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Operator: Good afternoon, ladies and gentlemen, and welcome to the Cryptologic Limited conference call. At this time I would like to turn the meeting over to Mr. Andrew Rivkin. Please go ahead, Mr. Rivkin.

Andrew Rivkin: Thank you for joining us this afternoon. I'm Andrew Rivkin, President and CEO of CryptoLogic. Here with me today are Mark Rivkin, COO and Executive Vice President, Jenny Solursh, Senior Vice President, and in Toronto we have Harvey Solursh, Chief Financial Officer, Nelson Lee, Director of Finance, and Nancy Chan-Palmateer, Director of Communications.

We wanted to take this opportunity to speak to our revenue and earnings expectations for the first quarter of 2000 and provide an update on CryptoLogic's continued growth prospects. Afterwards we would be happy to take any questions.

For the first quarter ended March 31st, 2000, we are expecting revenues to be approximately US$8.9 million compared to US$8.3 million in the first quarter of 1999 and US$8.6 million in the fourth quarter of 1999. The company's net income is expected to be US$4.2 million and that compares with US$5.5 million in the first quarter of 1999 and US$4.7 million in the fourth quarter of 1999 before unusual items. These are preliminary numbers and may vary from the finalized results, which will be announced at the end of April.

Although revenue in the first quarter of 2000 is expected to show modest growth and earnings will be down due to increased expenses, CryptoLogic continues to be a strong organization with solid fundamentals and excellent growth prospects.

During the first quarter a number of factors impacted our financial results. Firstly, William Hill's Internet Casino went live on January 12th, 2000, with the results of its marketing program taking hold in March. Therefore, William Hill will not have a major impact until the second quarter. We are delighted with the William Hill success to date. They are very quickly advancing to become one of our highest revenue-generating licensees. With the growing impact of William Hill and their strong brand name, CryptoLogic expects their casino to contribute significantly to our revenue growth. The majority of their revenue is coming from the U.K., Europe and Asia, which increases our international revenue as well.

Secondly, version 4.0 of our Internet gaming software is now scheduled to be released in the second quarter. The release of a new version typically causes a rise in revenue, which CryptoLogic saw in the first quarter last year with the release of version 3.0. A new version gives licensees the opportunity to increase marketing, to market to new and existing users and generate new and renewed interest. Our version 3.0 already offers an exceptional Internet gaming experience. With Version 4.0, we will increase our competitive advantage even further.

We have also been investing in developing Version 4.0, infrastructure and increased business development initiatives to drive our long-term growth. During the first quarter of 2000, software development and support expenses increased to about 40% of total revenue compared with 32% in the fourth quarter of 1999 and 24% in the first quarter of 1999. The first quarter of 2000 expenses were associated with increased development cost for Version 4.0, a growing employee base, a new support facility in Antigua and a new marketing office in the U.K. Other expenditures were related to the Nasdaq listing, our Australian certification and heightened business development activities. All these initiatives are enabling CryptoLogic to continue to offer the best software available and attract premier brand names like William Hill and Jupiters of Australia.

On a separate note, CryptoLogic has recently repurchased shares on the open market. At today's low prices, we believe our shares are a good investment given our solid fundamentals and growth potential.

CryptoLogic is growing rapidly and has entered the next growth phase. We were the first in the industry to sign major brand organizations. We are in active discussions with a number of major groups in Europe, Asia, Australia, and feel optimistic that we can add more premier licenses like William Hill and Jupiters. Our increased expenditures serve to build a long-term strong infrastructure to support our growing brand name licensee base.

CryptoLogic continues to be a highly profitable organization, leading our industry in performance and technology. As a high tech company, we have very conservative accounting policies, high quality net earnings and a strong cash position. We are proud of what we have achieved to date. We have shown superior performance measured against our competitors and other Internet companies. We believe that growth will continue and we'll have strong growth momentum in 2000. We'd now be pleased to open the floor for questions.

