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Credit card refusals hit Cryptologic
Paul Haavardsrud
National Post
Friday, June 21, 2002
CALGARY - Speculation that Cryptologic Inc. would continue to suffer from credit card issuers blocking online gambling transactions was verified late Wednesday when the firm issued an earnings warning for its second quarter.
Shares of Cryptologic, an online gaming software provider, have tumbled 44% since mid-May on concerns the firm's U.S. business would dry up as more credit card issuers took steps to protect against possible federal legislation banning internet gambling.
Gamblers trying to renege on debts racked up online have also made credit card issuers increasingly wary of processing the transactions, analysts said yesterday.
The stock closed down for the fourth consecutive session yesterday, ending off 35¢ at a 52-week low of $11.20 yesterday.
Citigroup Inc. is the most recent financial institution to announce it will no longer process online gaming transactions, extending a problem which, earlier this year, Cryptologic had suggested would ease.
Cryptologic's lowered guidance sees revenue of US$8.8-million to US$9-million, down from original expectations for US$9.5-million to US$10.5-million. The company now expects earnings in the quarter of 15¢ a share to 17¢, down from original expectations for 19¢ to 22¢.
Cryptologic also said it will take a US$9.5-million charge in the second quarter.
Paul Haavardsrud
National Post
Friday, June 21, 2002
CALGARY - Speculation that Cryptologic Inc. would continue to suffer from credit card issuers blocking online gambling transactions was verified late Wednesday when the firm issued an earnings warning for its second quarter.
Shares of Cryptologic, an online gaming software provider, have tumbled 44% since mid-May on concerns the firm's U.S. business would dry up as more credit card issuers took steps to protect against possible federal legislation banning internet gambling.
Gamblers trying to renege on debts racked up online have also made credit card issuers increasingly wary of processing the transactions, analysts said yesterday.
The stock closed down for the fourth consecutive session yesterday, ending off 35¢ at a 52-week low of $11.20 yesterday.
Citigroup Inc. is the most recent financial institution to announce it will no longer process online gaming transactions, extending a problem which, earlier this year, Cryptologic had suggested would ease.
Cryptologic's lowered guidance sees revenue of US$8.8-million to US$9-million, down from original expectations for US$9.5-million to US$10.5-million. The company now expects earnings in the quarter of 15¢ a share to 17¢, down from original expectations for 19¢ to 22¢.
Cryptologic also said it will take a US$9.5-million charge in the second quarter.