Form 51-102F1

JACKPOT DIGITAL INC.

Management's Discussion & Analysis

Condensed Consolidated Interim Financial Statements for the

Nine months Ended September 30, 2022

The following discussion and analysis of the financial condition and financial position and results of operations of Jackpot Digital Inc. (the "Company" or "Jackpot") for the nine months ended September 30, 2022 should be read in conjunction with the condensed consolidated interim unaudited financial statements and notes thereto for the nine months ended September 30, 2022 and 2021 and the annual audited financial statements and notes thereto for the years ended December 31, 2021 and 2020. The condensed consolidated interim unaudited financial statements and notes thereto for the nine months ended September 30, 2022 and 2021 have not been reviewed by the Company's Auditor.

These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting using the accounting policies consistent with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"). They do not include all of the information required for full annual financial statements. The Company's condensed consolidated interim unaudited financial statements are expressed in Canadian (CDN) Dollars which is the Company's and its subsidiaries' functional currency. All amounts in this MD&A are in CDN dollars unless otherwise stated.

The Company's common shares trade on the TSX Venture Exchange ("TSX-V") under the symbol "JJ" and on the OTCQB under the trading symbol "JPOTF". A certain number of the Company's warrants trade on the TSX-V under the symbols "JJ.WT.B" and "JJ.WT.C". The Company's common shares are also listed for trading on the Frankfurt Exchange under the symbol "LVH3".

The following information is prepared as at November 28, 2022.

The Company is a reporting issuer in the Provinces of British Columbia and Alberta and files all public documents on www.sedar.com.

Forward-Looking Statements

Certain statements contained herein are "forward-looking" and are based on the opinions and estimates of management, or on opinions and estimates provided to and accepted by management. Forward-looking statements may include, among others, statements regarding future plans, costs, projections, objectives, economic performance, or the assumptions underlying any of the foregoing. In this MD&A, words such as "may", "would", "could", "will", "likely", "enable", "feel", "seek", "project", "predict", "potential", "should", "might", "hopeful", "objective", "believe", "expect", "propose", "anticipate", "intend", "plan", "estimate", "optimistic" and similar words are used to identify forward- looking statements. Forward-looking statements are subject to a variety of significant risks and uncertainties and other factors that could cause actual events or results to differ materially from those expressed or implied. Although management believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, projections and estimations, there can be no assurance that these assumptions, projections or estimations are accurate. Readers, shareholders and investors are therefore cautioned not to place reliance on any forward- looking statements in this MD&A as the plans, assumptions, intentions, estimations, projections, expectations or factors upon which they are based might vary or might not occur. The forward- looking statements contained in this MD&A are made as of the date of this MD&A, and are subject to change after such date. The Company undertakes no obligation to update or revise any forward- looking statements, except in accordance with applicable securities laws.

JACKPOT DIGITAL INC.

Form 51-102F1 - Management's Discussion & Analysis

Nine months ended September 30, 2022

Overview

The principal business of Jackpot is the developing and marketing of dealerless electronic table games ("ETGs") to casino operators. The Company's flagship dealerless poker product, Jackpot Blitz®, is a digital 'smart table' which brings the social benefits of multiplayer casino games such as poker, blackjack and baccarat, into the digital era.

Effective on November 4, 2021, the Company completed a spinout of its online gaming software assets (the "Assets") by way of a plan of arrangement ("the Arrangement") under the Business Corporations Act (British Columbia). The Arrangement was carried out by statutory arrangement under Division 5 of Part 9 of the BCBCA. Pursuant to the Arrangement Jackpot has spun out its online gaming software to Yo Eleven Gaming Inc. ("Yo Eleven") in exchange for 16,966,931 Yo Eleven common shares issued at the price of $0.02 per common share for a total amount of $339,339 to Jackpot's registered and beneficial shareholders as of a November 1, 2021 (the "Record Date") on the basis of one (1) Yo Eleven common share for every five (5) Jackpot common shares held by Jackpot shareholders. Simultaneously, all Yo Eleven shares held directly by Jackpot were returned to the treasury and were cancelled. As a result of the completion of the Arrangement, as of November 4, 2021, Yo Eleven is no longer a subsidiary of Jackpot, and has become a reporting issuer in the Provinces of British Columbia and Alberta qualifying as a Specified Small Business Corporation under the Income Tax Act (Canada).

