 –	 Poker	 	 	 	 	 20,099	 11,613
Segment	 liabilities	 –	 Casino	 	 	 	 	 9,226	 7,528
Unallocated	 corporate	 liabilities	 	 	 	 	 25,911	 15,727
Total	 liabilities	 	 	 	 	 55,236	 34,868
1	 Including 	 share	 benefit	 charges	 of	 US$17,234,000	 (2004:	 US$nil).
Other	 than	 where	 amounts	 are	 allocated	 specifically	 to	 the	 Casino	 and	 Poker	 segments	 above,	 the	 expenses,	 assets	 and	 liabilities	 relate	 jointly	 to	 both	 segments.	 Any	 allocation	 of	 these	 items	 would	 be	 arbitrary.
	 Geographical segments
The	 Group’s	 performance	 can	 also	 be	 reviewed	 by	 considering	 the	 geographical	 markets	 and	 geographical	 locations	 within	 which	 the	 Group	 operates.	 This	 information	 is	 outlined	 below:
Net Gaming Revenue by geographical market
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
USA	 	 	 	 148,049	 102,799
UK	 	 	 	 	 53,871	 26,585
Europe	 	 	 	 	 47,289	 35,654
Americas	 	 	 	 	 12,007	 6,118
Rest	 of	 World	 	 	 	 9,815	 6,748
	 	 	 	 	 271,031	 177,904
Notes to the Consolidated Financial Statements
46 3 Segment information	 continued
Assets by geographical location 
	 Carrying	 amount	 	 Additions	 to
	 of	 segment	 assets	 	 property,	 plant
	 by	 location	 and	 equipment
	 	 	 Year ended	 Year 	 ended	 Year ended	 Year 	 ended
	 	 	 31 December	 31 	 December	 31 December	 31 	 December
	 	 	 2005	 2004	 2005	 2004
	 	 	 US$’000	 US$’000	 US$’000	 US$’000
Caribbean	 	 	 235	 457	 72	 –
Europe	 	 74,589	 53,661	 1,731	 709
Rest	 of	 World	 	 	 12,742	 10,929	 2,028	 846
	 	 	 87,566	 65,047	 3,831	 1,555
4 Administrative expenses
	 	 	 	 	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 US$’000	 US$’000
Share	 benefit	 charges	 –	 all	 equity	 settled	 	 	 	 17,234	 –
Other	 administrative	 expenses	 	 	 	 	 	 20,094	 13,586
Administrative expenses	 	 	 	 	 37,328	 13,586
5 Operating Profit
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Operating	 Profit	 is	 stated	 after	 charging:
Staff	 costs	 	 	 	 	 41,936	 28,916
Audit	 fees	 	 	 	 	 357	 168
Other	 fees	 paid	 to	 auditors	 	 	 	 	 104	 4
Depreciation	 	 	 	 	 2,700	 2,427
Amortisation	 	 	 	 	 20	 –
Impairment	 	 	 	 	 832	 –
Chargebacks	 and	 returned	 e-cheques	 	 	 	 18,643	 12,910
Exchange	 losses/(gains)	 	 	 	 	 423	 (268)
Payment	 service	 providers’	 commissions	 	 	 	 	 17,655	 11,013
Share	 benefit	 charges	 –	 all	 equity	 settled	 	 	 	 	 17,234	 –
During	 the	 year	 the	 auditors	 were	 paid	 fees	 for	 work	 done	 in	 respect	 of	 the	 Company’s	 listing	 on	 the	 London	 Stock	 Exchange.	 Those	 fees	 totalled	 US$2,759,000	 (2004:	 US$nil)	 and	 were	 reimbursed	 to	 the	 Group	 by	 the	 selling	 shareholders.
In	 the	 income	 statement	 total	 staff	 costs,	 excluding	 share	 benefit	 charges,	 of	 US$41,936,000	 (2004:	 US$28,916,000)	 are	 included	 within	 the	 following	 expenditure	 categories:
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Operating	 expenses	 	 	 	 	 24,049	 17,157
Research	 and	 development	 expenses	 	 	 	 9,968	 5,991
Administrative	 expenses	 	 	 	 	 7,919	 5,768
	 	 	 	 41,936	 28,916
At	 31	 December	 2005	 the	 Company	 employed	 886	 (2004:	 689)	 staff.
47 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 6 Taxation
Corporate taxes
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Current	 tax	 	 	 	 	 2,497	 1,991
Deferred	 tax	 	 	 	 	 	 (361)	 –
Taxation expense	 	 	 	 	 2,136	 1,991
Analysis of current tax for the year
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Profit	 before	 taxation	 	 	 	 	 50,151	 43,089
Current tax at the effective tax rate for the year	 	 	 	 2,497	 1,991
Deferred	 tax	 (note	 11)	 	 	 	 (361)	 –
Taxation expense	 	 	  2,136	 1,991
Current	 tax	 is	 calculated	 with	 reference	 to	 the	 profit	 of	 the	 Company	 and	 its	 subsidiaries	 in	 their	 respective	 countries	 of	 operation:
Gibraltar	 –	 888	 and	 its	 Gibraltar	 registered	 subsidiaries	 are	 subject	 to	 the	 provisions	 of	 the	 Gibraltar	 Companies	 (Taxation	 and	 Concessions)	 Ordinance	 (the	 “CTCO”)	 as	 a	 tax-exempt	 Company.	 Subject	 to	 a	 change	 of	 ownership	 or	 activity	 of	 a	 tax-
exempt	 Company,	 the	 grandfathering	 of	 tax-exempt	 benefits	 in	 respect	 of	 existing	 tax-exempt	 companies	 will	 extend	 up	 to	 31	 December	 2010.	 Domestic	 corporate	 tax	 in	 Gibraltar	 is	 35%	 (2004:	 35%).
