Cryptologic Casinonachrichten

[Casinonews]

CRYPTOLOGIC EXPANDS UK SHAREHOLDER BASE
Toronto, Canada - January 31, 2005.

CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today a placing through the facilities of the London Stock Exchange to a number of prominent UK institutional investors of an aggregate of 1,075,000 common shares in the company at a price of £12.50 per share (approximately Cdn$29.24), representing approximately 8% of the issued share capital.

The shares were purchased from Andrew Rivkin and Mark Rivkin, the founders and former CEO and COO respectively of the company from inception to 2000. The transaction was facilitated by Bridgewell Securities Limited of London, England, CryptoLogic's recently appointed UK corporate broker.

"We are delighted to have attracted blue chip UK institutional shareholders, and view their investment as a positive endorsement of CryptoLogic's growth strategy," said Lewis Rose, CryptoLogic's President and CEO. "The UK is emerging as the global centre for regulated online gaming, and the diversification of our shareholder base into this major market reflects our international expansion and should help enhance liquidity in the London market."

About CryptoLogic® (www.cryptologic.com)

Focused on integrity and innovation, CryptoLogic Inc. is the world's largest public online gaming software developer. The company's technologies enable secure, high-speed financial transactions over the Internet. CryptoLogic continues to develop state-of-the-art Internet software applications for both the electronic commerce and Internet gaming industries. WagerLogic Limited, a subsidiary of CryptoLogic, licenses its gaming software and services to customers worldwide. For more information on WagerLogic™, visit www.wagerlogic.com.

CryptoLogic's common shares trade on the Toronto Stock Exchange (symbol: CRY), on the Nasdaq National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).

For more information, please contact:

CryptoLogic, (416) 545-1455
Nancy Chan-Palmateer, Director of Communications

Argyle Rowland, 416-968-7311 (media)
Daniel Tisch, ext. 223 / dtisch@argylerowland.com
Melissa Chang, ext. 239 / melissa@argylerowland.com

[Casinonews]

RITZ CLUB LONDON EXTENDS WINNING RELATIONSHIP WITH CRYPTOLOGIC-DEVELOPED SOFTWARE

Renewal of multi-year, exclusive online casino and poker agreement with prominent UK customer

February 16, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that it has renewed and extended its relationship with one of the UK's leading gaming brands, The Ritz Club London Online (www.theritzclublondon.com). The Ritz Club London has committed to a multi-year contract with CryptoLogic's subsidiary, WagerLogic Limited, and will continue to use the software provider's proven online casino and poker offerings exclusively during the term of the agreement.

"CryptoLogic's strategy is to do business with the best of the best in global gaming - and we're proud to have earned the continuing confidence of a top UK gaming brand to drive our organic growth," said Lewis Rose, CryptoLogic's President and CEO. "On land or online, The Ritz Club London is a prestigious company, and we are delighted to reaffirm and build on our relationship to deliver a safe, secure and enjoyable online gaming experience for their players around the world."

The Ritz Club London Online has been a customer since 2002, and has used WagerLogic's state-of-the art software to establish a successful online casino in Alderney, one of the world's most highly regulated jurisdictions. The relationship continued to grow in 2004, when the Ritz Club expanded its game offering by launching an online poker product designed and developed by CryptoLogic and licensed in the Netherlands Antilles.

"CryptoLogic continues to be the Ritz Club's developer of choice - and their interactive gaming technology is second to none," said Malcolm Graham, Managing Director, The Ritz Club London Online. "CryptoLogic's proven expertise and high standards have enabled us to grow a profitable business in the major growth areas of online casino and poker gaming, which is why we have renewed our agreement with WagerLogic."


About The Ritz Club London (www.theritzclublondon.com)
The Ritz Club London is the essence of fine gaming and part of the rich Ritz heritage that dates back to 1906. Situated in the former ballroom of London's historic Ritz Hotel, the prestigious and exclusive club appeals to the true connoisseur of luxury and elegance. The Ritz Club London places great emphasis on ensuring that the highest standards of operating procedures are constantly upheld. The brand and reputation of The Ritz Club London are important factors in maintaining its international and loyal following amongst its members.

The Ritz Club London Online is a wholly-owned subsidiary of The Ritz Club London, established to pursue online, wireless and interactive television-related gaming activity.

[Casinonews]

CRYPTOLOGIC DECLARES QUARTERLY DIVIDEND

February 16, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that its Board of Directors has declared the company's quarterly dividend of US$0.05 per common share. The dividend will be paid on March 15, 2005 to shareholders of record as at March 8, 2005.



TEL (416) 545-1455 FAX (416) 545-1454
1867 YONGE STREET, 7TH FLOOR, TORONTO, CANADA M4S 1Y5
w w w . c r y p t o l o g i c . c o m

FOR IMMEDIATE RELEASE
Symbol: TSX: CRY; NASDAQ: CRYP; LSE: CRP
CRYPTOLOGIC ACHIEVES RECORD REVENUE & EXCELLENT EARNINGS IN 2004

Fourth quarter revenue up 33%, earnings up 25%
Focused strategy delivers “blue-chip” results, global strength in online casino and poker
February 18, 2005 (Toronto, ON) – CryptoLogic Inc., a leading software developer to the global Internet
gaming market, announced today its financial results for the fourth quarter and year ended December 31,
2004. Record revenue, excellent earnings and healthy operating cash flow in 2004 are evidence of the
company’s focused strategy and growth momentum in both the casino and poker segments of the global
online gaming market.

“CryptoLogic continues to be the blue-chip e-gaming software company, with a winning hand in both the
thriving online casino and poker markets,” said Lewis Rose, CryptoLogic’s President and CEO. “2004
marked another year of revenue growth, profitability and cash generation for CryptoLogic. In 2005, we
will continue to capitalize on our strong financial performance to invest for the future, build on our market
strength and continue to drive profitable returns.”

Financial Highlights
(in millions of US dollars, except per share data)
Three months ended
December 31,
Years ended
December 31,
2004 2003 2004 2003
Revenue $17.9 $13.5 $63.7 $44.2
Earnings $3.8 $3.0 $13.7 $9.4
Earnings per diluted share $0.27 $0.23 $1.01 $0.75
Highlights for the fourth quarter included:
• Fourth quarter earnings grew to $0.27 per diluted share, ahead of analysts’ average forecast and the
2003 fourth quarter of $0.23. Fiscal 2004 full year earnings were also strong at $1.01 per diluted share
on a 44% increase in revenue to a record $63.7 million;
• Consistent cash generation led to the previously announced 67% increase in the quarterly dividend to
$0.05 per share;
• Online poker fees rose by more than 165% over the same previous year quarter, and accounted for over
20% of Q4 2004 revenue. Internet casino revenue grew 15% from the fourth quarter of 2003;
• International diversification remained strong, with overseas markets exceeding 60% of licensees’
revenue for the year, up from over 55% in 2003; and
• Subsequent to year-end, the company renewed and extended its multi-year, exclusive agreement with
an existing UK licensee, The Ritz Club London Online, for both online casino and poker solutions
developed by CryptoLogic.


-2-
Strong 2004 Financial Performance (All figures are expressed in US dollars)
CryptoLogic posted record revenue and excellent earnings for the fourth quarter ended December 31, 2004.
The first and fourth quarters are typically the strongest periods as players tend to spend more time indoors
during the winter and fall seasons. Revenue rose 33% to $17.9 million (Q4 2003: $13.5 million).
EBITDA(1) for the quarter grew 25% to $4.7 million (Q4 2003: $3.8 million). EBITDA(1) margin for the
quarter was 26% as a percentage of revenue, despite higher investments to drive long term returns (Q4
2003: 28%). Earnings for Q4 2004 rose 25% to $3.8 million or $0.27 per diluted share (Q4 2003: $3.0
million or $0.23 diluted share).

The fourth quarter results reflected strong organic growth from existing customers, recently launched poker
licensees, new casino games and product enhancements. The introduction of poker tournament
capabilities, an expanding poker clientele, and increased system scalability translated into rising online
poker fees. The company’s poker customers also benefited from the success of their first land-based poker
tournament, the Caribbean Poker ClassicÔ, which was televised and a great marketing draw for players.
An expanded casino game portfolio, particularly in the popular slot category, helped growth in Internet
casino revenue.

