EXHIBIT 99.1

MDI ENTERTAINMENT TERMINATES MERGER AGREEMENT WITH THE LOTTERY CHANNEL

HARTFORD, Conn.--Aug. 28, 2000--MDI Entertainment, Inc. (NASDAQ:LTRY) announced
today that it has terminated the Merger Agreement with The Lottery Channel dated
January 26, 2000. Steve Saferin, President and CEO of MDI stated, "It has become
clear to us that several of the material conditions necessary to complete the
merger will not be satisfied."

"We regret that market, legislative and other conditions have made it impossible
to consummate the originally contemplated merger with The Lottery Channel".
Saferin added, "The parties have discussed the possibility of an alternative
agreement, but there can be no assurance that those discussions will continue or
result in an alternative agreement."

Saferin added, "MDI will pursue alternative Internet strategies that take full
advantage of the strength of MDI's exclusive entertainment brands and the
lottery industry's desire to add entertainment value to its product offerings.
Over the past six months, discussions with potential strategic partners and
investors have made it very apparent to us that the value of MDI's exclusive
licensed lottery brands and our ability to aggregate data on lottery players
through our second-chance drawings provides us an ideal platform for crafting an
Internet strategy that is not solely dependent on the sales of lottery tickets
over the Internet".

"It is our intention to continue to work with lotteries and suppliers to the
industry, including our strategic partner Scientific Games International (SG:
NYSE), to develop extended play Internet accessible games from our brands and to
assist lotteries and others in compiling data to initiate one-to-one
communications with their players through the Internet," Saferin said.

"MDI is uniquely situated to execute this business plan and exploit this
marketplace as it relates to lotteries and their players. Our 30 lottery
licenses for well-known entertainment properties, cultural icons and
personalities provide us with the largest single library of proprietary lottery
game content in the world," said Saferin.

Saferin added, "MDI regularly receives millions of entries for its second-chance
drawings. That data, subject to the lottery's privacy policy and the players'
consent can be retrieved, stored and shared with lotteries to enable them to use
the Internet to communicate with their players. We believe the execution of this
strategy will provide us with far greater potential to increase shareholder
value through lottery Internet applications."

Saferin also stated "MDI currently contemplates writing off approximately
$727,000 of expenses relating to the proposed merger transaction. Additionally,
next week the company expects to report a downturn in revenue and a loss of $.25
per share for fiscal year 2000. Nevertheless, despite last year's results we are
very confident that our business model is on track and gaining momentum. With
the assistance of Scientific Games' sales and marketing staff, MDI has enjoyed
increasing success in marketing its products both domestically and
internationally."

"This combined with the improved sales performance of nearly all of MDI's
properties, the recent reorganization and expansion of our sales and marketing
department and forecasts for record sales and a return to profitability in
fiscal 2001, leave management convinced that the Company's business plan is on
track to deliver increased shareholder value," Saferin concluded.

MDI specializes in creating, marketing and implementing entertainment-based
promotions on behalf of the North American and world-wide lottery industry. MDI
revolutionized the lottery industry with its introduction of second-chance
merchandise prizes. MDI's current lottery promotions include scratch games
featuring properties such as Harley-Davidson(R), Wheel of Fortune(R),
Jeopardy!(R), Betty Boop(TM), Twilight Zone(TM), Louisville Slugger(R), TNN(R),
CMT(R), Hummer(R), Ray Charles(R), James Bond 007(R), Pink Panther(TM), The
Outer Limits(TM), Heroes of Space(TM), Michael Buffer's Let's Get Ready To
Rumble(R), Dick Clark's American Bandstand(R), Times Square 2001(TM), The
Hollywood Sign and Walk of Fame, SPAM(R), Greatest Sports Legends and auto race
drivers Dale Earnhardt(R), Dale Earnhardt, Jr.(R), Mark Martin, Matt Kenseth,
Chad Little, Jeff Burton and Bill Elliott.

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.

    CONTACT: Investor Awareness, Inc.
             Tony Schor, 847/945-2222
             www.investorawareness.com

                or

             Sunrise Financial Group, Inc.
             Derek L. Caldwell, 212/421-1616
             www.sunrisecorp.com

                or

             MDI Entertainment, Inc.
             Steven Saferin, 860/527-5359
             www.mdientertainment.com