Parlay Entertainment Increases Third Quarter Revenue 68% and EPS 50%

All amounts in United States Dollars

Parlay Entertainment Inc. (TSX VENTURE: PEI), the world's leading supplier of Internet bingo solutions, today announced record results for the three and nine-month periods ended September 30, 2006.

"We are extremely pleased to have established new corporate records during this quarter," said Mr. Scott F. White, President and CEO, "increasing our third quarter revenue by 68% to $2.6 million, our third quarter earnings per diluted share by 50% to $0.03 and increasing our cash reserves by 131% (from December 31, 2005) to $2.9 million. With revenue for the nine-month period ended September 30, 2006 surpassing our revenue for all of fiscal 2005, we would conclude that our current share price does not adequately reflect our success in 2006 nor our prospects for 2007."

Highlights for the third quarter of fiscal 2006 include:

- New corporate record for revenue at $2,647,668, up 20% from the prior record for Q2 2006 and up 68% from Q3 2005.

- Royalty revenue at $1,937,754, up 31% from Q3 2005.

- New corporate record for net income at $501,931 or $0.03 per share, fully diluted, up from $262,583 in Q3 2005.

- EBITDA(1) increased to $865,023, up from $326,418 in Q3 2005 and EBITDA(1) margin increased to 33% from 21% in Q3 2005.

Highlights for the first nine months of fiscal 2006 include:

- New corporate record for revenue at $6,864,026, up 64% from the prior record for 2005.

- New corporate record for royalty revenue at $5,814,548, up 51% from the prior record for 2005.

- New corporate record for net income at $1,206,255 or $0.08 per share, fully diluted, up from $461,823 recorded in 2005.

- EBITDA(1) increased to $2,082,345 from $705,923 in 2005 and EBITDA(1) margin increased to 30% from 17% in 2005.

- Established a new corporate record for cash at $2.9 million, up 131% from December 31, 2005.

Achievements for the first three quarters of 2006 include:

- Existing bingo network, St. Minver Limited, launches additional network partners with 18 in place at September 30, 2006, including Butlins and Littlewoods bingo. St. Minver launches Swedish language offering transacting in Kronor.

- Existing bingo network, The Gaming Network Limited, adds additional network partners to their network with 13 in place at September 30, 2006, including the recently announced launch of Paddy Power's bingo offering.

- Unibet International Limited, one of the largest privately-owned gambling operators in the European market with 1,340,000 customers in over 100 countries, launched Unibet Bingo.

- Parlay licensee Euro Gaming Limited, owner of Bingos.co.uk, was named Bingo Operator of the Year at the annual eGaming Awards.

- Release of Parlay 4.2, the latest version of Parlay's award-winning online bingo product.

"In view of the recent signing of the Unlawful Internet Gaming Enforcement Act (the "UIGEA") in the United States, we are pleased that our exposure to licensees who do not restrict the access of U.S. residents to their sites has been significantly reduced in the past two years," said Mr. White. "For the three-month period ended September 30, 2006, our estimated revenue exposure to the U.S. business of licensees who do not restrict the access of U.S. residents to their sites was approximately 40% of our total revenue for that period compared to approximately 100% for fiscal 2004. As our existing licensees in the U.K. and Europe expand their businesses and as we add new licensees in those and other international marketplaces, it is our expectation that we will continue to decrease our revenue exposure to licensees who do not restrict the access of U.S. residents to their sites."

Parlay generates revenue from software licensing, installation fees and support services. Consolidated revenues increased to $2.6 million in Q3 2006 from $1.6 million in Q3 2005 or 68% quarter over quarter. The results represent continuing growth across Parlay's portfolio of licensees and the impact of new licensees and network partners during the quarter.

Expenses in Q3 2006 were $1.8 million, up from $1.3 million in Q3 2005. The increase represented the impact of higher compensation costs and higher costs to support licensees together with the costs associated with the proposed business combination with Chartwell Technology Inc.

Net income for the quarter was $0.5 million, or $0.03 per diluted share, compared to $0.3 million, or $0.02 per diluted share in Q3 2005.