Israel	 –	 888’s	 subsidiaries	 in	 Israel	 have	 entered	 into	 separate	 transfer	 pricing	 agreements	 on	 an	 arm’s-length	 basis	 with	 	 the	 Israeli	 Income	 Tax	 Commissioner.	 Those	 agreements	 are	 effective	 until	 the	 end	 of	 2007	 in	 respect	 of	 the	 Israeli	 branch	 of	 Intersafe	 Global	 Limited	 and	 2010	 in	 respect	 of	 Random	 Logic	 Limited.	 Domestic	 corporate	 tax	 in	 Israel	 is	 34%	 (2004:	 35%).
UK	 –	 888’s	 subsidiary	 in	 the	 UK	 pays	 corporate	 tax	 in	 the	 UK	 at	 the	 applicable	 rate	 of	 30%	 (2004:	 30%).
7 Earnings per share
Basic earnings per share
Basic	 earnings	 per	 share	 has	 been	 calculated	 by	 dividing	 the	 Net	 Profit	 attributable	 to	 ordinary	 shareholders	 (profit	 for	 the	 year)	 by	 the	 weighted	 average	 number	 of	 shares	 in	 issue	 during	 the	 year.	 Diluted earnings per share
In	 accordance	 with	 IAS	 33,	 “Earnings	 per	 share”,	 the	 weighted	 average	 number	 of	 shares	 for	 diluted	 earnings	 per	 share	 takes	 into	 account	 all	 potentially	 dilutive	 shares	 and	 share	 options	 granted,	 which	 are	 not	 included	 in	 the	 number	 of	 shares	 for	 basic	 earnings	 per	 share.
	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December 31	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
	 	 	 	 	 	 (Adjusted)
Net	 Profit	 attributable	 to	 ordinary	 shareholders	 	 	 	 48,015	 41,098
Weighted	 average	 number	 of	 Ordinary	 Shares	 in	 issue
1
	 	 	 	 337 ,096,320 337 ,096,320
Basic	 earnings	 per	 share	 	 	 	 14.2¢	 12.2¢
Diluted	 earnings	 per	 share	 	 	 	 	 14.2¢	 12.2¢
1	 Comparative 	 weighted	 average	 number	 of	 Ordinary	 Shares	 in	 issue	 has	 been	 restated	 in	 order	 to	 reflect	 the	 share	 split	 that	 took	 place	 on	 14	 September	 2005.
Notes to the Consolidated Financial Statements
48 7 Earnings per share	 continued
Earnings per share excluding share benefit charges
Reconciliation	 of	 Net	 Profit	 to	 Net	 Profit	 excluding	 share	 benefit	 charges:
	 	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Net	 Profit	 attributable	 to	 ordinary	 shareholders	 	 	 	 48,015	 41,098
Share	 benefit	 charges	 	 	 	 	 17,234	 –
Net	 Profit	 excluding	 share	 benefit	 charges	 	 	 	 65,249	 41,098
Weighted	 average	 number	 of	 Ordinary	 Shares	 in	 issue
1
	 	 	  337 ,096,320 337 ,096,320
Basic	 earnings	 per	 share	 excluding	 share	 benefit	 charges	 	 	 	 19.3¢	 12.2¢
Weighted	 average	 number	 of	 dilutive	 Ordinary	 Shares	 	 	 	 338,419,476	 337 ,096,320
Diluted	 earnings	 per	 share	 excluding	 share	 benefit	 charges	 	 	 	 	 19.3¢	 12.2¢
1	 Comparative 	 weighted	 average	 number	 of	 Ordinary	 Shares	 in	 issue	 has	 been	 restated	 in	 order	 to	 reflect	 the	 share	 split	 that	 took	 place	 on	 14	 September	 2005.
8 Dividends
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Dividends	 paid	 	 	 	 	 63,100	 26,100
9 Intangible assets 
	 	 	 	 	 Domain
	 	 	 	 Goodwill	 names	 Total
	 	 	 	 US$’000	 US$’000	 US$’000
Cost
At	 1	 January	 2005	 	 	 	 –	 –	 –
Additions	 	 	 	 452	 400	 852
At 31 December 2005	 	 	 	 452	 400 852
Amortisation and impairment
At	 1	 January	 2005	 	 	 	 –	 –	 –
Amortisation	 charge	 for	 the	 year	 	 	 	 –	 (20)	 (20)
Impairment	 charge	 for	 the	 year	 	 	 	 (452)	 (380)	 (832)
At 31 December 2005	 	 	 	 (452)	 (400) (852)
Amortised cost
At 31 December 2005	 	 	 	 –	 – –
At	 31	 December	 2004	 	 	 	 –	 –	 –
Goodwill	 relates	 to	 the	 business	 combination	 detailed	 in	 note	 18.