Revenue for the year ended December 31, 2004 increased by 44% to $63.7 million (2003: $44.2 million).
EBITDA(1) for fiscal 2004 rose by 51% to $17.3 million (2003: $11.5 million). This translated into
EBITDA(1) margin for the year rising to 27% (2003: 26%) despite increased investments, which are already
producing early returns. Earnings for the full year improved by 45% to $13.7 million or $1.01 per diluted
share (2003: $9.4 million or $0.75 per diluted share).
In the second half of 2004, CryptoLogic announced and embarked upon a major investment program,
which is over and above its normal course expenditures, to support long term growth. Approximately 70%,
or $7.1 million, of this program was invested in 2004. Most of the remaining 30% balance will be
completed in the first half of 2005. In 2004, these expenditures included $2.6 million in operating costs
and $4.5 million in capital expenditures (comprising $3.2 million for the purchase of capital assets and $1.3
million in capitalized software development costs related to the investment program).
Balance Sheet Strength

CryptoLogic continued to add to its strong balance sheet. At December 31, 2004, the company had no
debt, and total cash grew to $86.0 million or a cash value of $6.33 per diluted share (comprising cash and
cash equivalents, short term investments, and including security deposits of $7.0 million). Working capital
grew to $62.8 million or $4.62 per diluted share.
Operating cash flow for the fourth quarter of 2004 was $9.0 million (Q4 2003: $7.7 million). For fiscal
2004, operating cash flow was $18.9 million (2003: $38.7 million). The year-over-year decline related
primarily to increased receivables in 2004 resulting from two licensees assuming responsibility for their
own e-cash processing. In addition, cash generated from operations was exceptionally high in 2003 due to
more favourable security deposit arrangements beginning that year and the timing of accounts payable.
Increased Quarterly Dividend

On November 4, 2004, CryptoLogic’s Board approved a 67% increase in the company’s quarterly dividend
to US$0.05 per common share or an annual rate of US$0.20 (up from US$0.03 per share each quarter),
reflecting the company’s consistent earnings and cash generation. The increased rate began with the
quarterly dividend paid on December 15, 2004.
On February 16, 2005, the Board declared the company’s quarterly dividend of US$0.05 per share, payable
on March 15, 2005 to shareholders of record as at March 8, 2005. CryptoLogic continues to be one of the
few software companies with a regular dividend policy – a sign of its financial strength.


-3-
Internationally Diversification
CryptoLogic has established an internationally diversified business. In 2004, more than 60% of licensees’
revenue was derived from international players, up from over 55% in 2003 and 40% in 2002 . The UK and
Continental Europe remain the company’s key geographic focus, having grown to more than 30% and 20%
respectively of licensees’ overall revenue.

CryptoLogic continues to work with some of the most prominent international gaming brands. Subsequent
to the year-end, in February 2005, The Ritz Club London Online renewed and extended a multi-year
contract with CryptoLogic’s subsidiary, WagerLogic Limited, to continue to use the company’s online
casino and poker offerings exclusively during the term of the agreement.
Market-Oriented Solutions

CryptoLogic continued to deliver profitable growth in both its core casino and the burgeoning online poker
areas. The company further expanded its online casino suite – launching more than 30 new choices of the
most popular table and slot games in 2004, which helped grow Internet casino revenue by 15% in Q4 2004
over a year ago. CryptoLogic continued to demonstrate its reputation for innovation by being the first to
bring “Fruit Machine” style slots, a UK pub favourite, to the Internet.

CryptoLogic is also building a strong presence in the global online poker segment. Enhanced tournament
capabilities, increased system scalability and the growing momentum of brand name poker licensees have
all contributed to a more than 165% rise in online poker fees in Q4 2004 over a year ago. Online poker
accounted for over 20% of total Q4 revenue, ahead of CryptoLogic’s target of 15% for the year. Today,

CryptoLogic-developed software powers one of the top five revenue-generating poker rooms on the Web,
according to PokerPulse, an independent industry research website.
Management Team

During the fourth quarter, CryptoLogic appointed Andrew Goetsch as Vice President of Poker Software
Development. As a senior executive with more than 20 years experience in strategic planning, technology,
finance and mergers and acquisitions, Goetsch helped increase sales and profits for consumer goods and
manufacturing companies. He obtained his Certified Public Accountant Designation at one of the big
accounting firms. As a seasoned executive and accomplished poker player – including several final table
appearances, and more than 200 "in the money" finishes in poker tournaments held both online and around
the world, including the main event in the 2004 World Series of Poker – Goetsch’s extensive expertise will
help the company continue the growth and development of its software product plans in Internet poker.
Outlook

CryptoLogic’s focused strategy and investment in key markets and fast-growing product segments have
continued to translate into revenue growth, solid earnings and positive cash flow, notwithstanding a
competitive online gaming industry marked by US regulatory uncertainty. By remaining disciplined in its
execution, CryptoLogic will build on its positive momentum into 2005. Revenue in the traditionally strong
first quarter is forecast to range from $19.0-$19.4 million, with earnings of $4.1-$4.3 million or $0.29-
$0.30 per diluted share.
Given CryptoLogic’s revenue generation and financial strength, Management believes this is the best time
to invest for growth in both its core casino and poker businesses. CryptoLogic will continue its major
capital investment program largely in the first half of 2005, substantially enhancing its game offerings,
infrastructure, scalability, customer care and back-office systems – all to secure continued global leadership
in the major segments of the online gaming market, and intended to enhance returns in the near and long
term.

[Casinonews]

(Fortsetzung)

-4-
2004 Fourth Quarter and Year End Analyst Call
A conference call is scheduled for 8:30 a.m. (EST) (1:30 p.m. GMT) on Friday, February 18, 2005.
Interested parties should call either 416-695-5259, 1-877-888-3490 (North America) or international toll
free number at (Country Code) 800-4222-8835. Instant replay will be available until February 25, 2005 by
calling 416-695-5275 or 1-866-518-1010.

About CryptoLogic (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is the world’s largest public online gaming software
developer and supplier. Its leadership in regulatory compliance makes it one of the very few companies
with gaming software that is certified to strict standards similar to land-based gaming. WagerLogic
Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software
and services to customers worldwide. For information on WagerLogic
, visit www.wagerlogic.com.
CryptoLogic’s common shares trade on the Toronto Stock Exchange (symbol: CRY), on the Nasdaq
National Market (symbol: CRYP), and on the Main Market of the London Stock Exchange (symbol: CRP).
(1) Management believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is a useful supplemental measure of performance.

However, EBITDA is not a recognized earnings measure under generally accepted accounting principles (GAAP) and does not have a standardized meaning. Therefore, EBITDA may not be comparable to similar measures presented by other companies.

For more information, please contact:
CryptoLogic, (416) 545-1455 Argyle Rowland, (416) 968-7311 ( Media)
Nancy Chan-Palmateer, Director of Communications Daniel Tisch, ext. 223/ dtisch@argylerowland.com
Jenifer Cua, Interim Chief Financial Officer Karen Passmore, ext. 228/ kpassmore@argylerowland.com

CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, risks associated with the Company’s financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company’s
filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking
statements.

-5-
CRYPTOLOGIC INC. CONSOLIDATED BALANCE SHEETS (In thousands of US dollars)

As at
December 31,
2004
(unaudited)
As at
December 31,
2003
(audited)
ASSETS
Current assets:
Cash and cash equivalents $43,182 $44,010
Security deposits 7,000 6,550
Short term investments 35,782 16,747
Accounts receivable and other 6,487 2,389
Prepaid expenses 1,754 1,163
94,205 70,859
User funds on deposit 18,908 9,394
Capital assets 9,227 3,915
Intangible assets 106 122
Goodwill 1,776 1,776
$124,222 $86,066
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $30,056 $25,063
Income taxes payable 1,331 1,063
31,387 26,126
User funds held on deposit 18,908 9,394
Future taxes 1,840 --
52,135 9,394
Shareholders’ equity:
Capital stock 20,380 11,350
Stock options 1,114 438
Retained earnings 50,593 38,758
72,087 50,546
$124,222 $86,066

CRYPTOLOGIC INC. CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (In thousands of US dollars)
For the three months
ended December 31,
For the years
ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
Retained earnings, beginning of period
$47,463
$36,450
$38,758
$30,376
Earnings 3,794 3,033 13,668 9,441
Dividends paid (664) (369) (1,833) (369)
Registration costs -- (356) -- (690)
Retained earnings, end of period $50,593 $38,758 $50,593 $38,758

