Cryptologic To Make Substantial Issuer Bid For Up To 1 Million Shares.

Business Editors

TORONTO--(BUSINESS WIRE)--March 13, 2001

CryptoLogic  (NASDAQ:CRYP)(TSE:CRY.)

Share Repurchase Offer Provides Opportunity to Tender

Shares At a Premium to Current Market

The Board of Directors of CryptoLogic Inc. ("CryptoLogic") today announced that the Corporation will make an offer (the "Offer") to purchase for cash up to 1,000,000 of its outstanding common shares (the "Shares") by way of a dutch auction process.

Pursuant to this process, CryptoLogic will purchase shares at the highest price specified by shareholders which is sufficient to ensure that all 1,000,000 shares are purchased and is subject to a maximum price of Cdn$19.00 per share and a minimum price of Cdn$17.00 per share (the "Purchase Price"). The Offer will expire at 5:00 p.m., Toronto time, on April 9, 2001 unless withdrawn or extended (the "Expiry Time").

CryptoLogic and its Board of Directors have unanimously determined that the Offer represents an effective use of CryptoLogic's resources. The Offer is expected to have a positive impact on earnings per share, without precluding CryptoLogic from pursuing future business opportunities.

"We feel that CryptoLogic's shares are an attractive investment, given the company's high quality earnings, positive cash flow and strong balance sheet," said Jean Noelting, CryptoLogic's president and CEO. "The offer makes good use of our cash reserves, helps enhance shareholder value and maintains sufficient working capital for CryptoLogic to take advantage of growth opportunities including acquisitions."

CryptoLogic reserves the right to withdraw the Offer and not take up and pay for any shares deposited pursuant to this Offer unless a number of conditions set out in the Offer are satisfied. The Offer is not conditional on a minimum number of shares being deposited pursuant to the Offer.

The Offer provides that if, prior to expiry, more than 1,000,000 Shares are properly deposited at prices at or below the Purchase Price and not withdrawn, CryptoLogic will purchase at the Purchase Price 1,000,000 Shares so deposited on a pro rata basis. In order to avoid the creation of "Odd-Lots" as a result of proration, in the event of an over-subscription the number of Shares to be purchased by CryptoLogic from each depositing shareholder will be rounded up (rounding up is subject to regulatory approval) such that CryptoLogic will purchase an additional number of Shares from such depositing shareholder equal to: (i) the difference between the number of Shares to be purchased from such depositing shareholder as a result of proration and the next highest whole multiple of 100 Shares properly deposited by such shareholder to the Offer; and (ii) the balance of the Shares properly deposited to the Offer by such shareholder, whichever is less. Multiple tenders by the same shareholder will be aggregated for this purpose. In addition, if, as a result of proration after giving effect to the purchase of 1,000,000 Shares by CryptoLogic, a depositing shareholder were to hold fewer than 100 Shares, CryptoLogic will purchase all such Shares at the purchase price provided such Shares are properly deposited to the Offer.

The Offer provides that shareholders that wish to deposit their shares must deposit a duly completed and executed Letter of Transmittal, together with share certificates representing their Shares, by mail, hand or courier, with the Depositary in Canada, Equity Transfer Services Inc. at its principal office in Toronto, or by hand in the United States with Continental Stock Transfer & Trust Company, so as to be received there prior to the Expiry Time. Shareholders who wish to tender their Shares but whose shares certificates and other required documents are not readily available should follow the procedure for guaranteed delivery contained in the Offer.

The directors and officers of CryptoLogic have advised that they will not tender any of their shares to the Offer.

No fees or commissions will be paid for soliciting tenders of Shares pursuant to the Offer.

The Offer is in addition to CryptoLogic's normal course issuer bid, which authorizes the corporation to repurchase up to 561,000 common shares and expires on May 16, 2001. Within this current plan, CryptoLogic has bought back over 460,000 shares or almost 82% of the authorized amount to date. CryptoLogic will continue to make use of this buy back program.

About CryptoLogic

CryptoLogic Inc. is the leading software development company serving the Internet gaming market. The corporation'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 electronic commerce and Internet gaming industries.

CryptoLogic's common shares trade on the Toronto Stock Exchange under the symbol CRY and on the Nasdaq National Market under the symbol CRYP. There are currently approximately 14.0 million common shares outstanding (16.7 million shares fully diluted). For more 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 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.