Crypto Gets Listed in London, Extends Deal with Littlewoods

15 September 2003

Canadian-based CryptoLogic, one of the leading software suppliers to the interactive gaming industry, got the week off on the right foot with a pair of positive announcements.

On Monday the firm announced that one of its major licensees, Littlewoods Gaming, extended its agreement for five years and Crypto will expand the features Littlewoods currently offers to its online customers.

In addition to the Littlewoods deal, Crypto also announced its common shares, which currently trade on the Toronto Stock Exchange (TSX) and NASDAQ, were approved for trading on the main market of the London Stock Exchange.

During midday trading on Monday on the TSX, Crypto's stock rose two percent on the news and was trading at $14.75, up 33 cents from Friday's closing price.

In a sense, both agreements go hand-and-hand. With Littlewoods Gaming, Crypto has a major licensee in the UK market-- one company officials described as a "household name" in the region. By getting their stock traded on the London Stock Exchange Crypto will be able to boost its exposure with investors in an area it hopes to grow its business even more in the future.

Lewis Rose, CryptoLogic's president and CEO, said the new growth in the UK represents the company's worldwide reach.

"CryptoLogic's new London listing reflects our global focus, gives us access to a broader shareholder base, and enhances our reach and profile in a major market that's favorable to online gaming," he said.

Equally important for Crypto is a strong presence in the UK, which he sees as a key jurisdiction for the industry since the government is working its way through a process that is expected to overhaul gambling legislation and regulate online casinos and sports books.

"The U.K. is emerging as the global center of regulated interactive gaming and CryptoLogic has an outstanding roster of well-known, blue-chip customers and operations in this high-growth market," he said.

As part of the Littlewoods deal CryptoLogic will continue to supply Littlewoods with online casino software and also add live "player-to-player" poker programming to the site.

CryptoLogic's online games are licensed through its wholly owned subsidiary, WagerLogic.

Rose said despite an industry-wide slowdown over the last couple of years, Crypto is poised to become the leading supplier for the interactive gaming industry. Since its inception in 1996, Rose said Crypto has processed more than $12 billion in wagers for 1.5 million players in 240 countries across the globe.

An unfriendly and uncertain regulatory environment has restricted Crypto's expansion in North America so the UK now accounts for 30 percent of its business.

Crypto was able to push for its listing on the London Stock Exchange without having to raise any additional funds and the move is an accordance with other developments the company has made recently in the UK.

Crypto's increased customers base in the region forced the company to open up two offices in England. Crypto's turnover from the UK doubled over the last year from 15 to 30 percent of its worldwide revenues. Its UK-based business helped create a cash balance of $60 million for Crypto, and the company has no debt.

Littlewoods has been able to leverage its strong brand name, best known in the UK for its Littlewoods Football Pools, into a successful Internet gaming operation. Littlewoods Gaming is owned by London-based Sportech PLC and has been in the industry for eight decades.

Peter Cuffe, Director of Interactive Media, Littlewoods Gaming, said Crypto has proven itself to Littlewoods executives in the past and the five-year extension was a natural decision.

"CryptoLogic continues to be the best choice for Littlewoods Gaming," he said. "Their proven expertise was a key element in enabling an excellent launch of, one of the premier casino venues on the Internet. In addition, they worked closely with us to successfully complete the transfer of our online casino to the Netherlands Antilles this month."

Cuffe predicted that Littelwoods' customers would welcome the new features on the site, especially the poker software.

In addition to Littlewoods, Crypto, through WagerLogic, is the supplier to such online casino giants as InterCasino, William Hill and the Ritz Club. For Crypto a key part of the extension was adding Littlewoods to its burgeoning list of poker sites.

"We are delighted to continue to build on our relationship with Littlewoods Gaming and add another strong international brand name to our growing poker customer list," he said. "We have successfully worked with Littlewoods to establish their online casino business. By leveraging the power of Littlewoods' brand, its substantial database and now also our exciting poker technology, we expect Littlewoods to achieve further growth."

Rose is hopeful that other countries, namely the United States, will look at the UK for guidance in how to approach the interactive gaming industry. "We believe the UK's world-class regulatory environment is what is needed to bring the sector into the sunlight globally," he said.

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