49 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 10 Property, plant and equipment
	 	 	 Office
	 	 	 furniture 	 and	 Motor	 Leasehold
	 	 IT 	 equipment	 equipment	 vehicles	 improvements	 Total
	 	 US$’000	 US$’000	 US$’000	 US$’000	 US$’000
Cost
At	 1	 January	 2005	 	 8,194	 1,375	 249	 4,765	 14,583
Additions	 	 2,420	 702	 272	 437	 3,831
Disposals	 	 –	 –	 (62)	 –	 (62)
At 31 December 2005  10,614 2,077 459 5,202 18,352
Accumulated depreciation
At	 1	 January	 2005	 	 5,946	 288	 34	 1,073	 7,341
Charge	 for	 the	 year	 	 1,630	 330	 57	 683	 2,700
Disposals	 	 –	 –	 (30)	 –	 (30)
At 31 December 2005  7,576 618 61 1,756 10,011
Depreciated cost
At 31 December 2005  3,038 1,459 398 3,446 8,341
At	 31	 December	 2004	 	 2,248	 1,087	 215	 3,692	 7,242
 Prior year amounts
	 Depreciated	 cost	 at	 1	 January	 2004	 	 3,123	 1,102	 54	 3,932	 8,211
	 Additions	 in	 2004	 	 1,058	 92	 176	 229	 1,555
	 Disposals	 in	 2004	 	 (97)	 –	 –	 –	 (97)
	 Depreciation	 in	 2004	 	 (1,836)	 (107)	 (15)	 (469)	 (2,427)
	 Depreciated	 cost	 at	 31	 December	 2004	 	 2,248	 1,087	 215	 3,692	 7,242
11 Deferred taxes
Deferred	 income	 taxes	 reflect	 the	 net	 tax	 effects	 of	 temporary	 differences	 between	 the	 carrying	 amounts	 of	 assets	 and	 liabilities	 for	 financial	 reporting	 purposes	 and	 the	 amounts	 used	 for	 income	 tax	 purposes.	 The	 Group’s	 deferred	 tax	 assets	 resulting	 from	 temporary	 differences	 are	 as	 follows:
     31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Accrued	 severance	 pay	 	 	 	 	 195	 –
Provision	 for	 vacation	 	 	 	 	 154	 –
Provision	 for	 convalescence	 	 	 	 	 12	 –
	 	 	 	 	 361	 –
12 Cash and cash equivalents
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Cash	 and	 cash	 equivalents	 	 	 	 	 56,146	 36,574
Restricted	 cash	 	 	 	 6,056	 3,761
	 	 	 	 62,202	 40,335
Restricted	 cash	 primarily	 relates	 to	 deposits	 held	 by	 banks	 for	 guarantees. 
Notes to the Consolidated Financial Statements
50 13 Trade and other receivables
     31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Trade	 receivables	 	 	 	 	 12,535	 12,605
Other	 receivables	 and	 prepayments	 	 	 	 	 2,478	 2,620
	 	 	 	 	 15,013 15,225
The	 carrying	 value	 of	 trade	 and	 other	 receivables	 approximates	 to	 their	 fair	 value.
14 Share capital
Share	 capital	 comprises	 the	 following:
	 Authorised
	 	 	 31 December	 31 	 December	 31 December	 31 	 December
	 	 	 2005	 2004	 2005	 2004
	 	 	 Number	 Number	 US$’000	 US$’000
Ordinary	 Shares	 of	 US$1	 each	 	 	 3,101,000	 –	 3,101	 –
Effect	 of	 share	 split	 	 	 (3,101,000)	 –	 (3,101)	 –
Ordinary	 “A”	 shares	 of	 US$1	 each	 	 	 –	 3,100,000	 –	 3,100
Redeemable	 preference	 “B”	 shares	 of	 US$1	 each	 	 	 –	 1,000	 –	 1
Ordinary	 Shares	 of	 £0.005	 each	 	 426,387,500	 –	 3,880	 –
	 	 	426,387,500	 3,101,000	 3,880	 3,101
	 Allotted,	 called	 up	 and	 fully	 paid
	 	 	 31 December	 31 	 December	 31 December	 31 	 December
	 	 	 2005	 2004	 2005	 2004
	 	 	 Number	 Number	 US$’000	 US$’000
Ordinary	 Shares	 of	 US$1	 each	 	 	 3,064,512	 –	 3,065	 –
Effect	 of	 share	 split	 	 	 (3,064,512)	 –	 (3,065)	 –
Ordinary	 “A”	 shares	 of	 US$1	 each	 	 	 –	 3,064,512	 –	 3,065
Redeemable	 preference	 “B”	 shares	 of	 US$1	 each	 	 	 –	 1,000	 –	 1
Ordinary	 Shares	 of	 £0.005	 each	 	 337,096,320	 –	 3,068	 –
	 	 337,096,320 3,065,512	 3,068	 3,066
On	 10	 February	 2005	 the	 Company	 passed	 a	 resolution	 to	 reclassify	 the	 1,000	 US$1	 preference	 “B”	 shares	 in	 issue	 into	 100,000	 US$0.01	 preference	 “B”	 shares.
On	 31	 March	 2005	 the	 100,000	 US$0.01	 preference	 “B”	 shares	 in	 issue	 were	 redeemed	 in	 full.
The	 100,000	 authorised	 preference	 “B”	 shares	 were	 subsequently	 converted	 into	 and	 reclassified	 as	 1,000	 	 US$1	 Ordinary	 Shares.
The	 3,100,000	 authorised	 Ordinary	 “A”	 Shares	 were	 also	 reclassified	 into	 3,100,000	 US$1	 Ordinary	 Shares.
