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Online Casino News - October, 2009

Cryptologic Posts Third Quarter Results; Remains Hopeful

 

  Seed Newsvine

by Edward Rogers, News Staff Writer

November 14, 2009

If anybody ever thought lucky gamblers couldn't put online casinos out of business, just take a look at UK-based Cryptologic Software. Well, maybe "going out of business" is something of an exaggeration, but the fact remains that Cryptologic still hasn't dug itself entirely out the non-profitability hole - and players certainly aren't helping.

According to Cryptologic's third quarter financial results, jackpot wins were above "historic levels", estimated to cause a $.6 million drop in revenues for the third quarter, which experienced an overall drop of 31% from $14 million in the third quarter 2008 to $9.6 million 3Q 2009. Online casino revenue was also in line with these figures, dropping 30% to $7.1 million compared to the third quarter of 2008.

Despite these disappointing figures, which Cryptologic forecasted would be the case in the second quarter 2009, net overall losses were halved from $6.7 in 2008, to $3.4 million in 2009. Although much of these savings were brought on by divesting its online poker network and the accompanying operational/maintenance costs, Cryptologic took a $2.7 million loss in poker revenue, even with a migration into the Boss poker network. Still, the decision to cut back poker operations saved the company badly needed revenue overall.

CEO, Brian Hadfield, said that even with a drop in revenue, which was largely blamed on a decreased wagering activity in August and a delayed roll-out of new games to online casino licensees, Cryptologic's business strategy is delivering tangible, positive results. In the third quarter alone, Cryptologic signed three multi-year licensing deals with some of the top brands in online gambling - BetSafe, ToteSport and Virgin Games.

With 80 new branded online casino games expected to be integrated live with new licensees by 2010, including the exclusively licensed DC Comics slots (Batman and Wonder Woman are now available at InterCasino), branded casino game revenue should continue to rise as it has thus far been doing in 2009. Third quarter's stats for branded games was at $.78 million, up from $.53 in Q2 and $.41 in the first quarter.

This trend, along with an increasing customer roster and lower operating cost base, says Hadfield, will be the key to bringing Cryptologic back to profitability in the near future.


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