Question and Answer Session

Jamie Rome: Hi, Andrew. Two quick questions. One, is the expectation that the current quarter that we're in right now will generate higher revenues and earnings than the first quarter, than the March quarter? And secondly, can you talk a little bit about the cash engine development, the Internet cash engine development program?

Andrew Rivkin: In terms of the first question, yes, we expect stronger revenues in the second quarter. You know, at the same time, business development that we're doing, our Australia certification, our program to attract major brand name licensees are still in progress. So that will continue to have an impact on earnings in the second quarter and perhaps even beyond. But with respect to revenue, we're expecting stronger revenue due to William Hill and increased marketing of all our licensees related to Version 4.0.

In terms of the e-cash software, I guess the decision is now in the hands of the Independent Committee of the Board. The software is completed. It's ready to be released. We're looking at adding a number of initial merchants to test the technology over the next very short period. So I believe we've very close to getting that product out to the marketplace.

Jamie Rome: Thank you.

Operator: Thank you. This question now comes from Orin Hirschman of Adam Smith and Co. Please go ahead.

Orin Hirschman: Hi. I apologize for my voice. It's a little weak today. Can you go over the competitive landscape if anything's changed there, and can you indicate besides William Hill some of the other contracts that are going to come into their own over the next few quarters? I would guess in there somewhere you might quote a backlog of the contracts?

Andrew Rivkin: I can't talk about future contracts because until it's signed. There's always risks that licensees will go someplace else. In terms of the industry in general in competitive landscape, I mean CryptoLogic really has signed the two premier branded companies who've gone into the Internet gaming industry. Of course, that's William Hill and Jupiters. Our strategic vision for 2000 and 2001 is to become the software provider of choice for the major brand organizations. I think that we are certainly in the best position competitively to achieve this. I'm not sure that there's anybody else who can support the kind of volume of transactions and also support the branded licensees in the area of marketing and do the things that these major groups need to have done in order to have a successful Internet casino. So from a competitive perspective I think that we're in a very, very good position. These groups are getting into the industry now and we're in a very good position to do business with the majority of them.

Version 4.0, I think, is going to help as well. Obviously, as we release new technology, that will drive business for our existing licensees and also help us to attract the major branded groups as well.

Orin Hirschman: And just to follow up, you had mentioned that earnings may still be under a little bit of pressure because of the development and some of that's related to Version 4.0, getting that out this quarter as well, correct?

Andrew Rivkin: Well, it's related to Version 4, Australian certification.

Orin Hirschman: E-cash?

Andrew Rivkin: E-cash. There's also expenses related to attracting the major brands. I think that the earnings pressure will continue, but what we're experiencing is increased expenditures which really we feel will have a very strong impact on long-term growth. So this is money that we feel is extremely well spent.

Orin Hirschman: So we can still have quarter-over-quarter progress both top line and bottom line?

Andrew Rivkin: I think that earning US$4 million or approximately US$4 million in the first quarter and still being able to accomplish the things that we accomplished in the first quarter is terrific. I mean obviously there's some pressure on earnings. It wasn't as good as the fourth quarter. It wasn't as good as the first quarter of previous year but, we've invested that money in things that we think are going to have a very positive impact in the future. So there will continue to be pressure but I think that will pay off in a very large way in the future. I mean these relationships that we're creating are five-year plus relationships, so to have some pressure in a couple of quarters is to my mind something that is going to benefit the company in a big way in the future.

Orin Hirschman: Okay, and my last question is in terms of development of e-cash. I realize it's a long-term project, but are you tracking where you'd like to be?

Andrew Rivkin: I think the software is ready. That's important to us, and I think that we're very close. We've been discussing this project with a number of financial advisors over the last month or so. The Independent Committee of the Board I believe is very close to making a decision in terms of which group to go with, and I think that we'll see that product released in the near future.

Orin Hirschman: Okay. Thanks very much.

Operator: Thank you. And our next question comes from Richard Whitman of Palisade Capital. Please go ahead.