On	 14	 September	 2005	 a	 share	 split	 of	 110	 to	 1	 was	 effected.	 888’s	 share	 capital	 was	 also	 re-denominated	 from	 	 the	 US	 dollar	 to	 pounds	 sterling	 at	 a	 rate	 of	 US$1.82/£1.	 In	 addition,	 the	 authorised	 share	 capital	 was	 increased	 	 by	 the	 creation	 of	 85,277,500	 Ordinary	 Shares	 of	 £0.005	 each.	 The	 combination	 of	 these	 events	 resulted	 in	 888	 	 having	 an	 authorised	 share	 capital	 of	 426,387,500	 Ordinary	 Shares	 of	 £0.005	 each	 (£2.1	 million	 nominal	 value)	 	 and	 an	 issued	 share	 capital	 of	 337,096,320	 Ordinary	 Shares	 of	 £0.005	 each	 (£1.7	 million	 nominal	 value).
	 51 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 15 Trade and other payables
     31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Trade	 payables	 	 	 	 4,550	 3,320
Corporate	 taxes	 	 	 	 	 766 1,429
Other	 payables	 and	 accrued	 expenses	 	 	 	 	 20,277	 10,597
	 	 	 	 25,593	 15,346
The	 carrying	 value	 of	 trade	 and	 other	 payables	 approximates	 to	 their	 fair	 value.
16 Investments in subsidiaries
	 Percentage of	 	 Percentage 	 of	 	  equity interest	 equity 	 interest
	 Country	 of	 2005	 2004
Name	 incorporation	 %	 %	 Nature	 of	 business
Intersafe	 Global	 Limited	 Gibraltar	 100	 100	 Payment	 processor
Cassava	 Enterprises	 Limited	 Antigua	 100	 100	 Member	 call	 centre	 operator
Virtual	 Services	 Limited	 BVI	 100	 100	 Advertising
Virtual	 Holdings	 Management	 Services	 (Gibraltar)	 Limited	 Gibraltar	 100	 100	 Operates 	 Group	 headquarters
Intersafe	 Global	 (Europe)	 Limited	 Gibraltar	 100	 100	 Payment	 processor
Cassava	 Enterprises	 (Gibraltar)	 Limited	 Gibraltar	 100	 100	 Gaming	 web	 site	 operator
Virtual	 Marketing	 Services	 (UK)	 Limited	 UK	 100	 100	 Advertising
Cassava	 Sports	 Limited	 Gibraltar	 100	 100	 Domain 	 site	 owner	 through	 which	 	 	 	 	 	 which	 a	 third	 party	 operates	 	 	 	 	 	 a	 betting	 exchange
Active	 Media	 Limited	 BVI	 100	 100	 Member 	 call	 centre	 employer
Virtual	 Marketing	 Services	 (Gibraltar)	 Limited	 UK	 100	 100	 Marketing	 acquisition
Dixie	 Operation	 Limited	 Antigua	 100	 100	 Member	 call	 centre	 operator
Random	 Logic	 Limited	 Israel	 100	 100	 Research, 	 development	 and	 marketing	 17 Share-based payment
Prior	 to	 flotation,	 the	 Company	 adopted	 two	 equity-settled	 employee	 share	 incentive	 plans	 –	 the	 888	 All-Employee	 Share	 Share	 Plan	 and	 the	 Long	 Term	 Incentive	 Plan.	 Awards	 have	 been	 granted	 under	 the	 888	 All-Employee	 Share	 Plan	 conditional	 upon	 flotation.	 The	 888	 All-Employee	 Share	 Plan	 is	 open	 to	 all	 employees	 and	 Executive	 Directors	 of	 the	 Group	 who	 are	 not	 within	 six	 months	 of	 their	 normal	 retirement	 age	 at	 the	 discretion	 of	 the	 Remuneration	 Committee.	 Awards	 under	 this	 scheme	 will	 vest	 in	 instalments	 over	 a	 fixed	 period	 of	 up	 to	 four	 years.
It	 is	 intended	 that	 the	 Long	 Term	 Incentive	 Plan	 will	 be	 open	 to	 all	 employees	 and	 Executive	 Directors	 of	 the	 Group	 at	 the	 discretion	 of	 the	 Remuneration	 Committee.	 Awards	 under	 the	 Long	 Term	 Incentive	 Plan	 will	 be	 subject	 to	 performance	 conditions	 imposed	 by	 the	 Remuneration	 Committee	 at	 the	 date	 of	 grant.	 As	 at	 31	 December	 2005	 no	 awards	 were	 	 made	 under	 the	 Long	 Term	 Incentive	 Plan.	 Notes to the Consolidated Financial Statements
52 17 Share-based payment	 continued
Details	 of	 Shares	 and	 Share	 Options	 granted	 as	 part	 of	 the	 888	 All-Employee	 Share	 Plan	 and	 shares	 granted	 vesting	 immediately	 on	 IPO	 and	 thereafter:
Share options granted
	 	 	 	 31 December 31	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 Number	 Number
Outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 	 	 –	 –
Market	 value	 options	 granted	 during	 the	 year	 	 	 	 3,578,287	 –
Outstanding	 at	 the	 end	 of	 the	 year	 	 	 	 3,578,287	 –
Weighted	 average	 exercise	 price	 	 	 	 	 £1.75	 –
Shares granted
	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 Number	 Number
Outstanding	 at	 the	 beginning	 of	 the	 year	 	 	 	 	 –	 –
Shares	 granted	 –	 future	 vesting	 	 	 	 	 5,292,622	 –
Shares	 granted	 –	 immediate	 vesting	 	 	 	 5,078,357	 –
Shares	 vested	 during	 the	 year	 	 	 	 (5,078,357)	 –
Outstanding	 at	 the	 end	 of	 the	 year	 	 	 	 5,292,622	 –
Of	 the	 total	 number	 of	 options	 outstanding	 at	 the	 end	 of	 the	 year	 none	 had	 vested	 and	 were	 exercisable	 at	 the	 end	 of	 	 the	 year.
