No Change at Cryptologic

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There is no news from the online casino software provider these days. And the reason for that is that there are no developments taking place. The only information comes from the mandatory quarterly filings, because Cryptologic is a listed company. Going by the last few quarterly statements one can say that it will be a long wait.

The part of the quarterly results that might interest online casino players is the report on two issues that may lead to some developments. The first is the strategic review that was commissioned by Cryptologic in March 2011. The software provider had announced that it had appointed Deloitte Corporate Finance as financial advisor to advice on the strategic way ahead. The Q3 quarterly statement records, "The strategic review is ongoing and further announcements will be made as and when appropriate." The second issue of interest is the dispute with a brand licensor. It is believed that this dispute was a major source of Cryptologic's problems. There is no resolution in sight. Subsequent to the suit filed by Cryptologic in June 2011seeking judgment that any breach was cured and the agreement remains in force, the brand licensor answered the complaint in October 2011 denying any cure and filed a countersuit.

The other part of the quarterly report that interests online casino players is the segment wise operating and financial review. The two important segments are Hosted Casino and Branded Games. Revenue from Hosted Casino increased to $6.5 million in Q3 2011 from $5.7 million in Q2 2011, reflecting a higher contribution from a key licensee. Revenue from Branded Games decreased to $1.4 million in Q3 2011 from $2.1 million in Q2 2011. Three new branded games went live in the quarter taking the total number of games rolled out by licensees and generating revenues to date to 188. Poker and Other revenue amounted to $0.3 million in Q3 2011 as compared to $0.2 million in Q2 2011.

The major Q3 2011 highlights are as follows. The total revenue increased to $7.2 million from $7.0 million in Q2 2011. The total expenses reduced to $5.9 million from $6.5 million in Q2 2011. The income before tax increased to $1.3 million from $0.5 million in Q2 2011. The cash surplus increased to $15.2 million from $12.0 million in Q2 2011. The press release said, "The Board is encouraged by the performance in the quarter and continues to focus on increasing revenues while managing costs tightly to enhance shareholder value."

The last new game released by Cryptologic was Flash Velocity in July 2011. It was an addition to the branded DC Comics series. With so much jostling going on in the online gambling industry Cryptologic is in danger of getting left far behind.

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