CryptoLogic Takes it on the Chin for $1.3 Million Scam
By Earl
CryptoLogic, the software firm that sells online casino systems for the gambling industry, is reportedly accepting a loss of $1.3 million, without further compensation from insurers, after thieves last August hacked into two online casinos using CryptoLogic software and reprogrammed slot machines and a craps table so that they won every time they played. 140 hacker thieves conned $1.9 before CryptoLogic detected the fraud and canceled the online games.

$600,000 has been recovered from insurers, but the company stated that: 'While the claim is subject to ongoing investigation, the company felt a prudent and conservative approach was appropriate.'

CryptoLogic reported a net income for the fourth quarter of 2001 of $3.7 million, down $400,000 from the Christmas holidays quarter of the previous year. If the scam had not occurred, CryptoLogic would have announced a net income of $4.2 million for this last quarter, the company stated.

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