Jackpot Digital : Q3 Sep 30, 2021 MDA

Form 51-102F1

JACKPOT DIGITAL INC.

Management's Discussion & Analysis

Condensed Interim Financial Statements for the

Nine Months Ended September 30, 2021

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, 2021 should be read in conjunction with the condensed interim unaudited financial statements and notes thereto for the nine months ended September 30, 2021 and 2020 and the annual audited financial statements and notes thereto for the years ended December 31, 2020 and 2019. The condensed interim unaudited financial statements and notes thereto for the nine months ended September 30, 2021 and 2020 have not been reviewed by the Company's Auditor.

These condensed 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 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 following information is prepared as at November 29, 2021.

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 subject to obtaining customary regulatory approvals, 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 plans, 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.

Overview

The principal business of Jackpot Digital Inc. (the "Company" or "Jackpot") is the manufacturing, leasing and selling of electronic table games (ETGs). 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

JACKPOT DIGITAL INC.

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

Nine months ended September 30, 2021

symbols "JJ.WT.A", "JJ.WT.B" and "JJ.WT.C". The Company's common shares are also listed for trading on the Frankfurt and Berlin Exchanges under the symbol "LVH3".

Effective on May 1, 2020, the Company consolidated its common shares on the basis of 10 pre- consolidation common shares to 1 post-consolidation common share. All the figures as to the number of common shares, stock options, warrants, prices of issued shares, exercise prices of stock options and warrants, as well as loss per share, in the consolidated financial statements are post- consolidation amounts and the prior year comparatives have been retroactively restated to present the post-consolidation amounts. The CUSIP number of the Company's common shares is 466391307 and the CUSIP numbers of the Company's listed for trading warrants are 466391174, 466391182 and 466391216.

On June 28, 2021 the Company caused the incorporation of Yo Eleven Gaming Inc. ("Yo Eleven") under the Business Corporations Act of the Province of British Columbia, Canada (the "BCBCA"). At the time of incorporation, Yo Eleven was a wholly-owned subsidiary of the Company.

The financial statements of the Company's wholly-owned subsidiaries, Jackpot Digital (NV), Inc. (incorporated in the USA), Touche Capital Inc. (incorporated in British Columbia), the Company's former wholly-owned subsidiary Yo Eleven, and the Company's former partially-owned subsidiary 37 Capital Inc. ("37 Capital"), are included in the financial statements from the date that control commenced to the date of disposal or dissolution.

The Company's office is located at Suite 303 - 570 Granville Street, Vancouver, British Columbia, Canada, V6C 3P1 and 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.

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

Results of Operations

On November 3, 2021, the Company signed a Binding Letter of Intent for a licensing agreement with the Pit River Tribe operating the Pit River Casino located in Burney, California to install one of the Company's Jackpot BlitzTM ETG. The licensing agreement is subject to obtaining the customary regulatory approval.

On November 1, 2021, the Company signed a Binding letter of Intent for a licensing agreement with Casino Cosmos located in Tsaghkadzor, Armenia to install two of the Company's Jackpot BlitzTM ETG. The licensing agreement is subject to obtaining the customary regulatory approval.

During the nine months period ended September 30, 2021, twenty-two of the Company's ETG Poker tables which are on certain cruise ships have resumed operations and have started generating revenues.

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Nine months ended September 30, 2021 MD&A Form 51-102F1

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

Nine months ended September 30, 2021

The Company received its Gaming Vendor License from the Soboba Tribal Gaming Commission of California on September 18th, 2020 which formalized the initial order of 2 (two) Jackpot Blitz™ ETGs. During March 2021, the Company received four additional Jackpot Blitz™ ETG orders from Soboba Casino Resort, for a total order of 6 (six) ETGs. During April 2021, the Company remotely installed the first Jackpot Blitz™ ETG and a second Jackpot Blitz™ ETG was installed during June 2021. During July 2021, the Company remotely installed 2 (two) more Jackpot Blitz™ ETG at the Soboba Casino Resort. The remaining order for two Jackpot Blitz™ ETGs is expected to be installed during Q4 2021.

On May 28, 2019, the Company and Virgin Voyages signed a License and Lease Agreement for one Jackpot BlitzTM ETG which was installed on the Scarlet Lady vessel of the Virgin Voyages fleet on January 16, 2020. On December 16, 2020 Jackpot and Virgin Voyages executed an amended License and Lease Agreement for a second Jackpot ETG which was remotely installed on Valiant Lady, the second vessel in the Virgin Voyages fleet, during May 2021.

During April 2021, the Company submitted its software package for Jackpot Blitz™, for User Acceptance Testing ("UAT") to Jackpot's casino operator client. Upon passage of the UAT process, Jackpot and the client intends to begin field testing of the Jackpot Blitz™ and the installation date of the ETGs will be dependent on the client's resumption of operations in 2021.

During February 2021, the Company signed a software license and equipment lease agreement with Casino Incanto of Nuevo Vallarta Nayarit, Mexico, for two of the Company's Jackpot BlitzTM ETGs.

The Company has made an investment of $38,000 in a marketing app which has the ability to advertise to the gaming industry.

As of September 30, 2021, the Company's operations employed 19 people (September 30, 2020: 9 people) consisting of staff and management. As of the date of this MD&A, the Company's operations employ 19 people consisting of staff and management.