The financial statements of the Company's wholly-owned subsidiaries, Jackpot Digital (NV), Inc. (incorporated in the USA), and Touché Capital Inc. (incorporated in British Columbia) are included in the condensed consolidated interim financial statements from the date that control commenced to the date of disposal or dissolution.

The Company's offices are located at Suite 303 - 570 Granville Street, Vancouver, British Columbia, Canada, V6C 3P1 and at Suite 258 - 4664 Lougheed Highway, Burnaby, British Columbia, Canada, V5C 5T5. The Company's warehouse is located at 4664 Lougheed Hwy, Unit W030, Burnaby, British Columbia, Canada, V5C 5T5.

The Company's registered office is at Suite 3200 - 650 West Georgia Street, Vancouver, BC V6B 4P7.

The Company's audit committee consists of Messrs. Neil Spellman (Chairman), Gregory McFarlane and Alan Artunian.

The Company's Registrar and Transfer Agent is Computershare Investor Services Inc. located at 510 Burrard Street, Vancouver, BC, Canada, V6C 3B9.

Results of Operations

During November 2022, the Company signed a licensing agreement with Chumash Casino Resort to install four (4) Jackpot Blitz® Electronic Table Games ("ETGs") at Chumash Casino Resort located in Santa Ynez, California near Santa Barbara. The licensing agreement is subject to obtaining the customary regulatory approvals.

On November 11, 2022, the Company received licensing approval from the Pit River Gaming Commission, which is the regulator for Pit River Casino ("Pit River") located in Burney, California.

On October 7, 2022, the Company completed the installation of two (2) Jackpot Blitz® ETGs on site at Sac and Fox Casino Resort ("Sac & Fox") located in Powhattan, Kansas.

During October 2022, the Company sold two Jackpot Blitz® dealerless poker ETGs to an international commercial casino group located in Vietnam.

Jackpot Digital Inc.

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Nine months ended September 30, 2022 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

Form 51-102F1 - Management's Discussion & Analysis

Nine months ended September 30, 2022

During September 2022, the Company signed a licensing agreement with Norson Group S.R.L, located in Santiago, Dominican Republic to install five (5) Jackpot Blitz® ETGs. The licensing agreement is subject to obtaining the customary regulatory approvals.

On August 15, 2022, the Company received licensing approval from the Redding Rancheria Gaming Commission, which is the regulator for Win River Resort & Casino ("Win River") located in Redding, California.

During August 2022, the Company signed a licensing agreement with Piggs Peak Hotel & Casino located in Eswatini (formerly Swaziland), Africa to install four (4) Jackpot Blitz® ETGs. The licensing agreement is subject to obtaining the customary regulatory approvals.

During July 2022, the Company signed a licensing agreement with Buffalo Bill's Casino Resort, located in Primm, Nevada to install two (2) Jackpot Blitz® ETGs. The licensing agreement is subject to obtaining the customary regulatory approvals.

On June 29, 2022, the Company successfully completed the installation of 2 (two) Jackpot Blitz® ETGs at Rosebud Casino, located in South Dakota.

During June 2022, the Company signed a licensing agreement with Casino Pauma, located in Pauma Valley, California to install two (2) Jackpot Blitz® ETGs. The licensing agreement is subject to obtaining the customary regulatory approvals.

During May 2022, the Company signed a licensing contract with Treasure Bay VI Corporation of the United States Virgin Islands to install one (1) Jackpot Blitz® ETG at Divi Carina Bay Resort & Casino located in St. Croix. The agreement is subject to obtaining the customary regulatory approvals, and resurrects the original agreement announced on May 15, 2020, which did not advance due to the COVID-19 pandemic.