The	 following	 information	 is	 relevant	 in	 the	 determination	 of	 the	 fair	 value	 of	 options	 granted	 during	 the	 year	 under	 the	 equity-settled	 888	 All-Employee	 Share	 Plan:
Valuation information
	 	 	 	 	 2005	 2004
Option	 pricing	 model	 used	 	 	 	 	 Binomial	 –
Share	 price	 at	 grant	 date	 	 	 	 	 £1.75	 –
Weighted	 exercise	 price	 	 	 	 	 £1.75	 –
Exercise	 period	 of	 the	 market	 value	 options	 is	 from	 vesting	 until	 expiry	 of	 ten	 years	 after	 grant	 date.
In	 accordance	 with	 International	 Financial	 Reporting	 Standards	 a	 charge	 to	 the	 income	 statement	 in	 respect	 of	 any	 shares	 or	 options	 granted	 under	 the	 above	 schemes	 will	 be	 recognised	 and	 spread	 over	 the	 vesting	 period	 of	 the	 shares	 or	 options	 based	 on	 the	 fair	 value	 of	 the	 shares	 or	 options	 at	 the	 date	 of	 grant,	 adjusted	 for	 changes	 in	 vesting	 conditions	 at	 each	 balance	 sheet	 date.	 This	 charge	 has	 no	 cash	 impact.
Share benefit charges
	 	 	 	 	 Year ended	 Year 	 ended
	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Charges	 in	 respect	 of	 shares	 granted	 to	 employees	 on	 IPO	 	 	 	 	 15,087	 –
Charges	 in	 respect	 of	 share	 and	 option	 awards	 	 	 	 	 2,147	 –
Charge	 for	 the	 year	 	 	 	 	 17,234	 –
53 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 17 Share-based payment	 continued
The	 source	 of	 the	 shares	 granted	 to	 employees	 on	 IPO	 was	 the	 shareholders	 immediately	 before	 the	 IPO	 rather	 than	 the	 Company.	 An	 amount	 equalling	 the	 charge	 in	 relation	 to	 these	 shares	 has	 therefore	 been	 transferred	 from	 the	 share	 benefit	 reserve	 to	 accumulated	 profit.	 The	 Group	 did	 not	 enter	 into	 any	 share-based	 payment	 transactions	 with	 parties	 other	 than	 employees	 during	 the	 current	 	 or	 previous	 period.
18 Business combination 
On	 20	 December	 2005,	 the	 Group	 took	 responsibility	 for	 the	 management	 of	 ACTeCASH	 Limited,	 a	 company	 with	 common	 shareholders.	 From	 this	 date	 ACTeCASH	 was	 managed	 as	 a	 unit	 of	 the	 Group	 and	 utilised	 staff	 employed	 by	 the	 Group.	 In	 accordance	 with	 IAS	 27	 “Consolidated	 and	 Separate	 Financial	 Statements”,	 the	 Group	 is	 deemed	 to	 have	 control	 of	 ACTeCASH	 by	 virtue	 of	 the	 fact	 it	 has	 the	 power	 to	 govern	 the	 financial	 and	 operating	 policies	 of	 this	 company	 and	 derives	 economic	 benefit	 from	 doing	 so.	 As	 such	 ACTeCASH	 has	 been	 consolidated	 as	 part	 of	 the	 Group.	 The	 principal	 activity	 of	 ACTeCASH	 Limited	 is	 operating	 an	 e-wallet	 service	 as	 a	 company	 registered	 in	 Gibraltar.	 There	 has	 been	 minimal	 activity	 since	 20	 December	 2005.
Details	 of	 the	 fair	 value	 of	 the	 identifiable	 assets	 and	 liabilities	 acquired	 are	 as	 follows:
	 	 	 	 	 	 US$’000
Cash	 at	 bank	 	 	 	 	 	 263
Trade	 receivable	 	 	 	 	 	 509
Balance	 with	 related	 party	 	 	 	 	 	 (1,171)
Creditors	 	 	 	 	 	 (53)
Total	 	 	 	 	 	 (452)
No	 purchase	 consideration	 was	 paid	 in	 respect	 of	 ACTeCASH	 Limited.
Therefore	 goodwill	 of	 US$452,000	 arose	 on	 the	 transaction.	 This	 goodwill	 has	 been	 fully	 impaired	 as	 of	 31	 December	 2005.
19 Related party transactions
At	 31	 December	 2005,	 the	 Group	 was	 owed	 US$1,649,000	 by	 companies	 controlled	 by	 shareholders	 of	 the	 Group	 and	 	 by	 its	 shareholders	 (2004:	 US$2,245,000),	 of	 which	 US$1,633,000	 (2004:	 US$nil)	 is	 due	 from	 shareholders	 relating	 to	 flotation	 expenses.	 At	 this	 date	 the	 Group	 owed	 to	 its	 shareholders	 US$318,000	 (2004:	 US$381,000).