At the Company's Annual General and Special Meeting which was held on September 16, 2021 in Vancouver, BC, the shareholders received the Audited Consolidated Financial Statements for the fiscal year ended December 31, 2020 and the Independent Auditor's report thereon; fixed the number of Directors for the ensuing year at four; re-elected Jake H. Kalpakian, Neil Spellman, Gregory T. McFarlane and Alan Artunian as Directors of the Company; re-appointed the Company's Independent Auditor, Smythe LLP, Chartered Professional Accountants, for the ensuing year; authorized the Directors to fix the remuneration to be paid to the Auditor, re-approved the Company's 10% Rolling Stock Option Plan, and approved the Special Resolution in respect to the spinout of the Company's iGaming assets by way of a Plan of Arrangement to Yo Eleven, and approved Yo Eleven's 10% Rolling Stock Option Plan.

The Company is presently not a party to any legal proceedings whatsoever.

Electronic Table Games

The Company is focused on developing and expanding its ETG business.

The Company entered into a Lease Agreement with an arm's length party for a warehouse which has an area of 9,792 square feet and which is located at 4664 Lougheed Highway, Unit WO30, Burnaby, British Columbia. The Company's warehouse is used for the purpose of storing, cleaning, assembling, refurbishing, manufacturing, testing, configuring, packing, and shipping the Company's ETGs. The term of the lease has been extended from May 1, 2021 to October 31, 2023 for a monthly rent of $15,000 and the applicable taxes.

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Nine months ended September 30, 2021 MD&A Form 51-102F1

JACKPOT DIGITAL INC.

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

Nine months ended September 30, 2021

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.
• The Company typically leases ETGs on a monthly recurring basis to cruise ship companies.
• Carnival Corporation ("Carnival") is the largest operator of the Company's ETGs. Carnival has resumed their North American operations as of July 1st, 2021 and it is expected that 70% of their fleet will be operational by the end of 2021.
• The Company has installed one Jackpot BlitzTM ETG on the Scarlet Lady cruise ship and one Jackpot BlitzTM ETG on the Valiant Lady cruise ship of the Virgin Voyages fleet.
• During October 2019, the Company signed a Software License and Equipment Lease
  Agreement (the "Agreement") with Royal Caribbean Cruises Ltd. ("RCL") to be the third cruise line to offer the Jackpot Blitz™ ETGs in their casinos. The Company submitted software for RCL's User Acceptance Testing ("UAT") for launch of the Jackpot Blitz™ ETG on an RCL ship. The installation date of the ETGs is dependent on RCL's resumption of operations.

North American Casinos

• The North American casino industry is predominantly regulated at the state/provincial level as individual jurisdictions. Additionally, some states have native tribal jurisdictions. Every jurisdiction approves the gaming equipment used in their casinos, usually in the form of a gaming license. 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, and the Soboba Tribal Gaming Commission of California. The Company currently has license applications underway with several States, Provincial, and Tribal gaming regulators across North America.
• The Company typically leases ETGs on a monthly recurring basis to North American casino customers.
• 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 BlitzTM 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 months period ended September 30, 2021, the Company incurred $90,000 on salaries and benefits in respect to Research

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Nine months ended September 30, 2021 MD&A Form 51-102F1

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

Nine months ended September 30, 2021

and Development. This cost was incurred primarily for the software development to develop new software features and improve the hardware (reduce cost and improve efficiency) on the Jackpot Blitz™ ETG.

During 2021, 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 started a project with an engineering consulting firm, Enginuity Consulting Ltd. ("Enginuity") to redesign and prototype our next generation Jackpot Blitz™ ETG to further reduce overall cost and scalability of manufacturing.

Acquisition of certain assets of 52 Gaming, LLC.

During February 2021, the Company received TSX Venture Exchange approval and closed its transaction of acquiring certain assets of 52 Gaming, LLC ("52 Gaming"). 52 Gaming, based in North Carolina, used to manufacture and license its electronic poker tables ("ETGs") to the cruise ship industry.

Terms of the transaction are as follows:

• Cash payment of US$107,500 on the closing date to 52 Gaming (paid);
• Issuance of a promissory note by the Company for the amount of US$470,000 with a term of twenty-four months, bearing 10% simple interest per annum, and which may be prepaid by the Company (issued);
  Pursuant to the promissory note, as at September 30, 2021, the Company has paid the principal amount of US$117,500 and US$16,563 in accrued interest. Subsequent to the nine months ended September 30, 2021, the Company has made an additional principal payment of US$58,750 and US$8,885 in accrued interest;
• On the closing date, the issuance of 1,500,000 common shares to 52 Gaming (issued);
• On the closing date, the issuance of 2,000,000 share purchase warrants to 52 Gaming exercisable at $0.105 per share for a period of five years (issued); and
• Commencing January 2022 and for a period of ten years, the Company is to make variable royalty payments to 52 Gaming.

Under IFRS 3, the substance of the acquisition does not constitute a business combination as no processes were acquired and will be accounted for as an asset acquisition.

Consulting and Advisory Agreements

During September 2020, the Company entered into a Non-Exclusive Advisory and Consultancy Agreement with Paulson Investment Company, LLC of New York, USA ("Paulson"), to provide business advisory and consulting services to the Company. As compensation, the Company issued to Paulson 450,000 share purchase warrants exercisable at $0.10 per share for a period of five years. During February 2021, Jackpot and Paulson amended the terms of the agreement with the term ending on November 30, 2021. As at the date of this MD&A, Jackpot has issued to Paulson 626,132 warrants with exercise prices ranging from $0.19 to $0.35 per share. Pursuant to the terms of the Agreement a total of 290,110 warrants have been cancelled and 336,022 warrants remain outstanding.

As of June 25, 2021, the Company has engaged the services of Investing News Network of ("INN") of Vancouver, British Columbia and HE Capital Markets of London, UK as part of the Company's endeavour to increase investor awareness of Jackpot. Jackpot compensated INN a total of

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Nine months ended September 30, 2021 MD&A Form 51-102F1