PacificNet Gains Majority Ownership Interest in PacificNet Games to Enhance Gaming Technology Focus

12 December 2006

PacificNet Inc. (Nasdaq: PACT), a leading provider of Customer Relationship Management (CRM), mobile internet, e-commerce and gaming technology in China, today announced it has acquired an additional 6% interest in PacificNet Games Limited (PacGames). Prior to this, in connection with the acquisition of Able Entertainment previously announced during the Q3 earnings conference call, PacificNet owned 45% of PacGames. PacificNet now owns 51% of PacGames.

"This additional investment in PacGames enhances PacificNet's entry into the new high-margin gaming technology business," said Tony Tong, Chairman and CEO of PacificNet. "In recent board and management meetings, we evaluated the early success of our gaming technology operation and were very satisfied with the rapid progress and financial performance of the gaming operation. The board of directors and management team has approved our new strategy to focus on the rapidly growing gaming market in greater China, Macau, and Asia."

In September 2006, PacificNet opened an office in Macau to focus on the rapidly expanding gaming and entertainment industries in that region. The Macau office is located in First International Commercial Centre, Macau Special Administrative Region, China, and is adjacent to the new Galaxy StarWorld Hotel and is minutes from both the Wynn and Sands Casinos.

"We are happy with the progress of our gaming technology business. The recent selection of PacificNet Game's electronic gaming machines by the Holiday Inn Macau Casino marks our successful entry in the Asian hotel-casino market," said Victor Tong, President of PacificNet. "Macau has become the fastest growing part of China and we are very excited to be moving forward in our pursuit of the Macau gaming technology business. We recognize Macau's remarkable growth potential and plan to aggressively pursue this mass market with the goal of being the leading provider of electronic gaming machines for the Asian gaming market."

Macau is one of the fastest-growing gaming markets in the world and is predicted to surpass Las Vegas in total revenues by 2007. According to recent statistics provided by Macau government, in 2005, Macau's gaming revenues reached US$5.8 billion, second only to Las Vegas gaming revenues of US$6 billion. Macau borders Zhuhai City of Guangdong Province of China, one of the country's wealthiest and most developed regions and is an hour away from Hong Kong via ferry. The number of tourists visiting Macau reached 18.7 million in 2005, of which 56% or 10.5 million visitors were from mainland China. By 2010, the number of tourists is expected to double to nearly 30 million visitors per year. Approximately one billion people live within a three-hour flight of Macau. Numerous hotel, gaming, and other projects are in the works in Macau which are expected to add over 10,000 guest rooms and over 20,000 live entertainment seats in eight separate venues. The number of hotel-casinos in operation and in development in Macau continues to grow, including well-known Chinese names such as Galaxy and Melco, and famous Las Vegas names such as the Sands, the Venetian, and the newly opened Wynn Resort, which celebrated its grand opening on September 6. With the disposable income of the average Chinese on the rise, Macau's gaming and entertainment market is expected to grow for years to come. Macau is the only area in China where gambling is legal.

About PacificNet

PacificNet, Inc. (http://www.PacificNet.com) is a leading provider of Customer Relationship Management (CRM), mobile internet, e-commerce and gaming technology in China. PacificNet's clients include the leading telecom companies, banks, insurance, travel, marketing, business services companies, and telecom consumers in Greater China. PacificNet's corporate clients include China Telecom, China Mobile, Unicom, PCCW, Hutchison Telecom, Bell24, Motorola, Nokia, SONY, TCL, Huawei, American Express, Citibank, HSBC, Bank of China, Bank of East Asia, DBS, TNT, and Hong Kong Government. PacificNet employs over 1,400 staff in its various subsidiaries throughout China with offices in Hong Kong, Beijing, Shenzhen, Guangzhou, Macau, and branch offices in 28 provinces in China and is headquartered in Beijing and Hong Kong.

PacificNet Games Limited (PacGames), is a leading provider of Asian multi- player electronic gaming machines, gaming technology solutions, gaming related maintenance, IT and distribution services for the leading hotel, casino and slot hall operators based in Macau, China and other Asian gaming markets. PacGames is a leading developer of electronic versions of popular table games which are less expensive to run resulting in higher casino profits with great appeal to the mass market players. The growing market in Macau is for Asian table games such as Baccarat, Roulette, Fan Tan, Fish-Prawn-Crab and Sic-Bo Cussec as these games have wider acceptance in the Asian market than Western games such as poker or slots. We believe that the development, manufacturing, maintenance, and service of electronic Asian table games are underserved areas which are predicted to grow considerably as Macau's gaming market matures. PacGames products include multi-play electronic gaming machines such as Baccarat, Fish-Prawn-Crab, Sib-Bo Cussec, Roulette, and Video Lottery Terminals (VLT) such as Keno and Bingo, as well as other traditional slot machines.

PacificNet's operations can be classified into the following four main business units:

(1) Outsourcing Services - involves human voice services such as Business

Process Outsourcing, CRM, call center, IT Outsourcing and software

development services. These types of services are conducted through

our subsidiaries EPRO, Smartime/Soluteck and PacificNet Solution Ltd.

(2) Telecom Value-Added Services (VAS) - primarily involves machine voice

services such as Interactive Voice Response, SMS and related VAS,

which are conducted through our subsidiaries such as Linkhead,

Clickcom, MOABC and Guangzhou 3G.

(3) Products (Telecom & Gaming) - primarily involves communication and

gaming products, GSM/CDMA/3G Products, Multimedia Communication

Kiosks. This Group includes the following subsidiaries: PacificNet

Communications Limited, iMobile, Take1 and PacificNet Games.

(4) Other Business - other administrative, financial and investment

services and non-core businesses such as PacificNet Power Limited

(PacPower), Pacific Financial Services Limited, etc.

Safe Harbor Statement

This Company's announcement contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the SEC on Forms 10-K, 10-Q, 8-K, etc., in our annual report to shareholders, in our proxy statements, in press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, PacificNet's historical and possible future losses, limited operating history, uncertain regulatory landscape in China, and fluctuations in quarterly and annual operating results. Further information regarding these and other risks is included in PacificNet's Form 10K and other filings with the SEC.

Contact:

PacificNet USA office: Jacob Lakhany, Tel: +1-605-229-6678

PacificNet Beijing office: Ada Yu, Tel: +86 (10) 59225000

23/F, Tower A, TimeCourt, No.6 Shuguang Xili, Chaoyang District, Beijing,

China 100028

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All trademarks and copyrighted information contained herein are the property of their respective owners.

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PacificNet Gains Majority Ownership Interest in PacificNet Games to Enhance Gaming Technology Focus

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