-6-
CRYPTOLOGIC INC. CONSOLIDATED STATEMENTS OF EARNINGS (In thousands of US dollars, except per share information)
For the three months
ended December 31,
For the years
ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
Revenue
$17,949
$13,540
$63,714
$44,211
Expenses
Operating costs 11,349 8,371 39,975 27,204
General and administrative 1,773 1,296 6,028 5,161
Finance 88 91 374 350
Amortization 674 474 2,089 1,533
13,884 10,232 48,466 34,248
Earnings before undernoted 4,065 3,308 15,248 9,963
Interest income 426 160 1,293 691
Earnings before taxes 4,491 3,468 16,541 10,654
Income taxes 697 435 2,873 1,213
Earnings $3,794 $3,033 $13,668 $9,441
Earnings per share
Basic $0.29 $0.25 $1.05 $0.77
Diluted $0.27 $0.23 $1.01 $0.75
Weighted average number of shares (‘000s)
Basic 13,185 12,280 12,971 12,245
Diluted 13,871 12,972 13,586 12,604

-7-
CRYPTOLOGIC INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands of US dollars)
For the three months
ended December 31,
For the years
ended December 31,
2004 2003 2004 2003
(unaudited) (unaudited) (unaudited) (audited)
Cash provided by (used in):
Operating activities:
Earnings $3,794 $3,033 $13,668 $9,441
Adjustments to reconcile earnings to
cash provided by (used in) operating activities:
Amortization 674 474 2,089 1,533
Future taxes 444 -- 1,840 --
Gain on sale of investment -- -- -- (31)
Stock options 337 148 1,200 438
Changes in operating assets and liabilities:
Security deposits -- (1,000) (450) 9,190
Accounts receivable and other 872 (2,016) (4,098) (729)
Prepaid expenses 42 57 (591) (246)
Accounts payable and accrued liabilities 2,628 6,770 4,993 17,458
Income taxes payable 181 243 268 1,646
8,972 7,709 18,919 38,700
Financing activities:
Issue of capital stock 2,343 360 8,506 630
Registration costs -- (356) -- (690)
Dividends paid (664) (369) (1,833) (369)
1,679 (365) 6,673 (429)
Investing activities:
Purchase of capital assets, net of disposals (1,749) (349) (7,296) (2,618)
Purchase of intangible assets -- (5) (89) (13)
Short term investments 9,840 (3,657) (19,035) (5,890)
Sale of investment -- -- -- 711
Investment in subsidiary -- (111) -- (111)
8,091 (4,122) (26,420) (7,921)
Increase (decrease) in cash and cash equivalents 18,742 3,222 (828) 30,350
Cash and cash equivalents, beginning of period 24,440 40,788 44,010 13,660
Cash and cash equivalents, end of period $43,182 $44,010 $43,182 $44,010

-8-
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As at December 31, 2004
(All figures are in thousands of US dollars, except per share disclosure and where otherwise indicated)
(Unaudited)
These consolidated interim financial statements of CryptoLogic Inc. (the “Company”) have been prepared in
accordance with Canadian generally accepted accounting principles (GAAP) using the same accounting policies as
were used for the audited consolidated financial statements for the year ended December 31, 2003. These
consolidated interim financial statements do not contain all annual disclosures required by GAAP and, as such, should
be read in conjunction with the audited consolidated financial statements, including the notes thereto, for the year
ended December 31, 2003, as set out in the 2003 Annual Report.
1. Stock Option Plan
In accordance with the guidelines of the Canadian Institute of Chartered Accountants, the Company has expensed the
costs of all stock option grants issued on or after January 1, 2003. The fair value of the options granted in 2003 and
2004 was made using the Black-Scholes option pricing model under the following weighted assumptions:
2004 2003

Dividend yield 0.75% 0.75%
Risk-free rate 2.75% 2.75%
Expected volatility 50.0% 50.0%
Expected life of options in years 5.0 5.0
The estimated fair value of options is recorded over the vesting period of the options. The cost of stock options is included in operating costs. Consideration paid by employees on the exercise of stock options is credited to share capital.

The impact of expensing stock options on earnings is as follows:
Three months ended Years ended
December 31, 2004 December 31, 2003 December 31, 2004 December 31, 2003
(‘000) (‘000) (‘000) (‘000)
Stock options expense $337 $148 $1,200 $438
Stock options expense (per share):
Basic $0.03 $0.01 $0.09 $0.03
Diluted $0.02 $0.01 $0.09 $0.03

-9-
1. Stock Option Plan (continued)

For the year ended December 31, 2002, no compensation cost was recorded on the grant of stock options during that year. In accordance with the transitional provisions of the accounting guideline, additional pro forma disclosure is presented as if the fair value method of accounting had been used to account for stock options. The fair value of the options granted was made using the Black-Scholes option pricing model under the following weighted assumptions:

2002
Dividend yield --
Risk-free rate 2.0%
Expected volatility 100.0%
Expected life of options in years 5.0
Had compensation expense been determined based on the fair value of the employee stock option awards for 2002
grants at the grant dates in accordance with the new recommendations, the Company’s earnings and earnings per share
would have been changed to the following pro forma amounts:
Three months ended
December 31,
Years ended
December 31,
2004 2003 2004 2003
As
reported
Pro forma
As
reported
Pro forma
As
reported
Pro forma
As
reported
Pro forma
(‘000) (‘000) (‘000) (‘000) (‘000) (‘000) (‘000) (‘000)
Earnings $3,794 $3,662 $3,033 $2,849 $13,668 $13,090 $9,441 $8,706
Earnings per share:
Basic $0.29 $0.28 $0.25 $0.23 $1.05 $1.01 $0.77 $0.71
Diluted $0.27 $0.26 $0.23 $0.22 $1.01 $0.96 $0.75 $0.69
2. Capital Stock
Authorized:
Unlimited common shares
Issued and Outstanding:
Common Shares Series F Warrants Total
In thousands Issued Stated Value Issued Stated Value Stated Value
Balance, December 31, 2002 12,206 $10,448 30 $272 $10,720
Exercise of stock options 94 630 -- -- 630
Balance, December 31, 2003 12,300 $11,078 30 $272 $11,350
Balance, December 31, 2003 12,300 $11,078 30 $272 $11,350
Exercise of stock options 1,011 9,030 -- -- 9,030
Balance, December 31, 2004 13,311 $20,108 30 $272 $20,380
3. Normal Course Issuer Bid
In September 2004, the Board of Directors approved a share repurchase plan, under a Normal Course Issuer Bid, to
repurchase and cancel up to 1,250,000 of the Company’s outstanding common shares for the period commencing
September 23, 2004 and ending September 22, 2005. As at December 31, 2004, the Company has not repurchased
any shares.
4. Comparative Figures
Certain of the prior year’s figures have been reclassified for consistency with the current presentation, and reflect the
expensing of stock options effective January 1, 2003.

[Cabo]

CRYPTOLOGIC ADDED TO S&P/TSX COMPOSITE INDEX

March 21, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that the company has joined the S&P/TSX Indices effective the close of business on Friday, March 18, 2005. Standard & Poor's has added CryptoLogic to the main S&P/TSX Composite Index and to the S&P/TSX SmallCap Index in the information technology sector.

"We are delighted that CryptoLogic has been included in the S&P/TSX Composite Index," said Lewis Rose, CryptoLogic's President and CEO. "Our addition to this premier benchmark for the Canadian equity markets reflects CryptoLogic's market strength and exciting growth."

[Cabo]

CRYPTOLOGIC UNVEILS SIX-SEATED POKER TABLE TOURNAMENT SOFTWARE ENHANCEMENT

New SIXPAK™ tournament capability offers online players exciting "final table" action in every hand

March 31, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, released a new software enhancement that gives online poker players exciting "final-table" action throughout an entire tournament event. The company's new six-person per table tournament capability, offered through its WagerLogic subsidiary, has been branded SIXPAK™: Short-handed Internet X-citement.

"Being at the final table of a major tournament is every player's dream, and now CryptoLogic's software can help online players live that dramatic "final-table" experience - in every hand," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic's new SIXPAK™ feature helps enhance licensees' tournament strategy, expand their poker offering, and provide their players with a great primer for their next major online or land-based tournament."