During	 the	 year	 the	 Group	 paid	 US$198,768	 (2004:	 US$69,000)	 in	 respect	 of	 rent	 and	 office	 expenses	 to	 Burford	 Holdings	 Limited	 and	 Cabot	 Property	 Partnership,	 companies	 of	 which	 Mr	 John	 Anderson	 is	 a	 Director.	 At	 31	 December	 2005	 the	 amount	 owed	 to	 Burford	 Holdings	 Limited	 and	 Cabot	 Property	 Partnership	 was	 US$nil	 (2004:	 US$nil).
Remuneration	 paid	 to	 the	 directors	 in	 the	 year	 totalled	 US$3,176,000	 (2004:	 US$1,858,000).
Notes to the Consolidated Financial Statements
54 20 Commitments and contingencies
Lease commitments
Future	 minimum	 lease	 commitments	 under	 property	 operating	 leases	 for	 the	 year	 ended	 31	 December	 2005,	 are	 as	 follows:
	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
Leases	 expiring	 within	 	 	 	 	 	 US$’000	 US$’000
One	 year	 	 	 	 	 1,985	 1,386
One	 to	 five	 years	 	 	 	 	 2,617	 1,563
	 	 	 	 	 4,602	 2,949
The	 amount	 paid	 in	 the	 year	 was	 US$2,052,463	 (2004:	 US$1,419,000).
Lease	 commitments	 on	 the	 Group’s	 property	 are	 shown	 to	 the	 date	 of	 the	 first	 break	 clause.
21 Financial risk management objectives and policies
The	 Group	 is	 exposed	 through	 its	 operations	 to	 currencies,	 interest	 rate	 and	 credit	 risk.	 Policy	 for	 managing	 these	 risks	 is	 set	 by	 the	 Board	 following	 recommendations	 from	 the	 Chief	 Financial	 Officer.	 Certain	 risks	 are	 managed	 centrally,	 while	 others	 are	 managed	 locally	 following	 guidelines	 communicated	 from	 the	 centre.	 The	 policy	 for	 each	 of	 these	 risks	 is	 detailed	 below.
Currency risk
The	 Group’s	 overall	 financial	 risk	 arising	 from	 exchange	 rate	 fluctuations	 to	 the	 Group	 is	 minimal	 as	 receipts	 and	 the	 majority	 of	 payments	 are	 transacted	 in	 US	 dollars.
Interest rate risk
The	 Group’s	 exposure	 to	 interest	 rate	 risk	 is	 limited	 to	 the	 interest	 bearing	 deposits	 in	 which	 the	 Group	 invests	 surplus	 funds.	 Downside	 interest	 rate	 risk	 is	 minimal	 as	 the	 Group	 has	 no	 borrowings.	 Management	 monitors	 liquidity	 to	 ensure	 	 that	 sufficient	 liquid	 resources	 are	 available	 to	 the	 Group.
Credit risk
The	 Group’s	 credit	 risk	 is	 primarily	 attributable	 to	 receivables	 from	 payment	 service	 providers.
22 Events subsequent to the balance sheet date
On	 7	 March	 2006,	 a	 Group	 company,	 Random	 Logic	 Limited,	 signed	 a	 new	 operating	 lease	 agreement	 for	 its	 rental	 facilities	 	 for	 a	 period	 of	 10	 years.		 As	 a	 result,	 Random	 Logic’s	 previous	 operating	 lease	 agreements	 will	 be	 terminated.
55 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 	 	 	 	 	 31 December	 31 	 December
	 	 	 	 	 2005	 2004
	 	 	 	 Note	 US$’000	 US$’000
Assets	 	 	 Non-current assets	 	 	 Investments	 in	 subsidiaries	 	 	 	 2	 2,130	 2,130
Current assets	 	 	 Trade	 and	 other	 receivables	 	 	 	 3	 40,466	 22,846
Cash	 and	 cash	 equivalents	 	 	 	 4	 36,531	 18,100
	 	 	 	 	 76,997	 40,946
Total assets	 	 	 	 	 79,127	 43,076
Equity and Liabilities
Equity 	 	 	 Share	 capital	 	 	 	 5	 3,068	 3,066
Share	 benefit	 reserve	 	 	 	 6	 2,147	 –
Retained	 earnings	 	 	 	 	 21,900	 7,357
Total equity attributable to equity holders of the parent	 	 	 	 	 27,115	 10,423
Liabilities	 	 	 Current liabilities	 	 	 Trade	 and	 other	 payables	 	 	 	 7	 51,748	 32,383
Amounts	 due	 to	 shareholders	 	 	 	 	 264	 270
Total liabilities	 	 	 	 	 52,012	 32,653
Total equity and liabilities	 	 	 	 	 79,127	 43,076
Approved	 by	 the	 Board	 and	 authorised	 for	 issue	 on	 16	 March	 2006.
John Anderson   Aviad Kobrine
Chief	 Executive	 Officer	 	 Chief 	 Financial	 Officer
The	 notes	 on	 pages	 59	 to	 60	 form	 part	 of	 these	 financial	 statements.
