On Friday, Cryptologic
Let me say right up front that I am not a gambler. I don't see what the attraction is as the house always has the odds in its favor. Call me what you want, it just doesn't appeal to me. But clearly, Cryptologic is doing well at providing the games people want to play, all the while making it as easy as possible for the end users to part with their money (sorry, but I had to get my poke in the ribs in somehow). By offering a nice, bundled package, Cryptologic is your one-stop shop if you want to set up an online casino. And from the chart, that has translated into some excellent returns for shareholders.
Cryptologic has four main products, casino games such as slots, bingo, poker, and transaction management software. Although the company grew across the board, revenues from poker grew the fastest. Poker made up 15% of total revenue compared with 12% last quarter. While on vacation last week, I watched eight World Championship Poker shows on Disney's
I told you about its market-cap chip lead, but let me tell you about another chip count: cash. The company now has $82.6 million in cash and short-term investments in the bank. With 12.85 million shares outstanding, that's $6.50 in cash per share! I take this to mean that company does not make reckless bets. Like all the great Texas Hold 'Em players, it doesn't go all-in unless it knows that the odds are clearly in its favor.
While Cryptologic has developed many ways for end users to pay to play, a major inhibitor of growth comes from large financial institutions not allowing credit cards to be used to gamble online. Firms such as Citigroup
Again, I am not a gambler, and I honestly do not know enough about the odds in this case to make an investment. But the numbers point to the fact that Cryptologic is likely to stay on top as the leader in the online gaming software industry.
Fool contributor David Meier does not own any of the stocks mentioned.