SERVICES AGREEMENT





         THIS SERVICES AGREEMENT (the "Agreement") is made as of February 1,

2002 (the "Effective Date"), by and between YOUBET.COM, INC., a Delaware

corporation, (the "Company"), and DAVID MARSHALL, INC., a California

corporation, ("DMI").





                              W I T N E S S E T H:





         THAT, WHEREAS, the Company desires to engage DMI to retain the services

of David Marshall ("Mr. Marshall") as Vice Chairman and a member of the

Executive Committee of the Company and to provide other consulting services to

the Company; and





         WHEREAS, DMI desires to make such services available;





         NOW, THEREFORE, in consideration of the covenants and agreements

contained in this Agreement, and for other good and valuable consideration, the

receipt and sufficiency of which the parties hereby acknowledge, the parties

agree as follows:



         1. ENGAGEMENT AND ACCEPTANCE. The Company hereby engages DMI for the

services of Mr. Marshall for a term commencing on the Effective Date and, unless

extended or sooner terminated as hereinafter provided, continuing until January

31, 2004 (the "Initial term"). The Initial term will renew automatically for

successive one (1) year terms (each a "Renewal term") unless a party delivers

written notice to the other party terminating the Initial term or a Renewal

term, as the case may be, at least ninety (90) days before the expiration of the

Initial term or a Renewal term, as the case may be. As used in this Agreement,

the word the "Term" shall mean the Initial term and any and all Renewal terms.

DMI hereby accepts such engagement.



         2. SERVICES.



         A. POSITION. During the Term, Mr. Marshall shall serve as the Vice

Chairman and a member of the Executive Committee of the Company and provide

consulting services to the Company as mutually agreed. During the Term, Mr.

Marshall will, subject to the provisions contained herein, devote a sufficient

amount of his work time to fulfill his duties and responsibilities for the

Company and not engage in any interactive gaming activities that are competitive

with the business of the Company.



         B. REPORTING. Mr. Marshall shall report solely to the Board of

Directors of the Company (the "Board") with respect to Board and Executive

Committee duties. With respect to the other services that Mr. Marshall will

provide under this Agreement, Mr. Marshall shall report to the Company's Chief

Executive Officer. As long as Mr. Marshall is acting as Vice Chairman and a

member of the Executive Committee of the Company, he shall be a member of the

Board.



                                       1

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3.       COMPENSATION.



         A. FEES. Subject to upward adjustment as provided below, and except as

otherwise provided in Section 3.B. of this Agreement, the Company shall, during

the Term of this Agreement, pay to DMI, and DMI agrees to accept, in

consideration of making Mr. Marshall's services available to the Company, the

sum of (i) two hundred twenty thousand and no/100 dollars ($220,000) per each

twelve-month period during the Term, and (ii) the amount of payroll and other

taxes that the Company would be required to pay if Mr. Marshall were employed by

the Company at a salary equal to the amount payable under clause (i) of this

Section 3.A. (Section 3.A.(i) and (ii) being hereinafter collectively referred

to as the "Base Fee"). Except as otherwise provided in Section 3.B. of this

Agreement, the Base Fee shall be payable in equal semi-monthly or bi-weekly

installments. During the Term, the amount set forth in clause (i) of this

Section 3.A. may be increased on each anniversary of the Effective Date at the

discretion of the Board.



         B. TIMING. To the extent that the Company has not paid DMI any Base Fee

payments due as of the date this Agreement is executed and delivered, the

Company shall pay DMI such payments within five (5) days of the execution and

delivery of this Agreement.



C. BONUSES. The Company reserves the right to recognize and reward the

Executive's performance and contributions the Executive may make to the Company

by awarding the Executive such additional bonus compensation, if any, as the

Board may, in its discretion, determine from time to time to be appropriate. Any

such bonus may be in cash or stock, as mutually agreed by the Company and DMI.

In the event that there is a Change of Control (as defined below), the Company

shall issue to DMI a special achievement bonus of three hundred thousand

(300,000) shares of common stock of the Company upon such Change of Control (the

"Change of Control Bonus").



         D. STOCK OPTIONS. Subject to the availability of shares issuable

pursuant to the Company's Stock Option Plan and subject to the applicable rules

governing the grant of options under the Company's 1998 Stock Option Plan, DMI

is hereby granted one million (1,000,000) options for the Company's common stock

pursuant to the Company's 1998 Stock Option Plan. Said stock options will have

an exercise price equal to fair market value. As used in the foregoing sentence,

"fair market value" means the closing price per share of the common stock of the

Company on the Effective Date. Commencing with the Effective Date, DMI's stock

options shall vest equally, on a monthly basis, over two (2) years, at the rate

of one twenty-fourth (1/24th) per month. All unvested options of DMI shall

immediately vest upon a Change of Control defined below and all vested options

shall be exercisable for the later of two (2) years following (a) the date of a

Change of Control or (b) the period of exercisability provided for in the

Company's 1998 Stock Option Plan. Except as otherwise provided in this

Agreement, any unvested options shall terminate as provided in the Company's

1998 Stock Option Plan or as otherwise set forth herein. To the extent of any

conflict between this Agreement, on the one hand, and the Stock Option plan

and/or the 1998 Stock Option Plan Incentive Stock Option Agreement, on the other

hand, this Agreement shall control. In no event shall DMI have less than two (2)

years after the later of (i) May 15, 2004, or (ii) the end of its engagement

under this Agreement by which to exercise any vested options.



         For purposes of this Agreement, the term "Change of Control" shall

mean, a merger, acquisition or other corporate transaction where either (i)

substantially all the Company's assets or fifty percent (50%) or more of the

outstanding common stock of the Company is sold or acquired, or (ii) upon the

consummation of any transaction involving over fifty percent (50%) of the assets

or outstanding stock of the Company, the Company's existing Board as of the date

immediately preceding the consummation of the transaction no longer constitute a

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