Company Balance Sheet
at	 31	 December	 2005
56 	 	 	 	 Share
	 	 	 Share	 benefit	 Accumulated
	 	 	 capital	 reserve	 profit	 Total
	 	 	 US$’000	 US$’000	 US$’000	 US$’000
Balance at 1 January 2004	 	 	 15,443	 –	 7,212	 22,655
Net	 Profit	 for	 the	 year	 	 	 –	 –	 26,245	 26,245
Dividend	 paid	 	 	 –	 –	 (26,100)	 (26,100)
Capital	 reduction	 	 	 (12,442)	 –	 –	 (12,442)
Share	 capital	 issued	 	 	 65	 –	 –	 65
Balance at 1 January 2005	 	 	 3,066	 –	 7,357	 10,423
Net	 Profit	 for	 the	 year	 	 	 – – 62,556 62,556
Dividend	 paid	 	 	 – – (63,100) (63,100)
Redemption	 of	 preference	 share	 capital	 	 	 (1) – – (1)
Redenomination	 translation	 effect	 	 	 3 – – 3
Share	 benefit	 charges	 	 	 – 17,234 – 17,234
Transfer	 of	 shares	 granted	 on	 IPO	 	 	 – (15,087) 15,087 –
Balance at 31 December 2005   3,068 2,147 21,900 27,115
The	 notes	 on	 pages	 59	 to	 60	 form	 part	 of	 these	 financial	 statements.
Company Statement of Changes in Equity
for	 the	 year	 ended	 31	 December	 2005
57 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 	 	 	 Year ended Year ended	 Year 	 ended	 Year 	 ended
	 	 31 December 31 December	 31 	 December	 31 	 December
	 	 2005 2005	 2004	 2004
	 	 	 US$’000 US$’000	 US$’000	 US$’000
Cash flows from operating activities	 	 	 	 	 (Loss)/Profit	 before	 income	 tax	 	 	 (544)	 	 145
Adjustments for	 	 	 	 	 Interest	 received	 	 	 (751)	 	 (145)
	 Translation	 effect	 of	 redenomination	 of	 share	 capital	 	 	 3 	 –	 	 Share	 benefit	 charges	 	 	 17,234 	 –	 	 (Increase)	 in	 amounts	 owed	 from	 subsidiaries	 	 	 (17,243) 	 (3,468)	 	 (Increase)	 in	 other	 accounts	 receivable	 	 (377) 	 –	 	 Increase	 in	 trade	 payables	 	 555 	 –	 	 Increase	 in	 amounts	 owed	 to	 subsidiaries	 	 	 14,565 	 32,360	 	 Increase/(decrease)	 in	 other	 accounts	 payable	 	 	 4,239 	 (244)	 	 Increase	 in	 amounts	 due	 from	 shareholders	 	 	 – 	 589	 Cash generated from operations	 	 	 18,976	 	 29,237
Net cash generated from operating activities	 	 	 17,681	 	 29,237
Cash flows from investing activities	 	 	 	 	 Acquisition	 of	 Random	 Logic	 Limited	 net	 of	 cash	 acquired	 	 	 – 	 (937)	 	 Interest	 received	 	 	 751 	 145	 	 Dividends	 received	 	 	 63,100 	 26,100	 Net cash used in investing activities	 	 	 63,851	 	 25,308
Cash flows from financing activities	 	 	 	 	 Reduction	 in	 share	 capital	 	 	 (1) 	 (12,442)	 	 Dividends	 paid	 	 (63,100) 	 (26,100)	 Net cash used in financing activities	 	 	 (63,101)	 	 (38,542)
Net increase in cash and cash equivalents	 	 	 18,431	 	 16,003
Cash	 and	 cash	 equivalents	 at	 the	 beginning	 of	 the	 year	 	 	 18,100 	 2,097
Cash and cash equivalents at the end of the year	 	 	 36,531	 	 18,100
The	 notes	 on	 pages	 59	 to	 60	 form	 part	 of	 these	 financial	 statements.
Company Statement of Cash Flows
for	 the	 year	 ended	 31	 December	 2005
58 1 General information and accounting policies
A	 description	 of	 the	 Company,	 its	 activities	 and	 definitions	 are	 included	 in	 note	 1	 to	 the	 consolidated	 financial	 statements.
The	 Company	 has	 applied	 accounting	 policies	 identical	 to	 the	 Group’s	 accounting	 policies	 listed	 in	 note	 2	 to	 the	 consolidated	 financial	 statements	 other	 than	 in	 relation	 to	 investments	 in	 its	 subsidiaries	 which	 are	 held	 at	 cost	 less	 	 any	 impairment	 provision	 required.
	 	 Under	 Section	 10(2)	 of	 the	 Gibraltar	 (Consolidated	 Accounts)	 Ordinance	 1999,	 the	 Company	 is	 exempt	 from	 the	 requirement	 to	 present	 its	 own	 income	 statement.
2 Investments in subsidiaries
The	 Company’s	 subsidiaries	 are	 listed	 in	 note	 16	 to	 the	 consolidated	 financial	 statements	 and	 are	 held	 at	 cost	 less	 provision	 for	 any	 impairment.
