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Non-Tech : Cryptologic (CRY/TSE): First Profitable Internet Casino -- Ignore unavailable to you. Want to Upgrade?

To: C.Carlos who wrote (1839)	10/22/1999 3:37:00 PM
From: THOMAS GOODRICH	Respond to of 2782

C.Carlos, There is evidence as you suggest Mr. Levy was welcomed by Cryptologic with prior knowledge that his Las Vegas Casinos operation was in default and at risk of imminent termination by Starnet which actually did occur. The unfortunate circumstance was that those most adversely affected were the customers of Las Vegas Casinos whose deposits were collected via their own merchant account and not through Starnet's e-cash solution. My understanding is that Starnet reimbursed the customers left stranded and has filed suit against Mr. Levy's business operations for recovery.

To: C.Carlos who wrote (1839)	10/22/1999 3:53:00 PM
From: DaveAu	Read Replies (2) \| Respond to of 2782

C. Carlos, I went to several of the sites in August and they were not operational. He has about 40 sites so it's possible some others were running. If he signed in May, then the license fee would have been in Q2 rather than Q3 although in some cases the license fee is not received all at once. Rivkin said it usually takes 2 to 3 months to get a licensee up and running. It's very unlikely that Levy maintained his customer base after the problems with payouts when he was with SNMM. Levy may have been "big" for Starnet but that was only because Starnet was in an early stage and had little revenue. They are a small fish for CRY. CRY is far from perfect but I think you are missing the big picture if you're looking at quarter to quarter comparisons. 57% revenue growth is excellent for any company but is astounding for a company trading at a fully diluted cash adjusted trailing PE of 7. Growth for next year is assured by the William Hill deal. The E-commerce product offers a whole new potential revenue source and may be spun off to shareholders which would likely cause its value to more immediately accrue to current shareholders. Right now, this product is just an expense which makes the gaming earnings appear lower. Remove that expense and immediately you have increased earnings as well as shares of another company that may be valued much higher as a pure play. Be careful not to lose your objectivity because Levy did you some damage on SNMM. His importance there was way overblown. SNMM stock was way ahead of itself and Levy just happened to be the straw that broke the camel's back. I'm not trying to bash SNMM. I now believe it is also a reasonable value given expected high growth in the next few quarters and their recent move out of Canada but I believe it is a higher risk play. Good Luck. Dave