CryptoLogic Announces Expectations For Third Quarter 2000.

Business Editors

TORONTO--(BUSINESS WIRE)--Sept. 29, 2000

CryptoLogic (NASDAQ:CRYP)(TSE:CRY.)

Version 4.0 rollout and launch of newest licensees spur

positive momentum

CryptoLogic Inc., a leading software supplier to the Internet gaming and e-commerce industries, anticipates that results for the third quarter ended September 30, 2000 will be lower than analysts' estimates.

Third quarter performance continued to be impacted by the timing of the version 4.0 roll out as well as aggressive investment to launch a rapid succession of major new licensees on and ahead of schedule.

Management expects total revenue for the third quarter in 2000 to be approximately US$9.0 million, an increase of 12.5% compared to US$8.0 million in the 1999 third quarter. The Company's net income is expected to be US$2.7 million compared to US$4.8 million in the 1999 third quarter. Management expects that net margins will average over 40% for year 2000.

"2000 has been a pivotal year, focused on advancing the company to the next level with next generation technology, significant infrastructure investment and adding leading land-based licensees," said CryptoLogic's president and CEO, Andrew Rivkin. "Although the growth numbers for this year have been modest, we are confident that our strategy will bear positive results and solidify our global leadership. By year end, CryptoLogic will have online the largest number of brand name Internet gaming licensees in the world with the brand power, top-notch technology and financial strength to gain major market share."

Mr. Rivkin added, "CryptoLogic continues to be a fundamentally solid organization, with the highest revenue, profitability and cash position in the industry. Version 4.0 is now out, marketing campaigns are underway, eBet's casino is launched ahead of schedule, and the remaining licensees will be ready to go shortly. The fourth quarter is looking good and the outlook for 2001 is promising, with stronger growth rates expected for next year."

With version 4.0 introduced later than expected, the revenue surge anticipated in the latter half of 2000 has now shifted largely into the first quarter of 2001. Management expects that the ongoing rollout of version 4.0 and the launch of the remaining licensees will have the desired top line results.

Expenditures were also higher than expected in the third quarter as a result of adding major new licensees. CryptoLogic accelerated investment in development and support services to get new licensees up and running quickly as well as enhancing infrastructure capacity and continuing software certification in Australia. The company continues to maintain profitability and expects this to improve in the foreseeable future as today's investments drive a significant increase in revenues.

CryptoLogic continues to view its shares as an exceptional investment at current prices. Since renewing it share buy back program in mid May, CryptoLogic has bought about 40% of the authorized amount or 217,600 shares.

Preliminary third quarter numbers are estimates only and actual results may vary. Final results for the third quarter of fiscal 2000 will be reported by the end of October, 2000. Analyst Conference Call

An analyst/shareholder conference call to discuss the preliminary results has been scheduled for Monday, October 2, 2000 at 11:00 a.m. (Eastern). Interested parties should call either 1-800-478-9326 or 416-695-5801.

About CryptoLogic Inc.

CryptoLogic Inc. is the leading software development company serving the Internet gaming market. The company's proprietary technologies enable secure, high-speed financial transactions over the Internet. CryptoLogic continues to innovate and develop state of the art Internet software applications for both the electronic commerce and Internet gaming industries.

CryptoLogic's common shares trade on the Toronto Stock Exchange under symbol the CRY and on the Nasdaq National Market under the symbol CRYP. There are currently 14.3 million common shares outstanding (15.8 million shares fully diluted). CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:

Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation risks associated with the Company's financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company's filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking statements.