CRYPTOLOGIC INC.
          CONSOLIDATED STATEMENTS OF INCOME For the three and
                six months ended June 30, 2001 and 2000
                              (unaudited)

In thousands of U.S.
Dollars, except per   For the three months    For the six months
share information         ended June 30         ended June 30

                         2001           2000     2001          2000
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Revenue               $10,798         $8,318  $21,663       $16,569
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Expenses:
  Software development
   and support          5,035          3,147    9,998         6,748
  General and
   Administrative       1,012            674    1,795         1,326
  Finance                  73             39      148            64
  Amortization             71             43      134            80
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                        6,191          3,903   12,075         8,218
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Income from operations  4,607          4,415    9,588         8,351
Interest income           586            802    1,376         1,477
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Income before income
taxes                   5,193          5,217   10,964         9,828
Income taxes              370            565      959         1,025
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Net income             $4,823         $4,652  $10,005        $8,803
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-------------------------------------------------------------------
Basic earnings per
share                   $0.35          $0.36    $0.72         $0.74
Fully diluted earnings
per share               $0.33          $0.30    $0.68         $0.57

Basic weighted average
common shares          13,770         13,071   13,903        11,969
Fully diluted weighted
average common shares  14,792         15,413   14,692        15,462



                           CRYPTOLOGIC INC.
                      CONSOLIDATED BALANCE SHEETS
                     As at June 30, 2001 and 2000
                              (unaudited)



In thousands of U.S. dollars                    June 30
-------------------------------------------------------------------
                                       2001                   2000
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ASSETS
Current assets
  Cash and cash
   equivalents                      $40,901                $39,767
  Restricted cash                    14,800                 14,000
  Reserves with credit card
   processor                          1,488                  1,233
  Accounts receivable                   581                    165
  Prepaid expenses and other            807                  1,004
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                                     58,577                 56,169
Investments                           2,480                  1,080
Capital assets                          968                    684
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                                    $62,025                $57,933
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LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
  Accounts payable                   $2,062                 $1,722
  Accrued liabilities                   991                    459
  Income taxes payable                1,051                    505
  Funds held on deposit               2,317                  1,336
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                                      6,421                  4,022
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Shareholders' equity
  Capital stock                       7,499                  6,301
  Retained earnings                  48,105                 47,610
-------------------------------------------------------------------
                                     55,604                 53,911
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                                    $62,025                $57,933
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-------------------------------------------------------------------



                        CRYPTOLOGIC INC.
   CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY For the
    three and six months ended June 30, 2001 and 2000
                              (unaudited)

In thousands of U.S. dollars        For the three months ended June 30
                                          2001               2000
----------------------------------------------------------------------
                                    No. of   Stated   No. of    Stated
                                    Shares    Value   Shares     Value
                                     (000's)           (000's)

Common shares:
  Balance, beginning of period      14,047    6,835   11,200     5,115
  Repurchase of shares               (984)    (316)    (182)      (62)
  Exercise of stock options            119      958       23       122
  Exercise of Class A purchase
   warrant                              --       --    3,300     1,104
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                                    13,182    7,477   14,341     6,279
----------------------------------------------------------------------
Series C warrants
  Balance, beginning and end of
   period                              160       22     160         22
----------------------------------------------------------------------
Total capital stock                 13,342    7,499  14,501      6,301
----------------------------------------------------------------------
Retained earnings, beginning of
 period                                      55,140             46,326
Net income                                    4,823              4,652
Excess of repurchase price of common
 shares over stated value                  (11,858)            (3,368)
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                                             48,105             47,610
----------------------------------------------------------------------
Total shareholders' equity                   55,604             53,911
----------------------------------------------------------------------
----------------------------------------------------------------------

In thousands of U.S. dollars         For the six months ended June 30
                                          2001              2000
----------------------------------------------------------------------
                                     No. of   Stated   No. of   Stated
                                     Shares    Value   Shares    Value
                                     (000's)           (000's)

Common shares:
  Balance, beginning of period       14,079    6,455    8,974    3,643
  Repurchase of shares              (1,103)    (356)    (182)     (62)
  Exercise of stock options             206    1,378      149      867
  Exercise of Class A purchase
   warrant                               --       --    5,400    1,831
----------------------------------------------------------------------
                                     13,182    7,477   14,341    6,279
----------------------------------------------------------------------
Series C warrants:
  Balance, beginning and end of
   period                               160       22      160       22
----------------------------------------------------------------------
Total capital stock                  13,342    7,499   14,501    6,301
Retained earnings, beginning of
period                                        51,133            42,175
Net income                                    10,005             8,803
Excess of repurchase price of common
 shares over stated value                   (13,033)           (3,368)
----------------------------------------------------------------------
                                              48,105            47,610
----------------------------------------------------------------------
Total shareholders' equity                    55,604            53,911
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----------------------------------------------------------------------



                        CRYPTOLOGIC INC.
            CONSOLIDATED STATEMENTS OF CASH FLOWS
  For the three and six months ended June 30, 2001 and 2000
                          (unaudited)

In thousands of U.S. dollars    For the                  For the
                                three months             six months
                                ended June 30            ended June 30
                                2001     2000             2001    2000
Cash flows from (used in)
operating activities
Income                        $4,823   $4,652          $10,005  $8,803
Amortization adjustment to
reconcile income to cash
flows                             71       43              134      80
Changes in operating assets
 and liabilities:
  Restricted cash               (300)  (3,500)           (800) (8,960)
  Reserves with credit card
   processor                     (65)    (248)           (271)   (602)
  Accounts receivable           (125)     307              854     133
  Prepaid expenses and other     412     (454)              32      16
  Accounts payable               524     (190)             (92)    159
  Accrued liabilities            (92)    (349)             115     170
  Income taxes payable           424     (681)          1,049    (272)
  Funds held on deposit          108      151              503     244
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                               5,780     (269)         11,529    (229)
----------------------------------------------------------------------

Cash flows from (used in)
financing activities
Issue of capital stock           958    1,226            1,378   2,698
Repurchase of common shares  (12,174)  (3,430)        (13,389) (3,430)
----------------------------------------------------------------------
                             (11,216)  (2,204)        (12,011)   (732)
----------------------------------------------------------------------

Cash flows from (used in)
investing
activities
Additions to capital assets     (198)    (103)           (263)   (249)
Investments                     (129)      --           (1,050)     --
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                                (327)    (103)         (1,313)   (249)
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Increase (decrease) in cash
and cash equivalents          (5,763)  (2,576)         (1,795) (1,210)
Cash and cash equivalents,
beginning of period           46,664   42,343           42,696  40,977
----------------------------------------------------------------------
Cash and cash equivalents,
end of period                 40,901  $39,767          $40,901 $39,767
----------------------------------------------------------------------
----------------------------------------------------------------------