CryptoLogic Inc.
TSX : CRY
LSE : CRP
NASDAQ : CRYP

CryptoLogic Inc.

August 09, 2005 09:18 ET

CryptoLogic Announces Betfair is Considering In-House Poker Strategy For 2006

TORONTO, ONTARIO--(CCNMatthews - Aug. 9, 2005) -

ALL DOLLAR AMOUNTS IN US$

CryptoLogic Inc. (TSX:CRY)(NASDAQ:CRYP)(LSE:CRP), a leading software developer to the global Internet gaming market, announced that Betfair, one of the company's poker licensees, has advised CryptoLogic of its long term intent to bring its core products in-house eventually rather than outsourcing third-party technology. Discussions continue between the companies and no definitive decision has been made on the status of Betfair's Internet poker site.

While Betfair has launched a successful, profitable site using CryptoLogic-developed software, Betfair's long term strategy and practices in its core business has been built on technology solutions designed and developed internally. Decisions consistent with this strategy could result in Betfair establishing its own poker room and the termination of its contract with WagerLogic Limited, the licensing subsidiary of CryptoLogic, in early 2006.

WagerLogic's central poker room, shared by all of its poker licensees, is experiencing record growth - 180% over a year ago, well ahead of the industry. CryptoLogic's strategy would be to offset the potential departure of Betfair with continued strong growth from poker, healthy results from its core casino business, and the potential signing of new licensees.

If Betfair were to leave the central poker room, it is not expected to affect CryptoLogic's 2005 results, but could have a material affect on 2006 earnings if this revenue is not replicated with growth from other existing and potential new licensees. While Internet poker is growing and accounts for 30% of CryptoLogic's Q2 2005 revenue, CryptoLogic's core business remains its casino software. This segment continues to deliver excellent performance and is the company's largest cash contributor at approximately 60% of total revenue.

Once a definitive decision has been made, CryptoLogic will update shareholders and provide interim guidance as appropriate. CryptoLogic's earnings guidance for the third quarter of 2005 remains on target.

WagerLogic's central poker room has consistently ranked among the top five poker rooms on the Internet. CryptoLogic's strategy of aggregating its licensees' brands, large player bases and marketing resources, into a common poker room, has translated into one of the fastest-growing poker rooms on the Internet. CryptoLogic will continue to build on this strong market position and capitalize on the growth momentum in Internet poker.

About CryptoLogic® (www.cryptologic.com)

Focused on integrity and innovation, CryptoLogic Inc. is the world's leading, blue-chip public developer and supplier of Internet gaming software. CryptoLogic's leadership in regulatory compliance makes it one of the very few companies with gaming software that is certified to strict standards similar to land-based gaming. WagerLogic Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of the company's gaming software and services to a blue-chip customer base worldwide. For information on WagerLogic®, visit www.wagerlogic.com.

CryptoLogic's common shares trade on the Toronto Stock Exchange (symbol: CRY), on the Nasdaq National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).

CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:

Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks associated with the Company's financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company's filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking statements.



Contact Information

  • CryptoLogic
    Nancy Chan-Palmateer
    Director of Communications
    (416) 545-1455
    or
    Argyle Rowland Communications - (media only)
    Daniel Tisch
    (416) 968-7311 ext. 223
    dtisch@argylerowland.com
    or
    Argyle Rowland Communications - (media only)
    Karen Passmore
    (416) 968-7311 ext. 228
    kpassmore@argylerowland.com