Consolidated revenues increased to $6.9 million in the first three quarters of 2006 from $4.2 million in the first three quarters of 2005 or 64% period over period. The results represent continuing growth across Parlay's portfolio of licensees and the impact of new licensees and network partners during the first three quarters of 2006.

Expenses in the first three quarters of 2006 were $4.9 million, up from $3.5 million in the first three quarters of 2005. The increase represented the impact of higher compensation costs and higher costs to support licensees together with the costs associated with the proposed business combination with Chartwell Technology Inc. offset by the absence of certain non-recurring costs from the first three quarters of 2005.

Net income for the first three quarters of 2006 was $1.2 million, or $0.08 per diluted share, compared to $0.5 million, or $0.03 per diluted share in the first three quarters of 2005.

Parlay remains debt free and Parlay's cash balance at September 30, 2006 was $2.9 million.

In addition, prior to June 30, 2006, the Company submitted claims for Scientific Research & Experimental Development income tax incentives, including the cost of fixed assets involved in such activities. The after tax benefit to the Company, of approximately $250,000, for these incentives is subject to review and approval by the Canada Revenue Agency and, accordingly, the benefit will only be recorded once the Company receives the acceptance of the claims.

"We acknowledge that our future growth and profitability may be tempered by the passing of the UIGEA in the U.S.," continued Mr. White, "but it is our expectation that the reduction in our overall exposure to the U.S. marketplace together with amending the way in which we conduct business with our licensees who do not restrict the access of U.S. residents to their sites will limit the impact of the UIGEA on Parlay. Parlay has obtained, and will carefully follow and execute, legal advice relating to the UIGEA. We will continue to diversify our revenue sources and will monitor the enactment of the regulations supporting the UIGEA. Since January 1, 2005, we have not focused our licensing efforts on the U.S. facing market and, over the same period, we have installed our software at 13 new non-U.S. facing customers. Our international growth will continue in Q4 2006 and beyond and we will validate this over the coming months through the announcement of completed software licensing arrangements as our new customers launch commercially."

"Of course, we are disappointed that the UIGEA negatively impacted our proposed business combination with Chartwell Technology Inc. Chartwell and Parlay are meeting to continue to explore the business opportunities which were identified or considered during our merger discussions. We will keep shareholders informed as developments arise," Mr. White concluded.

PARLAY ENTERTAINMENT INC. CONSOLIDATED BALANCE SHEETS (incorporated under the laws of the province of Ontario)

in whole U.S. dollars ----------------------- (Unaudited) (Audited) September 30, December 31, ASSETS 2006 2005 -------------- -------------

Current assets: Cash $ 2,941,520 $ 1,272,510 Accounts receivable: Trade, less allowance of approximately $143,000 ($297,000 - 2005) 1,369,544 1,066,166 Other 20,246 47,306 Income taxes recoverable - 228,077 Prepaid expenses, deposits and other assets 189,186 94,261 -------------- ------------- -------------- ------------- Total current assets 4,520,496 2,708,320

Equipment - net 290,102 210,540 Future income tax asset 40,000 40,000 -------------- ------------- $ 4,850,598 $ 2,958,860 -------------- ------------- -------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities: Accounts payable and accrued liabilities $ 625,848 $ 533,877 Income taxes payable 651,244 379,789 Deferred revenue 203,654 262,775 -------------- ------------- Total current liabilities 1,480,746 1,176,441 -------------- -------------

Shareholders' equity: Common shares, an unlimited number of shares authorized, 13,324,515 shares issued and outstanding (12,728,265 - 2005) 1,455,189 1,206,876 Contributed surplus 1,867,256 1,734,391

Retained earnings (accumulated deficit) 47,407 (1,158,848) -------------- ------------- 3,369,852 1,782,419 -------------- -------------

$ 4,850,598 $ 2,958,860 -------------- ------------- -------------- -------------

PARLAY ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (ACCUMULATED DEFICIT) (in whole U.S. dollars, except for per share amounts) (Unaudited)

