CryptoLogic Announces Extension Of Substantial Issuer Bid And Conference Call To Provide A 2001 Fourth Quarter Update.

Business Editors

TORONTO--(BUSINESS WIRE)--Dec. 21, 2001

CryptoLogic (NASDAQ:CRYP) (TSE:CRY.)

Company's buy back strategies have helped to enhance value for

shareholders

CryptoLogic Inc. announced today that it is extending its offer to purchase for cash up to 1 million common shares by way of a Dutch auction. The offer was to expire on December 21, 2001, which has now been extended to 11:59 p.m. (Eastern time) on January 11, 2002. As well, CryptoLogic will provide an update on the 2001 fourth quarter in an analyst/investor conference call scheduled for 8:30 a.m. (Eastern time) on January 7, 2002.

"No question our buy back initiatives have helped to enhance shareholder value," said Jean Noelting, CryptoLogic's president and CEO. "CryptoLogic's normal and substantial issuer bids this year have contributed to positive momentum in our share value, which remains 200% ahead of the start of 2001. We continue to view CryptoLogic as an attractive investment, given the company's solid fundamentals. The extension of the bid gives shareholders an opportunity to tender, makes good use of our strong cash reserves and can add positively to earnings per share."

Noelting added, "We are pleased that Cryptologic is one of the few companies that have consistently delivered profitable performance this year, as reflected in the over 30% revenue growth and 45% net margins experienced year-to-date. Fourth quarter revenue in the first two months has also been solid, but we have seen some softness in December. Our licensees have experienced a large number of Jackpot winners, an atypical drop in Internet traffic as well as a higher rate of credit card rejections. These factors have all been experienced earlier this year, but not coincidentally. At this time, it is unclear whether this will have a material impact on our fourth quarter results. We look forward to providing shareholders an update in January."

Pursuant to the Dutch auction, CryptoLogic will purchase shares at the highest price specified by shareholders which is sufficient to ensure that all 1 million shares are purchased and is subject to a maximum price of Cdn$28.00 per share and a minimum price of Cdn$25.00 per share.

The company's normal course issuer bid continues to be suspended until the expiry of the substantial issuer bid. CryptoLogic's normal course issuer bid authorizes the company to repurchase up to 656,000 common shares and expires on May 17, 2002. In this current plan up to November 12, 2001, the company has repurchased 275,000 shares or almost 42% of the authorized amount. For the 2001 year-to-date, CryptoLogic has bought back almost 1.4 million shares at a cost of US$17.3 million through its normal and substantial issuer bids.

Analyst Call

A conference call has been scheduled for 8:30 a.m. (EST) on Monday, January 7, 2002. Interested parties should call either 1-800-478-9326 or 416-695-5801. Instant replay will be available until January 14, 2002 by calling 1-800-408-3053 or 416-695-5800, passcode 1010553.

About CryptoLogic

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 13.1 million common shares outstanding (15.6 million shares fully diluted). For information on CryptoLogic and WagerLogic, the licensing subsidiary of CryptoLogic, please visit www.cryptologic.com and www.wagerlogic.com.

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.