CryptoLogic profit up 41% despite U.S. ban
Software maker shifts focus to Europe
Shares jump nearly 10% on earnings
By Andrew Flynn - Canadan Press
Gambling software developer CryptoLogic Inc. said it has insulated itself against tough rules that stop Americans from gambling online, shifting its focus to Europe and boosting third-quarter profits 41 per cent.
Toronto’s CryptoLogic, which will soon move its operations base to Ireland, posted a quarterly profit of $7.2 million (U.S.) as revenue rose 32 per cent.
Earnings for the three months ended Sept. 30 amounted to 53 cents a share and compared with $5.1 million, or 36 cents per share, a year earlier. The third-quarter profits beat consensus analysts’ expectations of 46 cents a share, igniting investor enthusiasm for the company.
CryptoLogic shares gained $1.79 (Canadian), or nearly 10 per cent, to $20.66 yesterday on the Toronto Stock Exchange.
“I don’t think the U.S. debate is over, because the benefits of regulating Internet gaming are overwhelming,” CEO Lewis Rose said during a conference call with analysts.
“For the short term though, our course is clear: we will pursue opportunities elsewhere. We’re in a formidable position; we’ve been preparing for this eventuality for the past five years, successfully shifting our business to the U.K. and Europe.”
On Oct. 13, the U.S. government passed the Unlawful Internet Gambling Enforcement Act into law, effectively banning online gambling in the U.S. The company has now set its sights on the “tantalizing” Asian online gaming market, Rose said.