Players can join in the SIXPAK™ action and build up their skills for "final-table" finishes at some of the world's top Internet gaming sites, including williamhillpoker.com, betfairpoker.com, interpoker.com, littlewoodspoker.com, classicpoker.com, ukbettingpoker.co.uk, theritzclublondon.com, sunpoker.com, totalbetpoker.co.uk, and pokerplex.com.

"Tournaments are a huge marketing draw, and players love the excitement of the final table - CryptoLogic's new SIXPAK™ tournament software is taking that excitement up a notch," said Andy Goetsch, CryptoLogic's Vice President, Poker Software Development. "SIXPAK™ events play as if you are at the final table from beginning to end, which will get the hearts of online players beating just a little faster."

CryptoLogic's new six-seated poker tournament feature is the latest enhancement to its software that powers one of the top five revenue-generating poker sites in the world, according to PokerPulse.com, an independent research site. Its licensees' central poker room attracts more than 5,400 simultaneous online players from more than 120 countries, with a total average cash pot of $18 million won daily and 200,000 hands of poker dealt daily.

The Internet poker industry has grown dramatically, and the global market is at an annual run rate of $2 billion today - up from $100 million just two plus years earlier. CryptoLogic is advancing its market leadership in online poker by investing in strong partnerships with trusted, brand name licensees, and in product development and system scalability to the meet the needs of the online players.

[Cabo]

NOTICE OF OWNERSHIP INTEREST IN CRYPTOLOGIC
April 6, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced that on April 5, 2005 it received notification from Royce & Associates, a US investment fund, that the fund's interest in CryptoLogic was 523,758 common shares or approximately 4% of the Company's current shares outstanding.

About CryptoLogic® (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is the world's largest public online gaming software developer and supplier. Its leadership in regulatory compliance makes it one of the very few companies with gaming software that is certified to strict standards similar to land-based gaming. WagerLogic Limited, a wholly-owned subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to an internationally-recognized blue chip customer base worldwide. For information on WagerLogic®, visit www.wagerlogic.com.


NACHRICHT DES EIGENTUMSANTEILS AN CRYPTOLOGIC

April 6, 2005 (Toronto, AN) - CryptoLogic Inc., ein führender Software-Entwickler zum globalen Internet-Spielmarkt, verkündet, daß an April 5, 2005 er Mitteilung von Royce u. von den Teilnehmern, eine US-Investitionkapital empfing, daß das Interesse der Kapitals an kryptologischem 523.758 allgemeine Anteile oder ungefähr 4% der gegenwärtigen ausgegebenen Aktien der Firma war.

Ungefähr konzentrierte CryptoLogic® (www.cryptologic.com) auf Vollständigkeit und Innovation, CryptoLogic Inc. ist der Spiel-Software-Entwickler und -lieferant der Welt größte allgemeine on-line-.

Seine Führung in der regelnden Befolgung bildet es ein von den sehr wenigen Firmen mit Spiel-Software, die zu den strengen Standards bestätigt wird, die land-based Spiel ähnlich sind. WagerLogic, das, eine vollständig-besessene Tochtergesellschaft von kryptologischem begrenzt wird, ist für das Genehmigen seiner Spiel-Software und -dienstleistungen zu einem international-anerkannten Blue Chip Kundenbestand weltweit verantwortlich. Zu Information über WagerLogic®, Besuch www.wagerlogic.com.

[Cabo]

CRYPTOLOGIC WELCOMES NEW UK LAW TO REGULATE ONLINE GAMING

April 8, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, today welcomed the passage of the revised Gambling Act 2005 in the United Kingdom, one of the company's premier markets. The Act received Royal Assent yesterday and will enable the regulation of Internet gaming for the first time in the UK.

"This new law marks a key milestone for online gaming - and we welcome the decision of the UK government to shine the light on the industry to allow it to thrive in a regulated and licensed environment," said Lewis Rose, CryptoLogic's President and CEO. "CryptoLogic has long advocated a regulated online gaming market - for the protection of players and the integrity of the industry. We applaud the UK for taking the lead in establishing world-class standards for the safe, secure and responsible use of this form of entertainment."

Now that the Act has become law, there remains considerable work to be done to fully define the legislation. The next step is for the new Gambling Commission to be established. The rules and regulatory framework governing online gaming in the UK need to be clearly developed and finalized. The first applications are expected to be accepted in 2006, with licenses granted and the regulatory regime in full operation by 2007.


CryptoLogic, through its licensing subsidiary WagerLogic, counts among its customers an enviable list of major UK gaming brands, including William Hill, Betfair, The Ritz Club London, Littlewoods Gaming and ukbetting. The company's gaming software, senior management and directors have already passed the world's highest regulatory tests in "tier one" jurisdictions -- and CryptoLogic is one of the very few providers in the world to do so.



CRYPTOLOGIC BEGRÜSST DAS NEUE BRITISCHE GESETZ ZUR REGULIERUNG DES ONLIN-SPIELS

April 8, 2005 (Toronto, AN) - CryptoLogic Inc., ein führender Software-Entwickler zum globalen Internet-Spielmarkt, begrüßte heute den Durchgang der korrigierten Spielentat 2005 im vereinigten Königreich, einer der Premiermärkte der Firma.

Die Tat empfing königliche Einwilligung gestern und wird der Regelung des Internet-Spiels zum ersten Mal in Großbritannien ermöglichen. "dieses neue Gesetz kennzeichnet einen Schlüsselmeilenstein für on-line-Spiel - und wir begrüßen die Entscheidung der BRITISCHEN Regierung, um das Licht auf der Industrie zu glänzen, um sie in reguliert vorwärtskommen zu lassen und genehmigtes Klima,", sagte Lewis Rose, kryptologischer Präsident und CEO. "kryptologisch hat lang einen regulierten on-line-Spielmarkt - für den Schutz der Spieler und der Vollständigkeit der Industrie befürwortet.
Wir applaudieren Großbritannien für das Nehmen der Leitung, wenn wir herstellen Welt-Kategorienstandards für den sicheren, sicheren und verantwortlichen Gebrauch von dieser Form der Unterhaltung.",

Nun da die Tat gewordenes Gesetz hat, bleibt die beträchtliche, um die Gesetzgebung völlig zu definieren zu tuende Arbeit. Der folgende Schritt ist, damit die neue spielende Kommission hergestellt werden kann. Die Richtlinien und der regelnde Rahmen, der on-line-Spiel in der BRITISCHEN Notwendigkeit, offenbar sich zu entwickeln und beendet zu werden regelt.

Die ersten Anwendungen werden erwartet, 2006 angenommen zu werden, mit Lizenzen bewilligt worden und dem regelnden Regime im vollen Betrieb bis 2007. Kryptologisch, durch sein genehmigendes TochterWagerLogic, brennt Zählimpulse unter seinen Kunden eine enviable Liste des BRITISCHEN hauptsächlichspiels, einschließlich William Hill, Betfair, Ritz Club London, Littlewoods Gaming und des Ukbettings ein. Der Spiel-die Software Firma, das ältere Management und die Direktoren haben bereits die höchsten regelnden Tests der Welt in den Jurisdiktionen "der Reihe eine" geführt -- und ist einer der sehr wenigen Versorger in der Welt zum so Tun kryptologisch.

[Cabo]

CRYPTOLOGIC SUBSIDIARY SECURES EXCLUSIVE 'BEJEWELED' LICENSE

E-gaming software leader to bring slot-version of popular game to the Internet for the first time
May 9, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that its subsidiary, WagerLogic Limited, has signed an exclusive five-year agreement for the Internet rights to the slot version of Bejeweled - a wildly popular game with online players. WagerLogic will be the first and only gaming provider to bring a play-for-real, 10-line slot variation of this globally renowned, fast-paced gem-matching game to the Internet as part of a new version of its casino software targeted for release this autumn.

"Bejeweled is loved by players worldwide - and now it's one of the many gems in CryptoLogic's growing suite of exciting online casino games," said Lewis Rose, CryptoLogic's President and CEO. "As the first and only gaming developer to offer this exceptionally popular game in a play-for-real, slot version for the Internet, CryptoLogic is again providing our customers with market-tested products that deliver great entertainment to their players."

Bejeweled, called "the best puzzle game since Tetris," is the creation and flagship product of PopCap Games. According to the company, more than 50 million people have played Bejeweled since it was released in 2000, and it has sold over a million units across multiple channels, while garnering multiple Game of the Year and Hall of Fame awards. Bejeweled continues to be one of the most popular titles on AOL, MSN, and Yahoo! and with cell phone customers of Cingular, Sprint, and Verizon.

