Score Media and Gaming : Q2 F2021 MD&A

Score Media and Gaming, Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the Three and Six months ended February 28, 2021 and February 29, 2020

The following is Management's Discussion and Analysis ("MD&A") of the financial condition of Score Media and Gaming Inc. ("theScore", "we", "us" or "our") and our financial performance for the three and six months ended February 28, 2021. The MD&A should be read in conjunction with our unaudited Condensed Consolidated Interim Financial Statements for the three and six months ended February 28, 2021 ("Interim Financial Statements") and Notes thereto. The financial information presented herein has been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). The interim MD&A should be read in conjunction with our MD&A for the year ended August 31, 2020. All amounts are in Canadian dollars unless otherwise stated. As a result of the rounding of dollar differences, certain total dollar amounts in this MD&A may not add exactly to their constituent amounts. Throughout this MD&A, percentage changes are calculated using numbers rounded as they appear. This MD&A reflects information as of April 13, 2021.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this MD&A constitute "forward-looking information" and "forward-looking statements" within the meaning of applicable securities legislation (collectively, "forward-looking statements"). All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding our future financial position and results of operations, strategy, plans, objectives, goals and targets, including in light of the ongoing and evolving COVID-19 pandemic, regulatory approvals, future developments in the markets where we participate or are seeking to participate, and any statements preceded by, followed by or that include the words "believe", "expect", "aim", "intend", "plan", "continue", "will", "may", "would", "anticipate", "estimate", "forecast", "predict", "project", "seek", "should" or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only our expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward- looking statements.

Additional known and unknown risks, uncertainties, and other factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the impact of the ongoing and evolving COVID-19 pandemic on our future financial position and results of operations, strategy, plans, objectives, goals and targets, liquidity, availability of credit, and foreign exchange exposure; the enactment of enabling legislation and regulations in the jurisdictions in which we operate, or intend to operate, to facilitate online sports betting and online casinos, including (without limitation) the enactment of

federal legislation in Canada to permit single event sports betting (including the timing of such legislation and regulations being passed and proclaimed in force (if at all) and the terms and conditions imposed in such legislation and regulations on applicable industry participants); our receipt of all relevant licences and approvals under the applicable legislation and regulations (as applicable) of the jurisdictions in which we operate, or intend to operate; and the rate of adoption of online gaming in Canada and other jurisdictions, as permitted by applicable legislation and/or regulations.

Additional factors are discussed under the heading "Risk Factors" in our Annual Information Form as filed with securities regulatory authorities in Canada and available on SEDAR at www.sedar.com and as filed with the U.S. Securities and Exchange Commission and available at www.sec.gov, and elsewhere in documents that we file from time to time with securities regulatory authorities in Canada and with the U.S. Securities and Exchange Commission. These risk factors include: the impact of COVID-19, risks associated with regulation of the gaming industry, risks related to the use and collection of user data, our historical losses and negative operating cash flows, liquidity risk, our need for substantial capital requirements, our dividend policy, market price and trading volume of our Class A Shares (as defined herein), our debt obligations will have priority over the Class A Shares in the event of a liquidation, dissolution or winding up, our major shareholder controls or directs 100% of the special voting shares, future sales of Class A Shares by existing shareholders and potential dilution, our shareholders are subject to extensive governmental regulations, the increased costs and limits to publicly-available disclosure materials associated with our United States public company compliance efforts, challenges by tax authorities of the transfer pricing of our cross-border intercompany transactions, reliance on the continued support of banks and payment processors, competition in the online and mobile sports betting and media industry, becoming the subject of regulatory investigations, market access limitations, potential losses with respect to individual events or betting outcomes, industry social responsibility concerns, public perception of sports betting, governmental regulation of the internet, reductions in discretionary consumer spending, our costs of compliance with anti-money laundering and corruption laws, digital sports media industry reliance on mobile advertising, the cancellation, postponement or curtailing of sporting and other events, our dependence on key suppliers, the recent expansion of our sports betting operations, mobile device users' ability to opt-out of data tracking and targeted advertising, new and evolving industry, protection of intellectual property, infringement on intellectual property, maintaining and enhancing our brand, corporate social responsibility, responsible gaming and ethical conduct, dependence on our key personnel and employees, the lack of guarantee that states will allow sports betting operators to manage betting limits at the individual customer level, the impact of any negative coverage of fantasy sports or sports betting or the underlying sports or athletes, applicable insurance policy limits, our reliance on third-party geolocation and identity verification systems, limited long-term agreements with our advertisers, rapid technology developments, defects in our products, real or perceived inaccuracies in our key performance metrics, reliance on our collaborative partners, new business areas and geographic markets, our ability to manage growth effectively, information technology defects, our reliance on third-party owned communication networks, our operational and financial infrastructure, uncertain economic health of the wider economy (including as a

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result of the recent COVID-19 pandemic as discussed above), currency fluctuations, changes in taxation, our exposure to taxable presences, risk of litigation, internal controls, credit risk, free and open source software utilization, our reduced disclosure requirements as an emerging growth company, and the interplay of Canadian corporate and securities laws and U.S. federal income tax consequences on certain of our shareholders.

In addition to these factors, other factors not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although we have attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended. Accordingly, readers should not place any undue reliance on forward-looking statements. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results could differ materially from the expectations expressed in these forward-looking statements. We do not intend, and do not assume any obligation, to update these forward-looking statements except as required by applicable law or regulatory requirements.

We provide forward-looking statements because we believe they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us.

