Cryptologic Downsizes to
Merge Online Poker Network
by Margaret Oliveira, News Staff Writer
February 11, 2009
Since dropping out of the U.S. facing online gambling
industry, Ireland-based casino and poker software
developer, Cryptologic, had no choice but to reassess
its cash flow. Like most other gaming software
companies, the majority of their business at one point
came directly from the U.S., albeit indirect business
through its online casino and poker room licensees.
What made Cryptologic different from its competitors,
however, is that they began to move away from the U.S.
sector long before the other top-shelf software
providers did. In other words, it was as if they knew
the UIGEA was coming. Instead of further investing in
the U.S. market, Cryptologic began to form alliances and
expand in the European sector.
All of this has been taking shape for the last five
years. As early as October 2008, Cryptologic announced
it would be reducing its operating costs by $13 million
before the end of 2009. This would all get done
primarily via configuration changes to its poker
network, i.e. scaling down and forming more alliances.
One of these alliances will be with the GTECH
International Poker Network. Rather than running a
stand-alone poker network, Cryptologic hopes to cut down
operating costs while giving its poker players access to
an even larger network. Projected to be finished by
April of this year, the merged network will have
approximately 15,000 active poker players.
Further cutting costs, Cryptologic has also let go of
its Chief Technology Officer, Michael Starzynski.
Apparently, developing new technologies isn't so much of
a priority these days for the software developer (at
least the old model of technology development). But I
suppose if that's what it takes to get back on track -
"back on track" meaning making profit - investors
shouldn't have any objections. Cryptologic now reports
they are on track for generating profit after the second
quarter of 2009.