"New product innovation is a key growth driver in the online casino market, and WagerLogic is excited to add the highly popular Bejeweled game to our expanding slot portfolio," added A.J. Slivinski, WagerLogic's Managing Director.

CryptoLogic is strengthening its market leadership in the estimated $12 billion global online gaming industry by developing an expanding range of market-targeted products for the major online casino and poker markets, increasing system capacity to accommodate rapid growth and player demand, and working with many of the world's most trusted gaming brands.





KRYPTOLOGISCHE TOCHTERGESELLSCHAFT SICHERT EXKLUSIVE ' BEJEWELED-' LIZENZ

E-Spiel-Software-Führer, um Slots-Version des populären Spiels zum Internet Mai 9, 2005 zum ersten Mal zu holen (Toronto, AN)

CryptoLogic Inc., ein führender Software-Entwickler zum globalen Internet-Spielmarkt, hat heute verkündet, daß seine Tochtergesellschaft, begrenztes WagerLogic, einen exklusiven Fünfjahresvertrag für die Internet-Rechte zur Slotmachinesversion von Bejeweled geschlossen hat - ein wild populäres Spiel mit on-line-Spielern. WagerLogic ist das erste und nur der Spielversorger zum Holen ein Spiel-für-reales, Veränderung der 10-line Slot Version dieses global renowned, schnell-geschrittenen Edelstein-zusammenpassenden Spiels zum Internet als Teil einer neuen Version seiner casino-Software, die für Freigabe dieser Herbst gezielt wird. "Bejeweled ist liebte durch Spieler weltweit - und jetzt ist es einer der vielen Edelsteine im kryptologischen wachsenden Suite der aufregenden on-line-casinospiele,", sagte Lewis Rose, kryptologischer Präsident und CEO. "als das erste und nur der Spielentwickler, dieses außergewöhnlich populäre Spiel in einem Spiel-für-realem, die Slotversion für das Internet versieht anzubieten, CryptoLogic wieder unsere Kunden mit Markt-geprüften Produkten, die liefern große Unterhaltung an ihre Spieler.", Bejeweled, genannt "das beste Puzzlespielspiel seit Tetris," ist das Kreations- und Flaggschiffprodukt der Spiele PopCap. Nach Ansicht der Firma haben mehr als 50 Million Leute Bejeweled gespielt, seit es 2000 freigegeben wurde, und es hat über Million Maßeinheiten über mehrfachen Führungen, beim Garnering mehrfaches Spiel des Jahres und des Halls der Ruhmpreise verkauft. Bejeweled fährt fort, einer der populärsten Titel auf AOL, MSN und Yahoo zu sein! und mit Zellentelefonkunden von Cingular, von Sprint und von Verizon. "neue Produktinnovation ist ein Schlüsselwachstumtreiber im on-line-casinomarkt, und WagerLogic wird aufgeregt, um das in hohem Grade populäre Spiel Bejeweled unserer erweiterten Spielautomaten Angebotspalette hinzuzufügen," addiertes A.J. Slivinski, WagerLogics geschäftsführender Geschäftsführer. CryptoLogic verstärkt seine Marktführung in den geschätzten $12 Milliarden globalen on-line-Spielindustrie indem das Entwickeln einer erweiternstrecke der Markt-gerichteten Produkte für die Haupton-line-casino- und Pokermärkte, erhöht die Systemkapazität, schnelle Wachstum- und Spielernachfrage unterzubringen, und arbeitet mit vielen der verläßlichsten Spielmarken der Welt.

[Cabo]

CRYPTOLOGIC DECLARES QUARTERLY DIVIDEND

May 10, 2005 (Toronto, ON) - CryptoLogic Inc., a leading software developer to the global Internet gaming market, announced today that its Board of Directors has declared the company's quarterly dividend of US$0.05 per common share. The dividend will be paid on June 15, 2005 to shareholders of record as of June 8, 2005.



