CRYPTOLOGIC POSTS STRONG 24% REVENUE INCREASE IN FOURTH QUARTER AND 15% IN FISCAL 2000

Toronto, Canada - February 1, 2001.

CryptoLogic Inc., a leading supplier of software to the Internet gaming and e-commerce industries, today announced its financial results for the fourth quarter and year ended December 31, 2000. All financial figures are expressed in U.S. dollars.

Revenue for the fourth quarter of 2000 increased 24% to $10.6 million compared to $8.6 million in the corresponding 1999 quarter. Net income for the quarter was $4.1 million or $0.29 per share ($0.27 per share on a fully diluted basis) compared to $5.5 million in the prior 1999 quarter or $0.63 per share ($0.37 per share on a fully diluted basis). In 2000, due primarily to the exercise of 5.4 million Class A warrants, the basic number of shares outstanding increased by 57% over 1999, although the fully diluted number of shares remain unchanged.

Revenue for the fourth quarter of 2000 was up 18% compared to $9.0 million in the third quarter of the same fiscal year. Net income for the fourth quarter rose to $4.1 million, an increase of 57% over $2.6 million in the third quarter of fiscal 2000. As a result, net margin for the fourth quarter was 38%, a 33% improvement over the 2000 third quarter.

For fiscal 2000, revenue totaled $37.6 million, rising 15% over $32.7 million in the previous year. Net income was $15.5 million or $1.18 per share ($1.04 per share on a fully diluted basis) as compared to $20.6 million or $2.40 per share ($1.35 per share on a fully diluted basis) in 1999. As a result, net margin for fiscal 2000 was 41%. CryptoLogic continued to show a strong balance sheet and had a total cash position of $57.0 million at the end of the year.

FINANCIAL HIGHTLIGHTS (Amounts stated in millions of U.S. dollars, except per share disclosure)
	Fourth Quarter Ended December 31,				Years Ended December 31,
	2000	1999	% Change		2000	1999	% Change
Total revenue	$10.6	$8.6	24%		$37.6	$32.7	15%
Income from continuing operations	$4.1	$4.7	13%		$15.5	$20.0	23%
Gain on discontinued operations	--	$0.8			--	$0.6
Net income	$4.1	$5.5	26%		$15.5	$20.6	25%
Earnings per share	$0.29	$0.63	54%		$1.18	$2.40	51%
Fully Diluted EPS	$0.27	$0.37	27%		$1.04	$1.35	23%
Weighted average number of shares	14.2	8.6			13.1	8.6
Weighted average fully diluted number of shares	15.6	15.6			15.3	15.4

"CryptoLogic continues to be a highly profitable Internet leader," said Andrew Rivkin, CryptoLogic's co-founder and director. "In 2000, CryptoLogic focused on signing quality, name-brand clients, made key investments to drive future growth and recruited a new CEO to take the company to the next level. It was a year of transition -- one that ends with regained momentum that points to stronger growth in 2001."

CryptoLogic moves into 2001 with enviable fundamentals, a top-notch licensee base and professional management to lead the company from entrepreneurial success to be the major force in one of the fastest-growing Internet markets.

"CryptoLogic is uniquely positioned as a new economy company with the basic values of the best old economy organizations," said Jean Noelting, president and CEO of CryptoLogic. "I am excited to embrace this golden opportunity to expand on CryptoLogic's success and take us to even greater heights. Looking forward, we will continue to emphasize quality, name-brand licensees and geographic expansion. We will increase our competitive lead through marketing and heightened regulatory efforts - key success factors in the evolution of Internet gaming."

Noelting added, "We anticipate organic revenue growth of over 20% in 2001 and net margin improvement over 45%. Our conservative view is that the first quarter is expected to be comparable to the year. With sizeable cash reserves, acquisitions are expected to contribute in the second half of the year, further augmenting our growth rates. Our business plan will put CryptoLogic in the best position to service the majority of profitable online casinos within a regulated environment, maintain high net margins and enhance shareholder value."

