Canadian rival buys $1m stake in Irish online gaming firm Cryptologic

AMAYA GAMING, a Canadian rival of online gambling software specialist Cryptologic, is building a stake in the Irish-based firm.

The Irish company recently hired Deloitte to advise on a strategic review of the business, which could include a sale of some or all of its operations.

It emerged yesterday that Montreal-based Amaya has spent just over $1 million buying 5 per cent of Cryptologic, which has a primary listing on the Toronto stock exchange.

Amaya’s chief executive, David Baazov, signalled the company could continue to buy Cryptologic shares, although he stopped short of saying that it would bid for the Irish group.

Mr Baazov said in a statement that Amaya acquired a stock in order to facilitate a “possible strategic transaction” with Cryptologic.

He added that Amaya would continue to monitor Cryptologic’s business and financial performance.

“Depending upon these factors, market conditions and other factors, and the status of its alternative discussions, Amaya may acquire or dispose of common shares as it deems appropriate,” Mr Baazov added.

Cryptologic develops and sells casino and slot-machine-style internet games, and licenses them to businesses such as Paddy Power, Betfair and Ladbrokes.

The company has been struggling to return to profit since 2009, and is battling falling revenues.

Last year, sales were down a third at $26 million from $39.8 million and it embarked on a cost-saving programme that knocked around $30 million a-year off its overheads.

It announced the review of its business last month, and said the process would consider, amongst other options, the possibility of a sale of some or all of the group.

Chief executive Brian Hadfield left the company in August, and chairman, Irish businessman, David Gavagan stepped into the role on an interim basis, and is still acting in this capacity.

The company was founded in Canada, where is still has part of its key software development operations, but moved its corporate headquarters to the Republic in 2007 as US online gaming restrictions meant more of its business was concentrated in Europe.

Its primary listing is on the Toronto stock exchange.