Popeye the Sailor Man Joins MDI Entertainment Properties To Bring Extra Punch to Lottery Games & Promotions.

Business Editors

HARTFORD, Conn.--(BUSINESS WIRE)--July 26, 2002

Popeye the Sailor Man, one of the most popular comic characters in the world, will be available for Lottery games in an agreement between King Features Syndicate and MDI Entertainment, Inc. (OTC BB: LTRY) the company announced today.

The agreement will enable government sponsored lotteries in the U.S. and Canada to build games and promotions using images of Popeye and the salty sailor's famous co-stars: Olive Oyl, Swee'Pea, Brutus and Wimpy.

"Popeye has been a pop culture icon for more than 70 years," said Steve Saferin, President and CEO of MDI. "He has starred in more than 600 cartoons, most still running in syndication the world over."

"As one of the best liked and most easily recognized characters in the world, Popeye brings high awareness with him wherever he goes," Saferin added. "Consumer research indicates that Popeye's popularity is significantly greater than most other cartoon properties being marketed to lotteries today."

Popeye(c) is said to have increased U.S. spinach consumption by 33 percent and to have "saved" the spinach industry in the 1930s. The unlikely hero was a groundbreaker in licensed products, and holds the record for the longest continually licensed product by King Features - Popeye Brand Spinach.

The comic strip and cartoon hero also has his bulging forearms around more than 1500 Popeye's fast-food restaurants featuring chicken and biscuits.

MDI signed an exclusive lottery promotions contract with King Features Syndicate's Hearst Holdings, Inc. The three-year agreement allows the use of the Popeye images and character, along with his co-stars for lottery games and promotions.

The game themes and ticket designs make prominent use of the widely recognized brands and celebrities through MDI's exclusive brands licensing program. In addition to cash prizes, official logo and nostalgic merchandise and memorabilia are selected by the lotteries for prize packages. Instant winners and second chance winners from bonus drawings, can land the additional prizes with non-winning tickets and special entries, all adding extra value to the lottery tickets.

MDI lottery brand licenses and turnkey promotions provide lotteries with most of the labor intensive tasks that accompany large-scale merchandise prize management and fulfillment, and secure random drawings.

MDI's services also include game and ticket design, merchandise prize fulfillment, management of second-and third-chance draws, fully-staffed customer service, coordination of winner travel & accommodations, staff training, advertising and marketing support, consumer research and Internet marketing and advertising.

The company's portfolio of licensed lottery properties includes but is not limited to the NBA/National Basketball Association, Betty Boop(TM), Elvis Presley(R), I Love Lucy(R), Magic 8 Ball(R), FIFA World Cup(R) Soccer, Universal Studios Monsters(TM), SPAM(TM), Louisville Slugger(R), CMT(R), Wheel of Fortune(R), Jeopardy! (R), Harley-Davidson(R), The Hollywood Sign(R) and Hollywood Walk of Fame(R) Ray Charles(R), Hollywood Squares(R), TABASCO(R), Lionel, and NASCAR(R) race drivers including Jeff Burton(R), Mark Martin(R), Matt Kenseth(R), and Bill Elliott(R).

MDI has entered into a strategic business agreement with Scientific Games Corporation (NASDAQ: SGMS). Scientific Games is one of the world's largest suppliers of lottery games

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. Certain information included in this press release (as well as information included in oral statements or other written statements made or to be made by MDI) contains statements that are forward-looking, such as statements relating to the future anticipated direction of the lottery industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales and potential contracts. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of MDI. These risks and uncertainties include, but are not limited to, those relating to development and expansion activities, dependence on existing management, financing activities, domestic and global economic conditions, changes in federal or state tax laws and market competition factors.