Cryptologic Plans Centre

Published on: January 17, 2009 

Cryptologic, one of the most well known names in online gambling and poker gaming software and technology, is planning to expand their business by opening up a center designed to help them develop new and improved gaming technology that goes ‘beyond consoles and personal computers’.  The companies Chief Executive Brian Hadfield told Reuters, “We have partners and clients interested and we're speaking to universities worldwide - it should throw up some interesting things.  It (will be) a place where customers, partners, universities and others can participate in defining and guiding the future of e-gaming,” he added.

According to Hadfield, Cryptologic will be researching what type of uses the technology their company develops could be used with and he is looking forward to seeing the ‘full extent of opportunities’ that mobile technology and social websites could offer the company as online gambling continues to evolve and grow.  Already the mobile market has grown by leaps and bounds.  Cryptologic is also in the process of restructuring the company, a deal announced in October 2008, and is right on track with the restructuring.  The company’s shares have gained 19.5% which is a positive factor in today’s iffy economy.

The company is also on target for reducing their total operating costs of around $13 million on an annual basis by the second quarter of 2009.  They are going to be outsourcing their online poker network and have worked out a lucrative strategic partnership with GTECH Corporation that should be in place by the end of the first quarter of 2009.  According to Hadfield, “We looked at the business and asked ourselves "what are we good at?" And we're good at casino games and branded games.”  The new partnership with GTECH will allow players to gamble on the Boss Media International poker network, providing them with a wider customer base and more gaming competition.  The move will reduce costs for Cryptologic and turn their failing poker operation into a profitable venture.

Hadfield is confident that the company will return to profitability and cash generation after everything is in place in the second quarter.  He thinks that growth could be difficult this year, but feels that the strategy that has been set in place of adding new licensee revenue is going to help.  Already they have added 10 new licensees which include, GTS, and Partygaming.  The company’s restructuring is allowing them to predict cash generation growth for 2009 of $11 to $13 million with their net profit being between $9 and $10 million.  Hadfield is trying to remain prudent and generate realistic expectations for Cryptologic considering the downturn of the global economy in 2008.

“In the current climate cash is king," he said and the company currently has cash of between $42 million and $43 million.  However, Hadfield added if there is an acquisition that "adds value and strengthens operations" then he would look at it.

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