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Struggles of Online Casino Software Giant Result in a Resignation & Layoffs

14 August 2010 by Devon Chappell
At this rate, Cryptologic Software may just find a place in the museum...

At this rate, Cryptologic Software may just find a place in the museum...

All I can say is Holy #%&*! When I checked out the news headlines today and saw that top-tier online casino software developer, Cryptologic, reported 2nd Quater losses of $12 million and $16 million in losses for 2010 thus far, my mouth dropped and those were the words that came out. God forgive me. Better yet, God, please forgive Cryptologic’s longtime, now-former CEO, Brian Hadfield, who announced his resignation along with the 2nd Quarter report.

And not that Hadfield personally needs to do any repentance. I don’t know, maybe he does. But to blame a single person for one company’s performance isn’t entirely fair. Mr. Hadfield certainly brought plenty to the table when we was appointed Director of the company little over three years ago and CEO just ten months thereafter. Playing an active management role at Unisys for over twenty years, Hadfield oversaw a workforce of 9,000 employees as Managing Director and grew the company’s revenue nearly a quarter to over $1 billion.

So ya, going from said success to a company which was already sort of in the danger zone, is a big change to say the least. Personally, if I was CEO of a company and had to explain a $16 million quarter loss, I’d probably step down as well. But then again, I guess Cryptologic hasn’t been doing that well for quite some time.

In my opinion, I think it was the passing of the UIGEA and the company’s decision to drop out of the U.S. market that put a major toll on the software developer. Also, other than Inter Casino, Cryptologic doesn’t have an impressive cadre of online casinos and wide area progressive jackpots as say Microgaming or Playtech.

More specifically, it was Cryptologic’s decision to focus on licensing it’s online casino software platform to third party operators, rather than creating an online casino platform of it’s own – a business model which Playtech Software has accomplished with great success – that several industry analysts have blamed Cyrptologic’s woes on. Even with clients the likes of Betfair, Ladbrokes, Paddy Power and Victor Chandler, not to mention a licensing agreement with Marvel and DC Comics (resulting in some impressive big-brand online slot machines), Cryptologic has remained in the red since 2007.

I mean, at this stage in the game, it really makes you wonder about all those anti-Cryptologic websites out there claiming the company is run by the Russian mafia. Why is Cryptologic reporting all these losses, while the rest of the industry (at least top-tier software developers) are still doing just fine? Why is Brian Hadfield really resigning from his post? Conscience gotten the best of him? Too much vodka breath, aka Russian mafia breathing down his back?

Conjecture aside, Cryptologic is a NASDAQ and London Stock Exchange-listed company and one of the “founding fathers” of the online gambling industry. The “propaganda” out there, however, could be having more of a negative impact than anyone would like to admit…other than those spreading it, of course.

As for the future fate of Cryptologic, that will be in the hands (on a interim basis) of Chairman, David Gavagan. In the meantime, the company plans on making cuts to its 200+ workforce, none of which will take place in the company’s Dublin-based headquarters, where roughly 20-30 employees still hold post.

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