During May 2022, the Company signed a licensing agreement with Win-River Resort & Casino, located in Redding, California to install two (2) Jackpot Blitz® ETGs. The licensing agreement is subject to obtaining the customary tribal regulatory approval. Jackpot currently holds all other required state and federal registrations.

On April 21, 2022, the Company introduced the next generation of Jackpot Blitz® to the casino world at the Indian Gaming Tradeshow and Convention. The new version of Jackpot Blitz® supports the Slot Accounting System ("SAS") protocol, with capabilities to accept cash/voucher and print voucher at each seat.

During April 2022, the Company completed the installation of five (5) Jackpot Blitz® ETGs on site at Three Rivers Casino Resort located in Oregon.

During April 2022, the Company submitted additional software packages for Jackpot Blitz® for User Acceptance testing ("UAT") to Jackpot's client, Royal Caribbean Cruises Ltd. ("RCL"). Upon sign-off from RCL, Jackpot and RCL intend to begin field testing of Jackpot Blitz® and installation of the ETGs is expected to follow shortly after the UAT process is finalized.

During March 2022 the Company signed licensing agreements with:

  1. Silver Wolf Casino, located in Wolf Point, Montana to install one (1) Jackpot Blitz® ETG;
  2. Pit River Casino located in California to install 1 (one) Jackpot Blitz® ETG; and
  3. Sac & Fox Casino located in Kansas to install 2 (two) Jackpot Blitz® ETGs.

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Nine months ended September 30, 2022 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

Form 51-102F1 - Management's Discussion & Analysis

Nine months ended September 30, 2022

On February 23, 2022, the Company signed a Licensing Agreement with Casino Cosmos located in Tsaghkadzor, Armenia to install 2 (two) of the Company's Jackpot Blitz® ETGs.

On February 3, 2022, the Company received its Class II Gaming License from Three Rivers Gaming Commission located in Oregon.

On January 2, 2022, the Company signed an agreement for the installation of one Jackpot Blitz® ETG on the Resilient Lady, the newest member of the Virgin Voyages fleet.

Electronic Table Games

The Company is focused on the development and expansion of its ETG business with the primary focus during 2022 on: (i) licensing and distribution to the US Tribal land-based casino market; (ii) obtaining GLI certification for the next generation of Jackpot Blitz® ETG which includes the SAS protocol integration; and (iii) reduction of the production cost for the Jackpot Blitz® ETG.

The Company categorizes its ETG customers in three markets: cruise ships, North American casinos and other markets.

Cruise Ships

  • The cruise ship industry operates their casinos while they are in international waters, and therefore, they do not require their gaming equipment vendors to attain any form of gaming license or product approval.
  • During 2021, the Company acquired certain assets of 52 Gaming, LLC ("52 Gaming") thereby fortifying its ETG monopoly in the cruise ship industry. 52 Gaming, based in North
    Carolina, manufactured and licensed its electronic poker tables ("ETGs") to the cruise ship industry. This transaction has solidified Jackpot's position as the leading Electronic Table
    Game supplier for the cruise ship industry.
  • The Company typically leases ETGs on a monthly recurring basis to cruise ship companies and generates revenues according to the gross rakes, fees and side games offered.
  • Carnival Corporation ("Carnival") is the largest operator of the Company's ETGs.
  • The Company has installed three Jackpot Blitz® ETGs on the three ships of the Virgin Voyages fleet.
  • The Company has in place a Software License and Equipment Lease Agreement (the
    "Agreement") with Royal Caribbean International ("RCI") to be the third cruise ship operator to offer the Jackpot Blitz® ETGs in their casinos. The Company submitted software for RCI's User Acceptance Testing ("UAT") for launch of the Jackpot Blitz® ETG on an RCI ship. The installation date of the ETGs will be set after the RCI's UAT finalization.