3 Trade and other receivables
	 	 	 	 	 31 December 31	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Amounts	 due	 from	 subsidiaries	 	 	 	 	 40,089	 22,846
Other	 receivables	 and	 prepayments	 	 	 	 	 377	 –
	 	 	 	 	 40,466	 22,846
4 Cash and cash equivalents
	 	 	 	 	 31 December 31	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Cash	 and	 cash	 equivalents	 	 	 	 33,497	 17,450
Restricted	 cash	 	 	 	 	 3,034	 650
	 	 	 	 	 36,531	 18,100
Restricted	 cash	 primarily	 relates	 to	 deposits	 held	 by	 banks	 for	 guarantees.
Notes to the Company Financial Statements
59 888 Holdings Public Limited Company	 Annual	 Report	 &	 Accounts	 2005 5 Share capital
The	 disclosures	 in	 note	 14	 to	 the	 consolidated	 financial	 statements	 are	 identical	 for	 the	 Company.
6 Share-based payment
The	 disclosures	 in	 note	 17	 to	 the	 consolidated	 financial	 statements	 are	 identical	 for	 the	 Company.
7 Trade and other payables
	 	 	 	 	 31 December 31	 December
	 	 	 	 	 2005	 2004
	 	 	 	 	 US$’000	 US$’000
Trade	 payables	 	 	 	 555	 –
Amounts	 due	 to	 subsidiaries	 	 	 	 46,926	 32,361
Other	 payables	 and	 accrued	 expenses	 	 	 	 4,267	 22
	 	 	 	 51,748	 32,383
The	 carrying	 value	 of	 trade	 and	 other	 payables	 approximates	 to	 their	 fair	 value.
8 Financial risk management objectives and policies
The	 Company’s	 financial	 risk	 management	 objectives	 and	 policies	 are	 identical	 to	 those	 of	 the	 Group	 as	 disclosed	 in	 	 note	 21	 to	 the	 consolidated	 financial	 statements.
Notes to the Company Financial Statements
60 THE WORLD’S NO.1 ONLINE  
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industry, 888 has developed a strong brand, scale and member trust.
The business is based on its fully integrated proprietary operating 
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management and diversified payment processing systems. 888 benefits 
from industry leading multi-channel member acquisition capabilities.
888.com is our umbrella brand. We operate brands 
across a range of online gaming websites, such 
as 888.com, Casino-on-Net.com, PacificPoker.com 
and ReefClubCasino.com. The main products offered 
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games such as blackjack, roulette and craps as well 
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poker tournaments.
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Net Gaming Revenue from outside the USA. 888 
provides members with a trustworthy and fair 
gaming environment.
Group Websites
A range of shareholder information is available in 
the Investor Relations area of the Group’s website, 
www.888holdingsplc.com, including:
Latest information on the Group’s share price
Information on the Group’s financial performance 
News and events
The following websites can also be accessed through 
the Group’s main web portal 888.com.
Casino
888’s Casino games are offered through its 
Casino-on-Net and Reef Club Casino offerings.
www.Casino-on-Net.com
www.ReefClubCasino.com
Poker
888’s Poker offering is through Pacific Poker.
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Betmate
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only, including sporting and non-sporting betting.
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888.tv
A portal for skill games allowing members to download 
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888.info
Allows members to practise their gaming skills for fun 
through a number of key Casino and Poker games. 
www.888.info
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Shareholder Information
Financial Advisers
HSBC Bank plc
8 Canada Square, London E14 5HQ
Principal Bankers
The Royal Bank of Scotland plc
280 Bishopsgate, London EC2M 4RB
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street, London EC4Y 1HS
Hassans
57/63 Line Wall Road
Gibraltar
Auditors
BDO Stoy Hayward LLP
Chartered Accountants
8 Baker Street
London W1U 3LL
BDO Fidecs Chartered 
Accountants Limited
Montagu Pavilion
8-10 Queensway
Gibraltar
Contents
01 Highlights
02 888 at a Glance
04 Marketing
06 Technology
08 People
10 Chairman’s Statement
12 Chief Executive’s Review
16 Financial Review
20 Board of Directors
22 Responsible Gaming
23 Regulatory and Compliance Review
24 Corporate Governance
29 Remuneration Report
35 Directors’ Report 
37 Independent Auditors’ Report
38 Consolidated Income Statement
39 Consolidated Balance Sheet
40 Consolidated Statement of Changes in Equity
41 Consolidated Statement of Cash Flows
42 Notes to the Consolidated Financial Statements
56 Company Balance Sheet
57 Company Statement of Changes in Equity
58 Company Statement of Cash Flows
59 Notes to the Company Financial Statements
IBC Shareholder Information
Incorporated in Gibraltar with registered 
number 90099
Shareholder Services
All enquiries relating to Ordinary Shares, 
Depository Interests, dividends and 
changes of address should be directed 
to the Group’s Transfer Agent:
Capita Registrars
The Registry, 34 Beckenham Road
Beckenham, Kent BR3 4TU 
Tel: 0870 162 3100
www.capitaregistrars.com
Further Information
For further information please contact:
Company Secretary
888 Holdings Public Limited Company
Suite 601/701
Europort, Europort Road
Gibraltar
info@888holdingsplc.com HOLDINGS
PUBLIC LIMITED COMPANY
HOLDINGS
PUBLIC LIMITED COMPANY
THE WORLD’S NO.1 ONLINE CASINO AND POKER ROOM
Annual Report & Accounts 2005
Suite 601/701 Europort
Europort Road
Gibraltar
T: +350 49800
F: +350 48280
E: info@888holdingsplc.com
www.888holdingsplc.com
888 Holdings Public Limited Company Annual Report & Accounts 2005
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