TEL (416) 545-1455 FAX (416) 545-1454
1867 YONGE STREET, 7TH FLOOR, TORONTO, CANADA M4S 1Y5
w w w . c r y p t o l o g i c . c o m
NEWS FOR IMMEDIATE RELEASE
Symbol: TSX: CRY; NASDAQ: CRYP; LSE: CRP
ALL FINANCIAL FIGURES ARE IN US$
CRYPTOLOGIC DELIVERS RECORD REVENUE & STRONG EARNINGS GROWTH IN Q1 2005
First quarter revenue up 33%, earnings up 27%
Disciplined execution, strategic investments drive “blue-chip” performance in both poker and casino
May 11, 2005 (Toronto, ON) – CryptoLogic Inc., a leading software developer to the global Internet
gaming market, announced today its financial results for the first quarter ended March 31, 2005. Record
revenue, strong earnings and positive operating cash flow generation reflected continued growth in the
company’s primary Internet casino and poker markets.
“CryptoLogic’s excellent start to 2005 reaffirms our position as the blue-chip e-gaming software
company,” said Lewis Rose, CryptoLogic’s President and CEO. “CryptoLogic is clearly benefiting from
its investment in growth, and we will continue to invest in order to maximize returns at this exciting time
in our industry. The landmark legislation to regulate Internet gaming in the UK for the first time is further
evidence of the global potential and growing acceptance that this industry is here to stay.”
Financial Highlights
(in millions of US dollars, except per share data)
Three months ended
March 31,
2005 2004
Revenue $20.3 $15.2
Earnings $4.8 $3.8
Earnings per diluted share $0.34 $0.28
Fiscal 2005 first quarter highlights included:
· Quarterly revenue grew 33% to $20.3 million, and earnings grew 27% over Q1 2004 to $4.8 million
or $0.34 per diluted share. This exceeded analysts’ average consensus of $0.30 per diluted share;
· Internet poker fees derived from its WagerLogic subsidiary rose by more than 200% over Q1 2004,
and accounted for over 25% of Q1 2005 revenue. Continued growth from Internet poker licensees
and poker tournament software enhancements contributed to these strong results;
· The central poker room shared by WagerLogic licensees now attract more than 6,000 simultaneous
live online players, and is one of the world’s top 5 revenue generating poker sites on the Internet;
· Internet casino revenue derived from WagerLogic enjoyed healthy growth, rising 6% over Q1 2004;
· Version 6 of the company’s casino software was also released in Spanish, French, Italian and
German, contributing to international appeal and European growth;
· Geographic diversification continued to be strong with licensees’ revenue from international markets
growing to over 65% of total revenue, up from over 60% in 2004;
2
· CryptoLogic’s blue-chip status was reinforced in both the North American and UK markets: the
company was added to the main S&P/TSX Composite Index in Canada; and expanded its shareholder
base in the UK by attracting a number of prominent institutional investors;
· Quarterly dividend of $0.05 per share, payable on June 15, 2005 to shareholders of record as at June
8, 2005;
· Subsequent to quarter end, WagerLogic announced an exclusive, multi-year agreement for the
Internet rights to the first online slot version of Bejeweled, an exceptionally popular game on the
Internet; and
· In April 2005, the British government enacted a law to regulate online gaming in the UK for the first
time – a position that CryptoLogic has long advocated. This marks an historic first step for this major
jurisdiction to establish world-class standards for the safe, secure and responsible use of this form of
entertainment.
Strong First Quarter Performance (all financial figures expressed in US dollars)
In the first quarter ended March 31, 2005, CryptoLogic achieved record revenue, which rose 33% to
$20.3 million (Q1 2004: $15.2 million). EBITDA(1) for the quarter grew 26% to $5.8 million (Q1 2004:
$4.6 million). Despite increased costs associated with investing in the growth of the company’s business
to drive higher revenue generation, EBITDA(1) margin for the quarter remained solid at 29% as a
percentage of revenue (Q1 2004: 30%). Earnings for the quarter rose 27% to $4.8 million or $0.34 per
diluted share (Q1 2004: $3.8 million or $0.28 per diluted share).
These strong gains reflected solid organic growth from existing customers in the company’s core casino
market, and the fast-growing Internet poker arena. CryptoLogic continued to benefit from the early
returns from its major investment program, which is aimed at significantly enhancing the company’s
game and service offering and system infrastructure to support its customers’ growing online operations.
Given the considerable growth opportunities that are available to the company, CryptoLogic is further
enhancing its software, systems and product offerings. This extends the major investment program from
Q3 2004 to the end of 2005, now planned at $12.5 million. Over the last three quarters, more than 65%,
or $8.4 million of this program, has been invested as follows: $3.2 million in operating costs and $5.2
million in capital expenditures (comprising $3.2 million for the purchase of capital assets and $2.0 million
in capitalized software development related to the investment program).
Balance Sheet Strength
CryptoLogic’s financial strength continued to be reflected in its healthy operating cash flow and strong
balance sheet. At March 31, 2005, the company had no debt, and total cash grew to $90.2 million or
$6.36 per diluted share (comprising cash and cash equivalents, short term investments, and including
security deposits of $7.0 million). CryptoLogic’s working capital rose to $70.3 million or $4.96 per
diluted share.
On May 9, CryptoLogic’s Board declared the next quarterly dividend of $0.05 per share, payable on June
15, 2005 to shareholders of record as at June 8, 2005.
Operating cash flow for the first quarter of 2005 was $2.6 million (Q1 2004: $5.1 million). This decline
was largely attributed to increased receivables resulting from two licensees assuming responsibility for
their own e-cash processing, prepayment of royalty licensing fees related to new games in development
and reduced payables and accruals.
3
Geographic Diversification
CryptoLogic’s blue-chip results reflect the steady profitability of a business that is well diversified across
the world’s major Internet gaming markets. Revenue generated from licensees’ international players
grew to over 65% of first quarter revenue, up from over 60% in 2004. The UK and other European
markets remained solid contributors each at more than 30% of overall revenue in the quarter, which was
up from 30% and 20% respectively in 2004.
CryptoLogic enhanced the global appeal of its software by releasing Version 6 of its casino software in
Spanish, French, Italian and German. European players now enjoy a greater variety of games, including
progressive jackpot and slot games and classic card favourites – in their native languages.
Product Expansion
The Internet poker industry continues to enjoy strong momentum, with growth forecasts of more than
100% for 2005 (source: Global Betting & Gaming Consultants). CryptoLogic’s investment in its poker
software and network scalability continued to produce excellent results: fees earned from Internet poker
rose more than 200% over Q1 2004, and accounted for more than 25% of total Q1 2005 revenue.
WagerLogic’s new six-seat poker tournament feature, which is branded SIXPAK, was a contributing
factor to this growth. The software delivers “final-table” action throughout an entire tournament event
and expands licensees’ tournament offerings to their players. The central poker room shared by licensees
continued to reach new heights in popularity, now attracting more than 6,000 simultaneous online players.
Internet casino remained a major contributor, accounting for 65% of total revenue and growing 6% over
Q1 2004 revenue even in this more competitive and increasingly sophisticated game segment. The
Internet casino industry – which represents less than five percent of the world’s land-based casino market
(source: Global Betting & Gaming Consultants) – continues to offer vast growth potential.
New product innovation and market-targeted games are key growth drivers in the Internet casino market.
This imperative was underscored by WagerLogic’s recently announced five-year exclusive agreement for
the Internet rights to the slot version of Bejeweled, which will be one of the exciting games included in a
new casino Bonus Pack scheduled for release this autumn. Having garnered multiple Game of the Year
awards, the play-for-fun version of Bejeweled continues to be one of the most popular titles with Internet
players on AOL, Yahoo! and MSN.
Regulatory Commitment and New UK Law
CryptoLogic has consistently advocated regulation of Internet gaming for the protection of players and
the credibility of the industry. The company welcomed the British government’s recent enactment of a
law to regulate Internet gaming in the UK for the first time – this will establish world-class standards for
the safe, secure and responsible use of this form of entertainment in one of CryptoLogic’s major markets.
While the revised Gambling Act 2005 has become law, it is expected to take more than 12 months to fully
establish and implement the new regulatory regime, during which time CryptoLogic will closely monitor
its progress. The first applications are expected to be accepted in 2006, with licenses granted and
operational in 2007.
As one of the world’s few suppliers with government-approved gaming software – and with a customer
list that includes some of the best names in UK gaming – CryptoLogic’s compliance to the highest
regulatory practices is an important competitive advantage as more jurisdictions make the sensible choice
to regulate interactive gaming.
Enhanced Investor Profile
In January 2005, CryptoLogic’s shareholder base diversified through new UK institutional investors
having acquired approximately 8% of the company’s then outstanding shares. This should contribute to
the company’s liquidity on the London Stock Exchange.
4
During the quarter, Standard & Poor's also added CryptoLogic to the main S&P/TSX Composite Index
and to the S&P/TSX SmallCap Index in the information technology sector. Inclusion on the premier
benchmark for Canadian equity markets highlights CryptoLogic’s market strength and exciting growth.
Outlook
CryptoLogic’s disciplined execution and focused investments in its primary growth markets have
translated into early returns and contributed to a strong start in 2005. The second quarter is traditionally
not as strong as the first quarter as Internet activity tends to soften in early summer. Accordingly,
Management forecasts second quarter revenue to range from $19.2-$19.6 million, with earnings of $4.2-
$4.4 million or $0.29-$0.30 per diluted share.
CryptoLogic’s investment in its business is strengthening the company’s global position in both its core
Internet casino and poker markets. With this growth momentum, CryptoLogic is making further
