|Canadian Casino software company Cryptologic posted a fourth-quarter drop in profits of 10%, which the company claims is largely due to a hacker attack last August that saw 140 internet gamblers make off with winnings of around $1.9 million.|
According to Paul Vieira at Canada’s Financial Post, Cryptologic hopes to recover the majority of the loss through insurance, though the company is still taking a $1.3 million charge. At a conference call with analysts on Monday, Jean Nolting, Cryptologic CEO said, “A prudent approach was necessary.”
In just a couple of hours, a computer hacker allegedly broke into CryptoLogic's Web servers and reprogrammed slot machines and a craps table at two Web-based casinos that license the company's software. Slot machine and craps players at the casinos won each time they played.
Nolting said 2002 had potential to be a 'profitable year, with solidly upside potential,' especially in the second half. For this fiscal year, the company forecasts revenue of $45-million to $50-million and profit between $17-million and $20-million.
CryptoLogic said U.S. banks' refusal to accept credit card charges from online gambling sites could negatively affect growth prospects in North America. Credit card rejections in the United States jumped 25% in December due to proposed anti-terrorism legislation and the nebulous legal status of online gambling in North America.
Therefore, the company said, it will be examining offshore markets. 'Europe and Asia -- those will be our key areas,' Mr. Nolting said. By the end of the year, it wants half of its revenue to come from Europe and Asia, the rest from North America. Around two-thirds of its sales now come from North America.