Three-Months Ended Nine-Months Ended ------------------ ------------------ September 30 September 30 ------------ ------------- 2006 2005 2006 2005 ----------- ------------ ------------ ------------- Revenues: Royalties $ 1,937,754 $ 1,483,726 $ 5,814,548 $ 3,839,028 Installation fees 49,053 31,879 140,484 191,012 Software license fee 480,000 - 480,000 - Support services 180,861 58,892 428,994 144,582 ----------- ------------ ------------ ------------- 2,647,668 1,574,497 6,864,026 4,174,622 ----------- ------------ ------------ -------------

Expenses: Sales, marketing and services to licensees 232,853 257,066 745,045 738,549 Research, software development and support services 1,042,837 651,048 2,906,921 1,593,580 General and administrative 339,668 339,965 962,428 855,437 Amortization 38,714 16,868 94,028 48,269 Net Chartwell business combination expenses 167,287 - 167,287 - TSX Venture Exchange Listing - - - 170,710 ----------- ------------ ------------ ------------- 1,821,359 1,264,947 4,875,709 3,406,545 License agreement termination write-off - - - 110,423 ----------- ------------ ------------ ------------- 1,821,359 1,264,947 4,875,709 3,516,968 ----------- ------------ ------------ -------------

Income before income taxes 826,309 309,550 1,988,317 657,654 ----------- ------------ ------------ -------------

Income tax provision (recovery) Current 324,378 140,972 782,062 309,836 Current - re-domestication - (94,005) - (94,005) Future - - - (20,000) ----------- ------------ ------------ ------------- 324,378 46,967 782,062 195,831 ----------- ------------ ------------ -------------

Net income for the period 501,931 262,583 1,206,255 461,823

Retained earnings (accumulated deficit), beginning of period (454,524) (1,617,141) (1,158,848) (1,816,381) ----------- ------------ ------------ ------------ Retained earnings (accumulated deficit), end of period $ 47,407 $(1,354,558) $ 47,407 $(1,354,558) ----------- ------------ ------------ ------------- ----------- ------------ ------------ ------------- Net income per share: Basic $ 0.04 $ 0.02 $ 0.09 $ 0.04 ----------- ------------ ------------ ------------- ----------- ------------ ------------ ------------- Diluted $ 0.03 $ 0.02 $ 0.08 $ 0.03 ----------- ------------ ------------ ------------- ----------- ------------ ------------ ------------- Weighted average number of common shares outstanding: Basic 13,228,262 12,595,500 13,066,459 12,081,056 ----------- ------------ ------------ ------------- ----------- ------------ ------------ ------------- Diluted 14,394,249 14,165,470 14,293,039 13,370,759 ----------- ------------ ------------ ------------- ----------- ------------ ------------ -------------

PARLAY ENTERTAINMENT INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in whole U.S. dollars) (Unaudited)

Three-Months Ended Nine-Months Ended ------------------ ------------------ September 30 September 30 ------------ ------------- 2006 2005 2006 2005 ---------- ----------- ---------- ------------

Cash flows from operating activities: Net income for the period $ 501,931 $ 262,583 $1,206,255 $ 461,823 Adjustments to reconcile net income to net cash provided by operating activities: Stock option and share expense 43,357 11,752 132,865 118,156 Amortization 38,714 16,868 94,028 48,269 Loss on disposal of fixed assets - - 2,158 - License agreement termination write-off - - - 110,423 Future income tax (recovery) - - - (20,000) Changes in non-cash working capital items: Accounts receivable 196,276 (205,905) (276,318) (416,556) Prepaid expenses, deposits and other assets (72,123) (8,069) (94,925) 5,708 Accounts payable and accrued liabilities (48,363) 122,776 79,755 76,706 Income taxes recoverable / payable 257,375 46,967 499,532 (71,555) Deferred revenue (19,519) 12,975 (59,121) 30,138 ---------- ----------- ---------- ------------ Net cash provided by operating activities 897,648 259,947 1,584,229 343,112 ---------- ----------- ---------- ------------

