MATTHEWS, North Carolina - 9 March, 2010: PokerTek, Inc. (NASDAQ: PTEK) today reported financial results for the fourth quarter and year ended December 31, 2009.

Chief Executive Officer and Chief Financial Officer Mark Roberson commented, “During the second half of 2009, we focused on turning the business around strategically and financially – reducing operating expenses, strengthening our balance sheet and implementing new, more effective sales and marketing strategies that produce recurring revenues for PokerTek.

“We cut our quarterly operating expenses almost in half and began focusing on more profitable markets with less competition. As a result, our EBITDAS improved from a run rate of just under ($700,000) per quarter for the first two quarters of 2009 to ($111,242) in the fourth quarter, nearing breakeven.”

Mr. Roberson continued, “In the past, our sales and marketing strategy was focused primarily on converting manual poker rooms in highly competitive traditional markets. We changed our focus to those markets with limited competition, including international and emerging markets, which offer greater earnings potential for PokerTek.

“As announced in January, we are now distributing PokerPro® on a direct basis worldwide. This will enable us to increase market share in attractive target markets in Europe. Our expansion in Mexico, which began in earnest late in the fourth quarter, is continuing and we recently announced the installation of our 40th table in Mexico.

“With operating expenses stabilized at historically low levels, a substantial inventory position and a focused sales strategy, I expect our financial performance to continue to improve during 2010.”

Financial Summary

Revenue comparisons for 2009 reflect our transition to a stronger mix of recurring gaming revenues and less dependence on onetime product sales in both the gaming and amusement markets. While those one-time product sales generated a larger top line in prior periods, recurring revenues generally provide increased margins and more predictability for the future. The decline in operating expenses is primarily attributable to cost reduction initiatives implemented during the second half of 2009 and increased productivity, resulting in significantly improved bottom line financial results for both the quarter and full year.

Total revenue for the fourth quarter of 2009 was $1.5 million compared to $3.1 million for the fourth quarter of 2008. The decline in revenue is primarily due to the decrease in one-time product sales of Heads-Up Challenge and the absence of PokerPro purchases from Aristocrat in 2009. Gross profit was $0.7 million, or 48%, for the 2009 quarter compared to $1.6 million, or 42%, for the comparable 2008 period due primarily to the change in revenue mix. Operating expenses were $1.6 million for the fourth quarter of 2009 compared to $3.3 million for the prior-year period as a result of cost reduction initiatives. Net loss for the 2009 fourth quarter was $0.9 million, or $0.07 per common share, compared to $1.8 million, or $0.16 per common share, for the 2008 quarter. EBITDAS, a non-GAAP financial measure, was $(111,242) for the fourth quarter, an improvement of 83% from $(642,608) million for the fourth quarter of 2008.

Total revenue for the full year 2009 was $6.7 million compared to $14.4 million for the full year 2008. The decline in revenue is primarily due to the decrease in one-time product sales of Heads-Up Challenge and the absence of PokerPro purchases from Aristocrat in 2009. Gross profit was $2.6 million, or 39%, for the full year 2009 compared to $5.5 million, or 38%, for 2008 due primarily to the change in revenue mix. Operating expenses were $7.9 million for the full year 2009 compared to $12.7 million for 2008 as a result of cost reduction initiatives. Net loss for the full year 2009 was $5.7 million, or $0.47 per common share, compared to $7.6 million, or $0.70 per common share, for 2008. EBITDAS, a non-GAAP financial measure, was $(1.7) million 2009, an improvement of 49% from $(3.3) million for 2008.

Balance Sheet and Cash Flow Information

During the second half of 2009, the Company took several steps to strengthen its balance sheet:

•$2.5 million credit facility renewed with Silicon Valley Bank
•$0.6 million common equity investment from ICP Electronics
•$0.5 million common equity private placement
•$1.2 million conversion of long-term debt to common equity
•Term of remaining $0.8 million long-term debt extended to 2012 with reduced cash interest rate and option for payments in common stock
As of December 31, 2009, the company had no borrowings against its credit facility.

Segment Unit Count Information:

PokerPro tables installed worldwide totaled 206(a) units as of December 31, 2009, a sequential increase of 32 from 174 at September 30, 2009. Heads-Up Challenge units operated under recurring revenue operator-direct programs totaled 179 units as of December 31, 2009, a sequential increase of 35 units from September 30, 2009. In addition, 15 Heads-Up Challenge units were sold to operators and distributors worldwide during the fourth quarter and 316 were sold for the full year ended December 31, 2009.

(a) Note that PokerPro table count information for prior periods has been restated. In prior periods, table count included tables installed by PokerTek in North American markets plus all tables sold to Aristocrat. Now that the Company controls distribution and installation worldwide, table count includes those tables installed and available for play worldwide.

Conference Call

PokerTek will host a conference call to discuss its fourth–quarter and full-year results on Tuesday March 9, 2010 at 5:30 p.m. Eastern Time. Interested parties may listen to and participate in the conference call by dialing 888-680-0892 (U.S./Canada) or 617-213-4858 (Other) and entering passcode 76594478. A live webcast of the conference call will be available through a link on our website, www.pokertek.com, under the heading “Investors” as well as at www.earnings.com and www.streetevents.com. For those unable to participate in the live call, an archived replay will be made available for one year on our website. A replay of the conference call will also be available approximately two hours after the conclusion of the call for approximately one week by dialing 888-286-8010 (U.S./Canada) or 617-801-6888 (Other) and entering passcode 85676953.

Use of Non-GAAP Measures

PokerTek, Inc. prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”). In addition to disclosing financial results prepared in accordance with GAAP, the Company discloses information regarding EBITDAS, which differs from the term EBITDA as it is commonly used. In addition to adjusting net loss to exclude taxes, interest, and depreciation and amortization, EBITDAS also excludes noncash charges and share-based compensation expense. EBITDA and EBITDAS are not measures of performance defined in accordance with GAAP. However, EBITDAS is used internally by PokerTek’s management and by its lenders in planning and evaluating the company’s operating performance. Accordingly, management believes that disclosure of this metric offers investors, lenders and other stakeholders with an additional view of the Company’s operations that, when coupled with the GAAP results, provides a more complete understanding of the Company’s financial results.

EBITDAS should not be considered as an alternative to net loss or to net cash used in operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies, and it excludes financial information that some may consider important in evaluating the Company’s performance. A reconciliation of GAAP net loss to EBITDAS is included in the accompanying financial schedules.

About PokerTek, Inc.

PokerTek, Inc. (NASDAQ:PTEK) (www.pokertek.com), headquartered in Matthews, NC, develops and markets products for the casino and amusement industries. PokerTek developed PokerPro® automated poker tables and related software applications to increase casino revenue, reduce expenses, and attract new players into poker rooms by offering interactive poker that is fast, fun and mistake-free. Heads-Up Challenge™ is a two-player table that allows bar and restaurant patrons to compete head-to-head in various games for amusement purposes. Heads-Up Challenge increases earnings for game operators and provides patrons unique and challenging on-site entertainment. Both products are installed worldwide.



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