|Internet gambling software developer CryptoLogic Inc. warned last week that its profits will fall as it expands its business in 2003. The company met its reduced financial targets in the fourth quarter of the financial year. |
The company, which supplies the Internet systems and software for online casinos, said it expects a drop in revenue and profits during the current first quarter, telling analysts that revenue will likely be between $8 million and $8.3 million (US$), with profits in the range of $1.2 million to $1.4 million in the first quarter of 2003.
That's a drop from the fourth quarter of 2002 ended Dec. 31, when CryptoLogic earned $2.2 million on revenue of $8.9 million US amid 'ongoing industry wide challenges.' The challenges cited by CryptoLogic include the uncertain legal situation in the US, where Internet gambling is still illegal – although the largest chunk of the industry’s revenues comes from US residents. The US situation is compounded by the refusal of many credit card companies and online payment company Paypal to accept online gambling transactions. CryptoLogic also faced legal challenges in the past year, notably an $800 lawsuit from a former licensee, Las Vegas From Home.com.