enhancements directed at the key areas of its business – its casino and poker software offerings, system
infrastructure and scalability, and back-office and customer care.
Capital expenditures for the full year of 2005 are estimated to be $12.0 million, of which 35% relates to
the company’s normal course investment. The balance includes: a move to new office premises this year
to accommodate a growing organization; and the remaining portion under the company’s major
investment program to be capitalized. CryptoLogic’s commitment to its business today and for the future
is intended to continue to enhance the company’s global leadership, competitive strength and prospects
for increasing near and long term returns for shareholders.
2005 First Quarter Analyst Call
A conference call is scheduled for 8:30 a.m. (Eastern) (1:30 p.m. GMT) on Wednesday, May 11, 2005.
Interested parties should call either 416-695-5259, 1-877-888-3490 (North America) or international toll
free number at (Country Code) 800-4222-8835. Instant replay will be available until Wednesday, May
18, 2005 by calling 416-695-5275 or 1-866-518-1010.
Annual & Special Meeting of Shareholders
CryptoLogic’s Annual and Special Meeting of Shareholders will be held at The Design Exchange,
Trading Floor, 234 Bay Street, Toronto, Canada, on Thursday, May 12, 2005 at 4:30 p.m., Eastern time.
About CryptoLogic (www.cryptologic.com)
Focused on integrity and innovation, CryptoLogic Inc. is the world’s largest public online gaming software
developer and supplier. Its leadership in regulatory compliance makes it one of the very few companies with
gaming software that is certified to strict standards similar to land-based gaming. WagerLogic Limited, a whollyowned
subsidiary of CryptoLogic, is responsible for the licensing of its gaming software and services to an
internationally-recognized blue chip customer base worldwide. For information on WagerLogic, visit
www.wagerlogic.com.
CryptoLogic’s common shares trade on the Toronto Stock Exchange (symbol: CRY), on the Nasdaq National
Market (symbol: CRYP), and on the London Stock Exchange (symbol: CRP).
For more information, please contact:
CryptoLogic, (416) 545-1455 Argyle Rowland, (416) 968-7311 ( Media)
Nancy Chan-Palmateer, Director of Communications Daniel Tisch, ext. 223/ dtisch@argylerowland.com
Jenifer Cua, Interim Chief Financial Officer Karen Passmore, ext. 228/ kpassmore@argylerowland.com
(
1) Management believes that EBITDA (earnings before interest, taxes, and amortization) is a useful supplemental measure of performance.
However, EBITDA is not a recognized earnings measure under generally accepted accounting principles (GAAP) and does not have a
standardized meaning. Therefore, EBITDA may not be comparable to similar measures presented by other companies.
5
CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:
Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties including,
without limitation, risks associated with the Company’s financial condition and prospects, legal risks associated with Internet gaming and risks of
governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on
licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company’s
filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking
statements.
6
MANAGEMENT’S DISCUSSION AND ANALYSIS
CryptoLogic Inc. and our subsidiaries are referred collectively as “CryptoLogic”, “the Company”, “we”,
“us” and “our” throughout Management’s Discussion and Analysis (“MD&A”), unless otherwise
specified. The following MD&A should be read in conjunction with the unaudited consolidated interim
financial statements of CryptoLogic, including the notes thereto, for the three months ended March 31,
2005 and March 31, 2004, and the audited consolidated financial statements and the MD&A for the year
ended December 31, 2004 as set out in our 2004 Annual Report. Except where otherwise indicated, the
reader may assume that economic and industry factors are substantially unchanged from the 2004 yearend
MD&A. This MD&A is dated May 11, 2005. Additional information relating to CryptoLogic,
including our Annual Information Form, is available on SEDAR at www.sedar.com or EDGAR at
www.sec.gov.
All currency amounts are in US dollars, unless otherwise indicated.
BUSINESS OVERVIEW
CryptoLogic is a leader and the world’s largest publicly traded online gaming software developer and
supplier serving the global Internet gaming market. WagerLogic Limited (“WagerLogic”), a whollyowned
subsidiary of CryptoLogic, provides licensing, e-cash management and customer support services
for our Internet gaming software to an internationally-recognized blue chip client base (“licensees” or
“customers”) around the world who operate under government authority where their Internet businesses
are domiciled.
OVERVIEW OF RESULTS
CryptoLogic delivered strong first quarter performance in 2005 marked by record revenue, solid earnings
and positive operating cash generation. In the more competitive and increasingly demanding online
casino market, licensees benefited from WagerLogic’s broadening casino offering and ongoing release of
new game choices and variations that help attract players and increase revenue potential. WagerLogic
licensees’ central poker room continued to be one of the fastest growing poker sites on the Internet, with
Q1 2005 growing in excess of 200% over Q1 2004, and outpaced the industry’s growth of 115% (source:
PokerPulse.com, an independent industry research Web site). Enhanced poker tournament software and
expanding poker system infrastructure were contributing factors to our licensees’ growth in this rapidlygrowing
game area.
Revenue for the first quarter of 2005 rose 33% to $20.3 million (Q1 2004: $15.2 million). EBITDA(1)
increased by 26% to $5.8 million (Q1 2004: $4.6 million). Despite increased investments to drive higher
revenue generation, EBITDA(1) margin remained solid at 29% as a percentage of revenue in 2005 (Q1
2004: 30%). Furthermore, earnings increased by 27% to $4.8 million or $0.34 per diluted share (Q1
2004: $3.8 million or $0.28 per diluted share).
CryptoLogic’s strong balance sheet continued to be reflected in $90.2 million in cash, cash equivalents
and short term investments (including $7.0 million in security deposits) at quarter-end. In addition,
working capital grew to $70.3 million.
Given the considerable growth opportunities that are available to the company, CryptoLogic is further
enhancing its software, systems and product offerings. This extends our major investment program from
Q3 2004 to the end of 2005, now planned at $12.5 million. Over the last three quarters, more than 65%,
or $8.4 million of this program, has been invested, which is translating into early incremental returns as
evidenced by strong first quarter results.
7
RESULTS OF OPERATIONS
Revenue
Revenue in the first quarter of 2005 increased by 33% to $20.3 million (Q1 2004: $15.2 million).
Typically one of the seasonally strongest quarters of the year, CryptoLogic generated record first quarter
revenue in 2005. Strong gains reflected the considerable growth of licensees’ Internet poker activities and
continued solid performance in their Internet casino businesses. The initial returns of our major
investment program have also contributed positively to the Company’s top-line performance.
During the quarter, Internet poker fees increased by more than 200% over Q1 2004. Internet poker fees
accounted for more than 25% of Q1 2005 revenue. This growth was driven by: rising player traffic to
licensees’ poker sites, which was supported by increased system capacity; and continued enhancement of
our poker software, including the introduction of new features such as the innovative SIXPAKÔ six-seat
tournament option, which expanded licensees’ tournament offerings to their players. As a result,
WagerLogic licensees’ central poker room continued to be one of the fastest-growing rooms on the
Internet, and is among the top five revenue-generating poker sites in the world, according to PokerPulse,
with more than 6,000 live players simultaneously online. WagerLogic expects to experience continued
growth from its poker licensees as they benefit from an enhanced poker offering and capitalize on the
fast-growing online poker market.
CryptoLogic’s Internet casino revenue continued to reflect solid performance and grew 6% over the same
first quarter in 2004. This was evidence of the continued strength of our existing major brand name
licensees and the benefit of an expanding casino game suite and new game introductions.
Licensees’ revenue from international markets continued a positive trend and rose over 65% of overall
revenue, up from over 60% in fiscal 2004. The UK and Continental Europe continued to be core markets
and grew to account for more than 60% of revenue (or over 30% each) compared with more than 50% in
2004 (or 30% and 20% respectively).
Operating Costs
Operating costs comprise software development and support costs that include all personnel and
compensation costs, licensee support, customer service costs and compliance-related expenditures.
Operating costs were $12.8 million in the first quarter of 2005 or 63% of revenue (Q1 2004: $9.0 million
or 59%).
Higher costs were in line with CryptoLogic’s ongoing investments directed at new casino games,
enhancement of our poker offering, an expanding system infrastructure to support growing player traffic
and volumes, and enhancement of our customer care and back-office processing and support services.
Operating costs also rose with increased processing fees associated with growing financial transaction
volumes.
In the second half of 2004, CryptoLogic embarked on a major investment program, which is above and
beyond our normal course expenditures to significantly upgrade our gaming platform and system and
service infrastructure. Given the considerable growth opportunities that are available to the company, we
are making further enhancements. This extends our major investment program from Q3 2004 to the end
of 2005, now planned at $12.5 million. Over the last three quarters, more than 65%, or $8.4 million of
this program, has been invested as follows: $3.2 million in operating costs and $5.2 million in capital
expenditures (comprising $3.2 million for purchases of capital assets and $2.0 million in capitalized
software development associated with the program). CryptoLogic is already benefiting from the early
returns of these investments as evidenced by strong top-line performance. Even with higher investments,
CryptoLogic’s growth expectations for the year continue on track as we continue to manage expenditures
in proportion to revenue generation.
8
General and Administrative Costs
General and administrative (G&A) expenses rose to $1.6 million for the quarter (Q1 2004: $1.5 million),
but declined to 8% of revenue (Q1 2004: 10%) due to strong revenue performance. The rise in G&A
costs was principally due to increased facilities and infrastructure expenditures to support a growing