CRYPTOLOGIC INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands of U.S. dollars, except per share information)
		For the three months ended December 31		For the years ended December 31
		2000	1999	2000	1999
Revenue		$9,701	$7,989	$34,390	$30,980
Interest income		895	562	3,254	1,704
		10,596	8,551	37,644	32,684
Expenses:
	Software development and support	4,714	2,749	16,367	9,239
	General and administrative	844	608	3,024	1,468
	Finance	73	23	201	99
	Amortization	86	71	227	157
		5,717	3,451	19,819	10,963
Income before income taxes		4,879	5,100	17,825	21,721
Income taxes		802	422	2,340	1,709
Income from continuing operations		4,077	4,678	15,485	20,012
Gain on discontinued operations		--	806	--	549
Net Income		$4,077	$5,484	$15,485	$20,561
Basic Earnings per Share from Continuing Operations		$0.29	$0.54	$1.18	$2.34
Basic Earnings per Share		$0.29	$0.63	$1.18	$2.40
Fully Diluted Earnings per Share from Continuing Operations		$0.27	$0.32	$1.04	$1.31
Fully Diluted Earnings Per Share		$0.27	$0.37	$1.04	$1.35
Weighted average common shares		14,188	8,638	13,103	8,570
Weighted average fully diluted number of common shares		15,589	15,559	15,332	15,420

CRYPTOLOGIC INC. CONSOLIDATED STATEMENTS OF RETAINED EARNINGS (amounts in thousands of U.S. dollars)
	For the three months ended December 31		For the years ended December 31
	2000	1999	2000	1999
Retained earnings, beginning of period	$49,498	$36,865	$42,175	$22,170
Net income	4,077	5,484	15,485	20,561
Excess of repurchase price of common shares over stated value	(2,442)	(174)	(6,527)	(556)
Retained earnings, end of period	$51,133	$42,175	$51,133	$42,175

CRYPTOLOGIC INC. CONSOLIDATED BALANCE SHEETS As at December 31, 2000 and 1999 (amounts in thousands of U.S. dollars)
		2000	1999
ASSETS Current assets
	Cash and cash equivalents	$42,696	$40,977
	Restricted cash	14,000	5,040
	Reserves with credit card processors	1,217	631
	Accounts receivable	1,435	298
	Prepaid expenses and other	839	1,020
		60,187	47,966
Investments		1,430	1,080
Capital assets		839	515
		$62,456	$49,561
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities
	Accounts payable	$2,154	$1,563
	Accrued liabilities	876	289
	Income taxes payable	2	777
	Funds held on deposit	1,814	1,092
		4,846	3,721
Shareholders' equity
	Capital stock	6,477	3,665
	Retained earnings	51,133	42,175
		57,610	45,840
		$62,456	$49,561

CRYPTOLOGIC INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2000 and 1999 (amounts in thousands of U.S. dollars)
		2000		1999
Cash flows from (used in) operating activities:
Income from continuing operations		$15,485		$20,012
Amortization adjustment to reconcile income to net cash flows		227		157
Changes in operating assets and liabilities:
	Restricted cash	(8,960)		(650)
	Reserves and deposits with credit card processors	(586)		1,371
	Accounts receivable	(1,487)		75
	Prepaid expenses and other	181		(479)
	Accounts payable	591		306
	Accrued liabilities	587		(29)
	Income taxes payable	(775)		696
	Funds held on deposit	722		324
		5,985		21,783
	Cash flows used in discontinued operations	--		(336)
		5,985		21,447
Financing activities:
Issue of capital stock		2,974		839
Repurchase of common stock		(6,689)		(572)
		(3,715)		267
Investing activities:
Proceeds on sale of Gamesmania		--		475
Additions to capital assets		(551)		(342)
Acquisition of assets of GamesMania		--		(270)
		(551)		(137)
Increase in cash and cash equivalents		1,719		21,577
Cash and cash equivalents, beginning of year		40,977		19,400
Cash and cash equivalents, end of year		$42,696		$40,977