Marginal Improvement from Cryptologic
Wednesday, August 17th, 2011
Toward the end of 2010, leading online gaming software provider Cryptologic reported a major decline in financial performance in addition to operational problems. As a result, the online gambling industry was put on alert as these announcements developed. However, Cryptologic recently announced the results of its financial performance from the second quarter of 2011. Although there has been no magical recovery, those with a vested interest in the provider will be relieved.
Financial Results for the Second Quarter
The financial results for the quarter ending June 30th, 2011 highlight an increase in revenue to $7 million from $6 million in the first quarter. However, the total expenses remained consistent at $6.5 million. Therefore, income prior to tax is $0.5 million compared to a loss in the first quarter. The company made an announcement that the Board of Directors is pleased with the performance and will continue to focus on improving revenues in the future while decreasing costs.
Small Reasons for the Increase in Revenue
The company further reported the reasons for an increase in revenue. Although small, there was a reduction in liabilities from the previous quarter as a result of a dispute with a supplier. Also, there was an upsurge in revenue from branded games. During the second quarter, six new branded slot games went live for a total of 185 revenue-generating online games. However, there was a loss in revenue from online poker.
Progressive Jackpot Win
click here to see most Popular PagesAnother highpoint from the second quarter was a progressive jackpot win of $4.2 million at Sky Vegas online casino. The result was a decreased provision for jackpot wins but also a decrease in cash and cash equivalents. Cryptologic directly pays out any progressive jackpot wins to avoid a player-casino dispute.
Update on Commercial Agreements
The financial announcement also gave an update on commercial agreements. Cryptologic has signed a binding agreement with a specific game supplier to continue their business relationship. However, the disagreement between the brand licensor and Cryptologic continues to be unresolved. Therefore, the online gambling community is anxious to learn the results of the review being conducted by Deloitte Corporate Finance which is ongoing.
Cryptologic appears to be making significant improvements from where it was several months ago. As it continues to release games and improve its financial results, the online gambling industry is following closely. Hopefully in the future, Cryptologic will revert back to the game-releasing, financial online gaming powerhouse it once was.



