MDI Expands Business Into New Mexico With Lottery Contract for Harley-Davidson Instant Game

    HARTFORD, Conn.--March 27, 2001--The New Mexico Lottery has signed a contract with MDI Entertainment, Inc. (NASDAQ SC: LTRY) for a Harley-Davidson instant ticket promotion scheduled to launch in spring 2001. It will be the 29th Harley-Davidson lottery promotion conducted through the company in North America and the first business for MDI with the New Mexico Lottery Authority.
    Eleven Harley-Davidson(R) Sportster 1200 Custom(TM) motorcycles will be offered as prizes for lucky New Mexico Lottery players. In addition, more than 1,300 Harley-Davidson(R) official logo merchandise items will go to lucky winners in a second chance bonus contest.
    "The New Mexico Lottery receives a lot of requests from players for different types of games," said Lottery Authority CEO Tom Shaheen. "New Mexico has a large population of motorcycle enthusiasts, so we feel this will be an ideal fit. This is an exciting and fun way to answer our players' requests, and at the same time help raise more money for our beneficiaries: New Mexico education."
    MDI President and CEO Steve Saferin welcomed the New Mexico Lottery to MDI's growing customer base. "Harley-Davidson motorcycles and merchandise enjoy rapidly growing popularity, and the New Mexico Lottery has created a way to market its product and increase Lottery revenue by the strategic use of the brand and the merchandise in this promotion," he said.
    The New Mexico Harley-Davidson ticket will be priced at $2, and will be printed by Oberthur Gaming Technology. The Lottery anticipates generating approximately $2 million in gross revenue. All profits from the New Mexico Lottery are statutorily earmarked for public education. By the end of March, the Lottery will have turned over more than $109.4 million to the State of New Mexico.
    MDI owns the exclusive license to develop lottery games and promotions based on the incomparable Harley-Davidson(R) motorcycle brand. The New Mexico Lottery is one of at least seven US lotteries scheduled to introduce Harley-Davidson scratch games during calendar 2001, according to Mr. Saferin. The Florida Lottery generated record sales when it introduced its first Harley-Davidson(R) game in February.
    "We estimate that more Harley-Davidson lottery tickets will be printed in 2001 than in any previous year of MDI's license with the Harley-Davidson Motor Company," Mr. Saferin said. "Initial order quantities for Harley games planned in this calendar year total more than 45 million tickets," he added.
    Popular Lottery scratch games and "turn-key" promotions designed around Wheel of Fortune(R), Jeopardy!(R) Elvis Presley(R), Harley-Davidson(R) and many other brands and cultural icons are offered to government sponsored lotteries through MDI's exclusive licensing programs. Motorcycles, dream trips, game show auditions, merchandise packages and other exotic prize giveaways can be customized for a state, region or time of year, adding value to the games. MDI revolutionized the lottery industry with its introduction of second-chance merchandise prizes.

    MDI's wide array of services include game and ticket design, merchandise prize fulfillment, management of second-chance draws, a fully-staffed customer service line, coordination of winner travel and accommodations, advertising and marketing support, consumer research and Internet marketing and advertising. MDI has entered into a strategic business agreement with Scientific Games International, a wholly owned subsidiary of Autotote Corporation (AMEX:TTE). Scientific Games is one of the world's largest suppliers of lottery games. And MDI also has joined forces with eLOT, Inc. , which provides Internet-based services to Lotteries. Both partners have acquired interests in MDI.

    MDI's current lottery promotions include scratch games featuring other properties such as Harley-Davidson(R), Wheel of Fortune(R), Jeopardy!(R), Elvis Presley(R) and Graceland(R), Betty Boop(TM), Twilight Zone(TM), Louisville Slugger(R), TNN(R), CMT(R), Hummer(R), Ray Charles(R), The Hollywood Sign(TM) and Hollywood Walk of Fame(TM), Emmett Kelly, Jr.(R), Pink Panther(TM), The Outer Limits(TM), Heroes of Space(TM), Michael Buffer's Let's Get Ready To Rumble(R), Dick Clark's American Bandstand(R), Times Square 2002(TM), SPAM(R) and auto race drivers Dale Earnhardt(R), Dale Earnhardt, Jr.(R), Mark Martin, Matt Kenseth, Jeff Burton and Bill Elliott.

    The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by MDI) contains statements that are forward-looking, such as statements relating to the future anticipated direction of the lottery industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales and potential contracts. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of MDI. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, domestic and global economic conditions, changes in federal or state tax laws and market competition factors.