Market Briefs (April 29 - May 3)

Credit Card Issues Still Affecting Bottom Lines

Two I-gaming software giants, Boss Media (BOSS.ST) and CryptoLogic Inc. (CRYP), both released reports in the last week that reflect a continuing financial burden caused by credit card transaction problems in the United States.

In its interim report, released today, Boss states that its decreased net sales are due to credit card problems.

"At the end of the third quarter a large number of card-issuing banks in the U.S. began declining credit card payments to Internet casinos, which depressed sales considerably for the remaining part of the year" the report stated.

Crypto's first-quarter 2002 results showed similar problems caused by credit card declines.

"Lower revenue in the quarter reflects the short-term challenge being faced by the entire industry as it adjusts to the impact of the U.S. credit card situation," CEO Jean Noelting said. "This pressure was anticipated, and has been factored in to our projections for the year."

Will Hill to Go Public?

U.K. bookmaker William Hill may be close to going public. The Financial Times reported last week that the company is considering a flotation at the end of May, the same time as the World Cup.

Although David Harding, chief executive of William Hill, declined to comment on the matter to the newspaper, his firm has appointed Deutsche Bank and Schroder Salomon Smith Barney as advisors. Analysts price the company at about £1.4 billion.

Harding said Internet gambling accounts for about 5 percent of William Hill's business. Ten percent of the group's revenue originates from telephone betting, and the remaining bulk of William Hill's bets are made at its chain of betting shops.

Record Sales Month for GWIN Global Sports & Entertainment (GWIN.OB) expects April set a record for gross sales.

April's gross sales for the handicapping company amounted to $440,000. GWIN will report its second-quarter 2002 results when the quarter ends on June 30.

Chairman and CEO Wayne Allyn Root said the high sales figure is especially notable because April is usually the company's slowest month.

"We are presently right on track to achieve our goal of $7.9 million in revenues in 2002 and to achieve the even higher returns we think are likely in 2003 and beyond," he said.

MGM Director May Unload $8.2 Million in Stock

MGM Mirage's (MGG) director, Alex Yemenidjian, recently filed with the Security and Exchange Commission to sell 210,000 shares of his company's stock.

The stock is valued at $8.2 million. Yemenidjian listed April 22 as the intended date of sale on the Form 144 that he filed with the SEC.

A Form 144 allows a person to state an intention to sell stock but does not commit the person to do so.

Research Capital Upgrades Crypto

The Research Capital Corp. on Tuesday upgraded CryptoLogic Inc. (CRYP) to "buy" from "speculative buy."

Reuters reported that the upgrade means that analysts are looking past the credit card transaction problems that have plagued the I-gaming industry in recent months.

Analyst Scott Preston said Crypto's new licensing agreements with European companies could make up for revenue lost to credit card woes.

"We remain concerned with credit card problems; however, CryptoLogic's focus on increasing its European and international exposure, as well as extensive work on the addition of new payment options, should greatly mitigate this risk," he wrote.

betandwin.com Voting Rights Announcement

Austrian betting site betandwin.com on Thursday announced a change in voter rights resulting from the sale of betandwin.com stock belonging to Carsten Markus Koerl.

Prior to the sale, Koerl, a Supervisory Board member and co-founder of the company, held 5.4 percent of the firm's stock. Between March and May, he sold 46,820 shares to pay relocation taxes after moving from Austria.

Betandwin.com reports that since the stock was sold on a stock exchange, it is not known whether the buyer is a "natural and legal person." As a result, the purchase may violate the shareholding limit detailed in § 91 of the Stock Exchange Act.

Koerl's holding is now less than 5 percent of the company's stock.

Reports Released

Software supplier CryptoLogic (CRYP) reports net income of $2.2 million and revenue of $8.7 million for its first quarter of 2002. Those figures compare to $5.2 million in net income and $10.9 million in revenue for the first quarter of 2001. Jean Noelting, CEO, said credit card transaction problems in the United States are to blame for the decrease.