ESI Announces Resolution of US Situation



    BURNABY, BC, June 5 /CNW/ - ESI Entertainment Systems Inc. ("ESI")
(TSX:ESY) a leading provider of secure payment processing services to
international e-commerce industries, today announces that the Company has
entered into a Deferred Prosecution Agreement ("DPA") with the United States
Attorney's Office for the Southern District of New York ("USAO"). The DPA
represents the resolution of the USAO's investigation into the Company.
    Pursuant to the DPA, ESI has consented to the filing of a criminal
information relating to transactions between Internet gambling merchants and
persons located in the United States. The USAO has agreed to defer the
prosecution of any charges and, as a consequence, the Company will not be
prosecuted as long as it fulfills the conditions imposed during the eighteen
month term of the DPA. The DPA contains the following main points:

    
    -  ESI agrees that it will pay an amount to the United States totaling
       US$9,114,342 which is disgorgement of proceeds received by Citadel
       Commerce. This amount represents the funds that the USAO seized in
       early 2007.

    -  ESI agrees to cooperate fully with US authorities in all matters
       relating to the ongoing investigations by the USAO.

    -  ESI agrees to fully implement procedures and controls to prevent
       illegal transactions between internet gambling merchants and persons
       located in the US. With the approval of the USAO, ESI has engaged FTI
       Consulting, Inc., a forensic accounting firm, to monitor ESI's
       compliance with these procedures and controls.

    Additionally the Company announces:

    -  The directors have recommended that ESI now commence efforts to raise
       additional working capital by way of an equity issue.

    -  The Company has been the recipient of various unsolicited and
       solicited preliminary expressions of interest for certain of its
       divisions and for the company as a whole, and will continue to
       evaluate possible options.

    -  Citadel Commerce has focused its effort on enhancing and deploying its
       e-wallet platform, paper cheque payouts and Internet Banking (Rapid
       and Instant Bank Transfers), and now supports instant payment for over
       600 million bank accounts in more than 36 countries outside the US.
    

    Tony Greening, CEO, said "This agreement resolves the USAO's
investigation relating to the Company's former US Internet gaming payment
processing activities. We believe that this settlement is in the best
interests of ESI and its shareholders."
    "Obtaining a resolution to the US situation required over 14 months of
negotiations, consumed significant amounts of ESI's capital and resources, and
resulted in the Company having to write off certain assets and offset certain
liabilities. Our customers, employees and shareholders have all patiently
waited for this resolution and we are pleased we can now begin to refocus our
efforts on building and strengthening the ESI business."

    About ESI Entertainment Systems Inc.

    ESI Entertainment Systems Inc. ("ESI") (TSX: ESY) provides products and
services to the international gaming and payment processing industries through
its three principal subsidiaries, Citadel Commerce Corp., ESI Integrity Inc.
and PlayLine Inc. ESI's products and services, which primarily consist of
payment processing, transaction monitoring and turnkey gaming platforms, are
deployed in the on-line and land based gaming markets.

    %SEDAR: 00023260E




For further information:

For further information: ESI Entertainment Systems Inc., Tony Greening,
Chief Executive Officer, Telephone: (604) 299-6922, email: tgreening@esi.ca,
Web: www.esi.ca

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ESI Entertainment Systems Inc.

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