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CryptoLogic realigns regulatory compliance team; chief operating officer resigns

Internet gambling company CryptoLogic Inc., which has been trying to get U.S. banks to accept the use of credit cards for gambling on the Web, has named two lawyers to its regulatory compliance team.

The company also announced Tuesday that its chief operating officer is resigning, barely more than a week after the resignation of long-time chief executive Jean Noelting.
Chief operating officer, David Outhwaite, will officially resign Aug. 2.

The Toronto-based software supplier said Tuesday that vice-chairman Robert Stikeman will oversee the company's regulatory compliance strategy in conjunction with John Chalmers, a "seasoned lawyer" specializing in gambling law. Stikeman has been a partner for the past 16 years in law firm Stikeman, Graham, Keeley & Spiegel LLP.

Chalmers, retained by CryptoLogic in April, is "one of Canada's leading authorities on gambling law, regulation and enforcement."

"CryptoLogic's commitment to regulatory compliance will continue to set us apart as more and more jurisdictions see the value of regulating Internet gaming to protect consumers," Lewis Rose, the company's interim president and CEO, said in a statement.

In June, CryptoLogic announced it would take a $9.5-million US accounting charge in the current quarter, including a writeoff of the $6.6-million US the company invested in British-based Sports.Com in February. Sports.Com was placed in receivership in May.

CryptoLogic has also cut its revenue and profit outlook for the second quarter and full year.
Revenue projections took a hit after someone hacked into the gaming systems of some licensees last September and rigged the software so that players couldn't lose.
Since then, some credit card companies in the United States have refused to let their cards be used for payment for online gambling, forcing companies to find other methods of payment, such as cheques.