Cryptologic Downsizes to Merge Online Poker Network
Since dropping out of the U.S. facing online gambling industry, Ireland-based casino and poker software developer, Cryptologic, had no choice but to reassess its cash flow. Like most other gaming software companies, the majority of their business at one point came directly from the U.S., albeit indirect business through its online casino and poker room licensees.
What made Cryptologic different from its competitors, however, is that they began to move away from the U.S. sector long before the other top-shelf software providers did. In other words, it was as if they knew the UIGEA was coming. Instead of further investing in the U.S. market, Cryptologic began to form alliances and expand in the European sector.
All of this has been taking shape for the last five years. As early as October 2008, Cryptologic announced it would be reducing its operating costs by $13 million before the end of 2009. This would all get done primarily via configuration changes to its poker network, i.e. scaling down and forming more alliances.
One of these alliances will be with the GTECH International Poker Network. Rather than running a stand-alone poker network, Cryptologic hopes to cut down operating costs while giving its poker players access to an even larger network. Projected to be finished by April of this year, the merged network will have approximately 15,000 active poker players.
Further cutting costs, Cryptologic has also let go of its Chief Technology Officer, Michael Starzynski. Apparently, developing new technologies isn’t so much of a priority these days for the software developer (at least the old model of technology development). But I suppose if that’s what it takes to get back on track - “back on track” meaning making profit - investors shouldn’t have any objections. Cryptologic now reports they are on track for generating profit after the second quarter of 2009.