COVID-19 Matters

The current COVID-19 pandemic crisis continues to evolve rapidly and could have a material adverse impact on our business, affairs, operations, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure. COVID-19 is altering business and consumer activity in affected areas and beyond. The global response to the COVID-19 outbreak has resulted in, among other things, border closures, severe travel restrictions, the temporary shut-down of non-essential services and extreme fluctuations in financial and commodity markets. Additional measures may be implemented by one or more governments in jurisdictions where we operate. Labour shortages due to illness, isolation programs imposed by us or the government, or restrictions on the movement of personnel could result in a reduction or cessation of all or a portion of our operations.

The extent to which the COVID-19 pandemic may impact our business and activities will depend on future developments which remain highly uncertain and cannot be predicted with confidence, such as the spread of the disease, the duration of the outbreak, severity of the coronavirus and actions taken by the Canadian and US authorities, the postponement, suspension, cancellation, rescheduling and resumption of sporting events, the impact of the pandemic on consumer and advertiser spending, and the ability or willingness of suppliers

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and vendors to provide products and services. If the coronavirus continues to spread at the current pace, disruption to consumer spending and trade could trigger a global recession.

The actual and threatened spread of COVID-19 globally could also have a material adverse effect on the regional economies in which we operate, could continue to negatively impact stock markets, including the trading price of our Class A Shares, could cause continued interest rate volatility and movements and could adversely impact our ability to raise capital.

Any of these developments, and others, could have a material adverse effect on our business, affairs, operations, results of operations, financial condition, liquidity, availability of credit and foreign exchange exposure. In addition, because of the severity and global nature of the COVID-19 pandemic, it is possible that estimates in our financial statements could change in the near term and the effect of any such changes could be material, which could result in, among other things, an impairment of non-current assets and a change in the expected credit losses on accounts receivable. We monitor the situation and any impacts or potential impacts on our business on an ongoing basis.

Share Consolidation

The Company subsequent to shareholder approval on February 10, 2021, completed a share consolidation on February 18, 2021 resulting in ten pre-consolidation shares (Class A subordinate voting shares and special voting shares) for one post-consolidation share of the same class of share (10:1). The consolidation took effect on February 11, 2021 and the Class A subordinate voting shares commenced trading on the Toronto Stock Exchange on a post-consolidation basis at the beginning of open markets on February 18, 2021. The purpose of the share consolidation was in connection with an additional listing of the Company's Class A Shares on a U.S stock exchange.

The previously presented number of Class A subordinate voting shares, special voting shares, stock options and RSUs are all presented on a post-consolidated basis of 10:1 in these financial statements.

theScore

Score Media and Gaming Inc. empowers millions of sports fans through our digital media and sports betting products. Our media app 'theScore' is one of the most popular in North America, delivering fans highly-personalized live scores, news, stats, and betting information from their favorite teams, leagues, and players. Our sports betting app 'theScore Bet' delivers an immersive and holistic mobile sports betting experience and is currently available to place wagers in New Jersey, Colorado, Indiana and Iowa. Publicly traded on the Toronto Stock Exchange (TSX: SCR) and the Nasdaq Global Select Market (NASDAQ: SCR), we also create and distribute innovative digital content through our web, social and esports platforms. We are organized and operate as one operating segment for the purpose of making operating decisions and assessing performance. At February 28, 2021 we had 557 special voting shares, 43,443,651 Class A subordinate voting shares

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("Class A Shares" and each is a "Class A Share"), 3,454,278 options to acquire Class A Shares outstanding and 374,895 non-vested restricted stock units to acquire Class A shares outstanding.

Revenue

Total revenues for the three and six months ended February 28, 2021 were $5.6 million and $14.1 million, respectively.

Revenues from media activities for the three months ended February 28, 2021 and February 29, 2020 were $8.0 million and $6.8 million, respectively. Revenue from media activities for the six months ended February 28, 2021 and February 29, 2020 were $18.6 million and $16.1 million, respectively. During the quarter we saw strong growth in both direct and programmatic revenue as advertising demand from agencies and brands continued to recover.

We generated $81.6 million and $137.4 million of handle1 (2020 - $13.8 million and $22.6 million, respectively) and $0.4 million and $0.1 million of gross gaming revenue2 for the three and six months ended February 28, 2021 (2020 - $0.5 million and $0.7 million, respectively). After taking into account promotional costs and fair value adjustments of unsettled bets, we generated negative net gaming revenue3 of $2.4 million and $4.4 million (2020 - $195,000 and $222,000) for the three and six months ended February 28, 2021.

For the three months ended February 28, 2021 and February 29, 2020, revenue from Canadian sources was $3.5 million and $2.8 million, respectively, while revenue from non- Canadian sources (predominately the U.S.) for the same period was $2.1 million and $3.9 million, respectively. For the six months ended February 28, 2021 and February 29, 2020, revenue from Canadian sources was $8.3 million and $6.3 million, respectively, while revenue from non-Canadian sources (predominately the U.S.) for the same period was $5.8 million and $9.6 million, respectively.

We achieved 3.94 million average monthly active users and 488 million average monthly user sessions on theScore app on iOS and Android during the period, equaling 125 average monthly-sessions-per-user4.

• Handle is calculated as the total amount of money wagered by customers in respect of bets that have settled in the applicable period. Handle does not include free bets or other promotional incentives, nor money bet by customers in respect of bets that are open at period end.
  2 Gross gaming revenue is calculated as dollar amounts wagered by customers, less the dollar amounts paid out to customers in respect of such bets which have settled in the applicable period.
  3 Net gaming revenue is measured as gross gaming revenue, less free bets, promotional costs, bonuses and fair value adjustments on unsettled bets.
  4 User metrics refer to audience and engagement numbers for theScore app on iOS and Android.

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