1015923--3/16/2006--OPTIMAL_GROUP

related topics

{system, service, information}

{customer, product, revenue}

{product, market, service}

{regulation, change, law}

{operation, international, foreign}

{regulation, government, change}

{property, intellectual, protect}

{financial, litigation, operation}

{acquisition, growth, future}

{personnel, key, retain}

{tax, income, asset}

Our business depends upon the services of key personnel. We may be unable to find suitable acquisition candidates and we may not be able to successfully integrate businesses we acquire into our operations. We are subject to the risk that a taxation authority could challenge certain filing positions we have taken, and that a successful challenge could require us to pay significant additional taxes. Our payments businesses are at risk of loss due to fraud, disputes and merchant insolvency We may not be able to safeguard against security and privacy breaches in our electronic transactions. Our payments systems might be used for illegal or improper purposes. We must comply with credit card and check clearing association rules and practices, which could impose additional costs and burdens on our payments businesses We may not be able to develop new products that are accepted by our customers. The failure of our systems, the systems of third parties or the Internet could negatively impact our business systems and harm our reputation for reliability. Increasing government regulation of Internet commerce could make it more costly or difficult to conduct our businesses. If our relationships with our banking partners deteriorated, our ability to process transactions could be impaired or halted It may be difficult or costly to enforce our rights with respect to assets held in foreign jurisdictions. Our intellectual property rights may be infringed by unauthorized third parties. We operate in a competitive market for our products and services We rely upon non-exclusive arrangements with independent sales agents to acquire and retain our customers Our products and services are based on sophisticated technology, which may be negatively affected by technological defects and product development delays If our encryption technology fails to ensure secure electronic commerce transactions, we may become subject to liabilities and our customers may stop using our products and services. We are subject to exchange rate fluctuations between the U.S. dollar and the Canadian dollar. Our businesses are subject to fluctuations in general business conditions. The legal status of Internet gaming is uncertain. Future regulation may make it costly or impossible for us to continue processing transactions for gaming merchants, and reports of regulatory initiatives that are unfavorable to us may adversely affect the trading price of our common shares. Our status under certain financial services regulations is unclear. We bear consumer risk in relation to our guaranteed FirePay wallet offering. Our contracts for our hardware services segment may not be renewed or may be reduced. We rely upon two customers for a significant portion of our hardware services revenues. Our hardware services business is affected by computer industry trends. Our hardware services business operates in a market subject to rapid technological change. The per incident revenues in our hardware services business are variable. Our hardware services business relies on single suppliers for some of our inventory. We may not be able to accurately predict the inventory requirements of our hardware services business. We may fail to price fixed fee contracts accurately. We may be subject to additional litigation stemming from our operation of the U-scan self-checkout business.

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1015923--3/16/2006--OPTIMAL_GROUP_INC