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Why Cryptologic Will Fail - Shareholders In This Company Have Begun To Seriously Query Why, With Their Relative Artificial Success, The Shares Have Been Under Performing For A Very Long Time.
Shareholders in this company have begun to seriously query why, with their relative artificial success, the shares have been under performing for a very long time.
The Rivkin brothers had no money when they formed Cryptologic and so they turned to Bill Scott, a man sued for tax fraud, illegal gambling, and heroin dealing who had plenty of dirty money available that needed laundering.
One of their casinos, Intercasino, did relatively well with the drug money. Bill Scott is the front man for Cryptologic and it seems likely that Bill Scott was the purported licensee of Intercasino. Cryptologic denied for years that the casino belonged to them but used the figures to inflate the returns in order to push up the share price of the public company.
It means that the number one source of revenue for Cryptologic (Intercasino) came from a pretend or fake licensee (Bill Scott the heroin dealer). Cryptologic has been using the money generated by this casino to make their sales figures look better than they would have been if a real licensee had been in control of Intercasino.
The implications are that Cryptologic, as a public company, has misled investors for years about the true ownership of Intercasino, and that the company was originally financed by a known and convicted criminal, and that these associations have continued.
The apparent relative success of the company showed for some time in the company's stock, the shares of which at one time were priced at over $ 40.00.
Today, the picture is looking very bad and getting worse by the day. The supply of licensees, who were once queuing up to be part of the online gaming business, has begun to dry up. One licensee has already confided to this magazine that becoming a Cryptologic licensee was the worst business decision he had taken in his entire 35-year career in business.
The refusal to supply any figures was a major source of contention. Without an accurate breakdown of real figures, how can any licensee know how well his business is doing and how much is Cryptologic stealing?
The software developers simply made up their own rules and did what suited them. The legitimate concerns and grievances of players and licensees were ignored. They acted as if they were beyond the law, and they made up their own laws as they went along.
Shareholders were granted the occasional conference call in order for them to receive pep talks from directors who concealed from the shareholders leading information about the true nature of some of the shady deals done by those same directors.
Investors have already seen the light. They have learnt not to put blind trust in corporate managers, led by crooked auditors and accountants. Investors want to put their money in clean companies and want nothing to do with organized crime.
That's why in the long term companies like Cryptologic and World Gaming (the infamous Starnet Communications), will keep on struggling in a dwindling market, where licensees, investors and players have all become less naïve and more concerned with the quality of corporate governance. That's why ultimately they will fail.
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