Cash flows from investing activities: Purchases of equipment (75,774) (19,810) (175,748) (78,067) Increase (decrease) in accounts payable and accrued liabilities related to purchases of equipment 7,925 - 12,216 - ---------- ----------- ---------- ------------ Net cash (used in) investing activities (67,849) (19,810) (163,532) (78,067) ---------- ----------- ---------- ------------

Cash flows from financing activities: Proceeds from issuance of common shares 33,700 29,950 248,313 202,950 ---------- ----------- ---------- ------------ Net cash provided by investing activities 33,700 29,950 248,313 202,950 ---------- ----------- ---------- ------------

Net increase in cash 863,499 270,087 1,669,010 467,995

Cash, beginning of period 2,078,021 906,805 1,272,510 708,897 ---------- ----------- ---------- ------------

Cash, end of period $2,941,520 $ 1,176,892 $2,941,520 $ 1,176,892 ---------- ----------- ---------- ------------ ---------- ----------- ---------- ------------

Supplemental cash flow activities: Income taxes paid / (received) $ 65,083 $ - $ 279,055 $ 287,386 ---------- ----------- ---------- ------------ ---------- ----------- ---------- ------------ Interest paid $ - $ - $ - $ - ---------- ----------- ---------- ------------ ---------- ----------- ---------- ------------

(1) Management believes that EBITDA (earnings before interest, income taxes and amortization) is a useful supplemental measure of performance. However, EBITDA is not a recognized earnings measure under generally accepted accounting principles ("GAAP") and does not have a standardized meaning. Therefore, EBITDA may not be comparable to similar measures presented by other companies.

EBITDA is reconciled to net income as follows:

Three-Months Ended Nine-Months Ended ------------------ ----------------- September 30, September 30 ------------- ------------ 2006 2005 2006 2005 ---------- ---------- ---------- ----------

Net income $ 501,931 $ 262,583 $ 1,206,255 $ 461,823 Interest - - - - Taxes 324,378 46,967 782,062 195,831 Amortization 38,714 16,868 94,028 48,269 ---------- ---------- ---------- ---------- EBITDA $ 865,023 $ 326,418 $ 2,082,345 $ 705,923 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

Revenue $ 2,647,668 $ 1,574,497 $ 6,864,026 $ 4,174,622 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- % 33% 21% 30% 17% ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------

About Parlay Entertainment

Parlay Entertainment Inc. is the world's leading developer and dominant licensor of Internet bingo solutions. As the inventor and patent holder of Internet bingo(2), Parlay is the first company in the world to develop and deploy a commercial Internet bingo product. Parlay bingo is available in both 75-number and 90-number versions and is complemented by a full suite of lottery and casino games. Our multi-player, multi-platform technology is used to power more online bingo sites than any other software provider in the world. Some of the world's best known brands use Parlay Bingo solutions, including Virgin, Yahoo!, MSN and Littlewoods Gaming.

Parlay has an eight year proven track record built on the success of our clients: In 2005, more than 2.8 players wagered nearly $2 billion USD on gaming sites that use Parlay software. Parlay is headquartered in Oakville, Canada with offices in Bridgetown, Barbados, and Valletta, Malta.

For more information on Parlay solutions and services, please visit our website at www.parlaygroup.com

This document may contain statements about expected future events and/or financial and operating results of Parlay Entertainment Inc. that are forward-looking. By their nature, forward-looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward-looking statements as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.

(2) United States Patent No. 6,585,590 "Method and system for operating a bingo game on the internet", with other Patent applications pending in other countries

The TSX Venture Exchange does not accept any responsibility for the adequacy or accuracy of this release.

Contacts: Parlay Entertainment Inc. Scott White President & CEO (905) 337-6505 Email: swhite@parlaygroup.com

Parlay Entertainment Inc. David Callander CFO (905) 337-6516 Email: dcallander@parlaygroup.com Website: www.parlaygroup.com

SOURCE:  Parlay Entertainment Inc.