Effect of US Ban on Online Casino Business
Online casino software producer CryptoLogic Inc. said is a report released last week that its fourth quarter profit has seen a drop of considerable size directly associated with the ban passed by the United States authorities on online casino gambling. The drop is of 70.6% and brings business to a mere $1.7 million in the final quarter of 2006. These months have been significant to the online casino industry and were carefully watched, the numbers to them highly anticipated by investors and analysts, as they follow the late September passing of the ban that changed the nature of the US online casino business.
A year earlier, in the same period, back when the online casino industry in the US was the largest and most profitable on the planet, the company’s shares yielded $5.8 million. Not only was traffic limited and services dwindled on the site due to the ban, but so were added reorganization costs of no less than $1 million in moving the company’s headquarters to Ireland. The online casino company is still seeing money pass under its inspection, as gamblers still play at some level, even if lower than what the industry has been used to in the past. Revenue was $19 million for the quarter, passing the $100 million mark for annual revenue (it reached $104 million).
The US ban was admitted by company officials who spoke on the matter. But as the online casino software company has already shifted its focus to Europe and the international market, the effect was “less serious” than for other online casino companies. The company’s president and CEO said, rather optimistically: “While 2006 was a challenging year for the industry, it was another record year for CryptoLogic – and we enter 2007 with both focus and momentum.”