North American Casinos

  • The North American casino industry is regulated at the federal, state, provincial and/or tribal levels as individual jurisdictions. Every jurisdiction approves the gaming equipment used in their casinos, usually in the form of a gaming or vendor licenses. Therefore, the Company must attain gaming licenses directly or through a distributor to expand its ETG business in North America.
  • The Company currently holds approved gaming licenses and registrations in North America with the California Gambling Control Commission, the Department of Justice and Public Safety, Gaming, Liquor and Security Licensing in the Province of New Brunswick, the Rosebud Sioux Tribe of Nebraska, the Soboba Tribal Gaming Commission of California, and the Three Rivers Gaming Commission of Oregon, the Sac & Fox Tribe of Kansas, the Win River Tribe of California, the Pauma Tribe of California. The Company currently has license applications underway with several States, a Province, and Tribal gaming regulators across North America.

Jackpot Digital Inc.

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Nine months ended September 30, 2022 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

Form 51-102F1 - Management's Discussion & Analysis

Nine months ended September 30, 2022

  • The Company typically leases ETGs on a monthly recurring basis to North American casino customers sharing revenue from the rakes generated by the ETGs.
  • The Company has signed Agreements and/or Binding Letters of Intent with numerous entities in Canada and the United States which are contingent on the Company receiving license approvals by the relevant regulatory bodies.

Other Markets

  • Markets outside cruise ships and North American casinos are considered on a case-by- case basis, depending on the revenue potential, practicality of deploying and supporting the
    Company's ETGs in other countries/continents, and other considerations.
  • The Company may opt to lease or sell ETGs in other markets.
  • The Company has signed Sales/Service and/or Distribution agreements and/or Binding Letters of Intent with several entities in other markets.
  • The Company has installed one Jackpot Blitz® ETG at the Il Palazzo land- based casino in San Lorenzo, Paraguay.

Research and Development

The Company is continuously developing new hardware and software components for the Jackpot Blitz® ETG and other products in the development pipeline. During the nine-month period ended September 30, 2022, the Company incurred $257,979 on salaries and benefits in respect to Research and Development ("R&D"). This cost was incurred primarily to develop new software features and improve the hardware with the aim to reduce cost and improve the efficiency of the Jackpot Blitz® ETG. Furthermore, during the nine-month period ended September 30, 2022, the Company incurred $182,191 for the purchase of parts and $100,907 for the design fees of the next generation model of the Jackpot Blitz® ETG which were capitalized as the prototype and the Intellectual property respectively.

During 2022, the Company's R&D efforts continue to develop new hardware and software components for the Jackpot Blitz® ETG. First, prototyping and redesigning critical hardware components of the Jackpot Blitz® ETG to reduce cost and improve manufacturability. Second, update the current software technology to improve the ability to update and add new software features efficiently for the Jackpot Blitz® ETG as well as other future gaming products. Third, the Company completed a project with an engineering consulting firm to redesign and prototype our next generation Jackpot Blitz® ETG to further reduce overall cost and scalability of manufacturing.

In June 2022, the Company entered into a master license agreement with an arm's length third party to acquire an "SAS" Engine which enables Jackpot Blitz® ETG to be "SAS" compatible, a requirement to gain market access in many of the land-based jurisdictions.

In October 2022, the Company showcased its next generation Jackpot Blitz® dealerless Poker ETG at the 2022 Global Gaming Expo ("G2E") in Las Vegas, Nevada, USA. The Jackpot Blitz® ETG tables introduced in G2E represents a major milestone in the R&D efforts to develop a next generation ETG table which is expected to be cheaper, scalable, and aligns more to the industry standard than the previous iteration of Jackpot Blitz® ETG.

The Company plans to continue its R&D efforts in order to enhance the marketability of the Company's product.

Consulting and Advisory Agreements

On May 13, 2022, the Company engaged the services of Market One Media Group Inc. ("MarketOne") to provide marketing and social media expertise in support of Jackpot's growth initiatives. The Company has signed a contract for services to be provided over a 12-month period

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Nine months ended September 30, 2022 MD&A Form 51-102F1

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Jackpot Digital Inc. published this content on 29 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 November 2022 13:18:17 UTC.