organization. Given our larger company, G&A expenses will rise modestly, although are expected to
remain fairly consistent as a percentage of revenue.
Finance Costs
Finance costs include bank charges and fees for bank drafts and letters of credit. All letters of credit are
secured by cash deposits, which are classified as security deposits on our balance sheet. These costs
remained fairly consistent at $0.09 million for both Q1 2005 and the same period in 2004.
EBITDA(1)
EBITDA(1) for the first quarter of fiscal 2005 rose by 26% to $5.8 million (Q1 2004: $4.6 million).
Despite increased costs associated with investing in key areas of our business and infrastructure to
support long term growth, EBITDA(1) margin remained solid at 29% as a percentage of revenue in 2005
(Q1 2004: 30%). EBITDA(1) is expected to remain at solid levels, although margins are expected to
decline as major investments carry into 2005 as planned.
(1) Management believes that EBITDA (earnings before interest, taxes, and amortization) is a useful supplemental measure of
performance. However, EBITDA is not a recognized earnings measure under generally accepted accounting principles
(GAAP) and does not have a standardized meaning. Therefore, EBITDA may not be comparable to similar measures
presented by other companies.
EBITDA is reconciled to earnings as follows:
For the three months
ended March 31,
(In thousands of US dollars) 2005 2004
Earnings $4,839 $3,821
Income taxes 795 611
Interest income (637) (244)
Amortization 802 424
EBITDA $5,799 $4,612
Amortization
Amortization expense during the quarter rose to $0.8 million (Q1 2004: $0.4 million). The increase
reflected higher investments in computer equipment, leasehold improvements, software and licenses to
support our growing organization and the Company’s major investment program.
Interest Income
Interest income rose to $0.6 million in the first quarter (Q1 2004: $0.2 million). The increase was a
result of a higher cash position and better interest yield.
Provision for Income Taxes
Income taxes for the quarter grew to $0.8 million (Q1 2004: $0.6 million), primarily due to higher pretax
profits and increased taxable income in higher tax jurisdictions. The future income tax credit of $0.2
million was due to the effect of the change in foreign exchange rates during the first quarter of 2005.
Earnings
Earnings for the quarter rose by 27% to $4.8 million or $0.34 per diluted share (Q1 2004: $3.8 million or
$0.28 per diluted share). First quarter results were ahead of analysts’ consensus of $0.30 per diluted
share.
9
Summary of Quarterly Results
Fiscal
2005
Fiscal
2004
Fiscal
2003
(In thousands of US dollars, except per share data) Q1 05 Q4 04 Q3 04 Q2 04 Q1 04 Q4 03 Q3 03 Q2 03
Revenue $20,274 $17,949 $15,616 $14,925 $15,224 $13,540 $10,944 $10,826
Interest income 637 426 361 262 244 160 196 174
Earnings 4,839 3,794 2,856 3,197 3,821 3,033 2,157 2,478
Earnings per share
Basic
Diluted
0.36
0.34
0.29
0.27
0.22
0.21
0.25
0.23
0.30
0.28
0.25
0.23
0.18
0.17
0.20
0.20
Basic weighted average number of shares (000’s) 13,573 13,185 13,076 12,979 12,641 12,280 12,256 12,237
Diluted weighted average number of shares (000’s) 14,184 13,871 13,642 13,734 13,419 12,972 12,696 12,395
Typically, our first and fourth quarters (during the winter and fall seasons) are our strongest periods, and
revenue in the middle two quarters can slow down as Internet usage moderates in the summer months
when players tend to be outdoors. The sequential increase in Q1 2005 revenue over Q4 2004 was a result
of the continued significant growth in Internet poker fees combined with solid casino revenue, while
managing expenses to produce appropriate returns and drive revenue generation.
LIQUIDITY AND CAPITAL RESOURCES
In the quarter, CryptoLogic continued to add to our strong financial position. As at March 31, 2005, the
Company had no debt, and a cash position of $90.2 million or $6.36 per diluted share, which comprised
cash and cash equivalents, short term investments, and included $7.0 million of security deposits.
Working capital grew to $70.3 million or $4.96 per diluted share.
Operating cash flow in the first quarter of 2005 was $2.6 million (Q1 2005: $5.1 million). This decline
was largely due to increased receivables resulting from two licensees responsible for their own e-cash
processing, prepayment of royalty licensing fees related to new games under development, and reduced
payables and accruals.
CryptoLogic currently has 13.7 million common shares issued and outstanding, and 1.1 million stock
options and warrants outstanding.
CRITICAL ACCOUNTING POLICIES, CHANGES IN ACCOUNTING POLICIES AND OFFBALANCE
SHEET ARRANGEMENTS
These items are unchanged as discussed in the Company’s MD&A for the year ended December 31, 2004
as contained in our 2004 Annual Report.
RISKS AND UNCERTAINTIES
The primary risks and uncertainties that affect and may affect us and our business, financial condition and
results of operations are substantially unchanged from those discussed in the Company’s MD&A for the
year ended December 31, 2004 as contained in our 2004 Annual Report.
OUTLOOK
CryptoLogic’s excellent first quarter performance reflected the continued execution of our focused
strategy and the initial returns of our investment initiatives targeted at key areas of our business. While
online gaming continues to promise vast market potential, a growing marketplace means growing
competition and increasingly sophisticated players, as well as the ongoing challenges of US uncertainty.
Given CryptoLogic’s strong financial results and growth momentum, we will continue to invest further in
our business to provide an expanding game and services offering that help our licensees develop a loyal
player community and increase revenue potential.
10
Capital expenditures for the full year of 2005 are estimated to be $12.0 million, of which 35% relates to
our normal course investment. The balance includes: a move to new office premises this year to
accommodate a growing organization; and the remaining portion under the Company’s major investment
program to be capitalized. CryptoLogic’s commitment to its business today and for the future is intended
to continue to enhance the Company’s global leadership in our primary growth markets of online casino
and poker, competitive strength and prospects for increasing near and long term returns for shareholders.
11
CRYPTOLOGIC INC.
CONSOLIDATED BALANCE SHEETS
(In thousands of US dollars)
As at
March 31,
2005
(unaudited)
As at
December 31,
2004
ASSETS
Current assets:
Cash and cash equivalents $69,256 $43,182
Security deposits 7,000 7,000
Short term investments 13,899 35,782
Accounts receivable and other 8,288 6,487
Prepaid expenses 3,092 1,754
101,535 94,205
User funds on deposit 20,729 18,908
Capital assets 10,025 9,227
Intangible assets 100 106
Goodwill 1,776 1,776
$134,165 $124,222
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $28,989 $30,056
Income taxes payable 2,222 1,331
31,211 31,387
User funds held on deposit 20,729 18,908
Future income taxes 1,677 1,840
53,617 52,135
Shareholders’ equity:
Share capital 24,699 20,380
Stock options 1,101 1,114
Retained earnings 54,748 50,593
80,548 72,087
$134,165 $124,222
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
(In thousands of US dollars)
(Unaudited)
For the three months
ended March 31,
2005 2004
Retained earnings, beginning of period
$50,593
$38,758
Earnings 4,839 3,821
Dividends paid (684) (384)
Retained earnings, end of period $54,748 $42,195
12
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of US dollars, except per share information)
(Unaudited)
For the three months
ended March 31,
2005 2004
Revenue
$20,274
$15,224
Expenses
Operating costs 12,754 9,014
General and administrative 1,631 1,506
Finance 90 92
Amortization 802 424
15,277 11,036
Earnings before undernoted 4,997 4,188
Interest income 637 244
Earnings before income taxes 5,634 4,432
Income taxes:
Current
Future
958
(163)
277
334
795 611
Earnings $4,839 $3,821
Earnings per common share
Basic $0.36 $0.30
Diluted $0.34 $0.28
Weighted average number of shares (‘000s)
Basic 13,573 12,641
Diluted 14,184 13,419
13
CRYPTOLOGIC INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of US dollars)
(Unaudited)
For the three months
ended March 31,
2005 2004
Cash flows from (used in):
Operating activities:
Earnings $4,839 $3,821
Adjustments to reconcile earnings to
cash provided by (used in) operating activities:
Amortization 802 424
Future income taxes (163) 334
Stock options 425 263
Changes in operating assets and liabilities:
Security deposits - (450)
Accounts receivable and other (1,801) 182
Prepaid expenses (1,338) 203
Accounts payable and accrued liabilities (1,067) (245)
Income taxes payable 891 570
2,588 5,102
Financing activities:
Issue of capital stock 3,881 4,410
Dividends paid (684) (384)
3,197 4,026
Investing activities:
Purchase of capital assets (1,592) (764)
Purchase of intangible assets (2) (89)
Short term investments 21,883 (22,987)
20,289 (23,840)
Increase (decrease) in cash and cash equivalents 26,074 (14,712)
Cash and cash equivalents, beginning of period 43,182 44,010
Cash and cash equivalents, end of period $69,256 $29,298
Supplemental cash flow information:
Non cash portion of option exercised $438 $204
14
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
As at March 31, 2005
(All figures are in thousands of US dollars, except per share disclosure and where otherwise indicated)
(Unaudited)
These consolidated interim financial statements of CryptoLogic Inc. (the “Company”) have been prepared in
accordance with Canadian generally accepted accounting principles using the same accounting policies as were used
for the audited consolidated financial statements for the year ended December 31, 2004. These consolidated interim
financial statements should be read in conjunction with the audited consolidated financial statements for the year
ended December 31, 2004, as set out in the 2004 Annual Report.
1. Stock Option Plan
In accordance with the guidelines of the Canadian Institute of Chartered Accountants, the Company has expensed
the costs of all stock option grants issued on or after January 1, 2003. The fair value of the options granted in 2004
and 2005 was made using the Black-Scholes option pricing model under the following weighted assumptions:
2005 2004
Dividend yield 0.75% 0.75%
Risk-free rate 3.25% 2.75%
Expected volatility 50.0% 50.0%
Expected life of options in years 5.0 5.0
The estimated fair value of options is recorded over the vesting period of the options. The costs of stock options of
$425 in Q1 2005 (Q1 2004: $263) are included in operating costs. Consideration paid by employees on the exercise
of stock options is recorded as share capital.
For the year ended December 31, 2002, no compensation cost was recorded on the grant of stock options during that
year. In accordance with the transitional provisions of the accounting guideline, additional pro forma disclosure is
presented as if the fair value method of accounting had bee