Richard Whitman: Two questions, please. I heard you briefly say something about the buyback at the beginning of the call, but I didn't hear an announcement of what the exact authorization on the buyback was. And number two, from a business perspective are there any potential acquisitions that you see out there that might be attractive for CryptoLogic?

Andrew Rivkin: In terms of the authorization, we are authorized to repurchase about 377,000 shares as part of our Normal Course Issuer Bid, which is ending May the 12th, 2000.

Richard Whitman: Okay.

Andrew Rivkin: The number of shares is not really important. At today's low prices I think that our stock is a very good investment. Could you give me your second question again?

Richard Whitman: Are there any potential acquisitions that you see out there over the next year or so?

Andrew Rivkin: I think that there's a number of potential acquisitions that we are looking at and we have obviously a very strong cash position. We'd like to put that to use. We're hopeful that there will be some consolidation within the industry which CryptoLogic is in a very good position to head up. We're hoping that there may be some consolidation even within our group of licensees, in other words, facilitating our licensees purchasing other revenue-generating casinos out there, which we can help facilitate. So there are also opportunities outside of the Internet gaming industry as well, which we always continue to explore and hopefully some of that will come to fruition over the next year.

Richard Whitman: Okay, thank you.

Operator: Thank you. And our next question comes from Cliff Greenberg of Baron Capital. Please go ahead.

Cliff Greenberg: Hi, guys. Congratulations. Could you dissect, please, what the balance sheet looks like at the end of the quarter, how many shares are outstanding, what the cash levels are and how much stock you did buy back. If you purchase this first load would you be interested in doing... buying additional stock with the cash that you have?

Andrew Rivkin: Harvey, can I give the first few components of that to you?

Harvey Solursh: Hi. As far as the balance sheet is concerned, the stock position would be outstanding approximately 11.1 million and the fully-diluted would be about 15.8 million.

Cliff Greenberg: Okay.

Harvey Solursh: As far as the buyback is concerned, the company has bought back some shares. I'm not sure of the exact number but it's not a great number at this point, but they are in the market and supporting the stock when they see the opportunity to buy.

Cliff Greenberg: Okay. And if you finish this authorization are you considering or what is the process to get additional authorization?

Harvey Solursh: That would be up to the Board of Directors for the repurchase program but I assume that the Board would again re-institute a buyback program for the following year.

Cliff Greenberg: What is the cash position of the company right now?

Harvey Solursh: The cash position of the company right now is in excess of $50 million. It's more than $50 million, it's like US$51 million.

Cliff Greenberg: Okay, great. Thank you very much.

Harvey Solursh: You're welcome.

Operator: Thank you. And now the following question comes from Tom Catlett of Salomon Smith Barney. Please go ahead.

Tom Catlett: Could you please give us an update on where the Kyl Bill stands?

Andrew Rivkin: The Senate has approved the Bill. That happened quite some time ago. The House version of the Bill is currently under review by the Judiciary Committee before it can go to the full House for a vote and may still be subject to hearings from other committees as well. Differences between the House and Senate versions, assuming the House Bill passes legislation, would still have to be reconciled and approved by full Congress before the final Bill would be sent up to the White House.

There are numerous carve outs or exemptions in the Bill that would allow some forms of Internet betting and it is believed this will undermine the impact of the Bill. It's difficult to determine the outcome of the Bill and any impact on the industry. We continue to monitor the legislative process.

Regardless of this, we are focusing on expanding our reach into new international markets as part of our growth strategy. Our software is already used in 240 countries around the world. Continued diversification allows us to grow our business outside the U.S. For, for example, William Hill is highly focused on international markets, Jupiters will be highly focused on international markets, and I believe the other major branded licensees who we're hopeful to do business with in the near future will also be focused outside the U.S. as well. Did that answer your question?

Tom Catlett: Thank you.

Operator: Thank you. And now we have a question from Dennis Boyko, private investor. Please go ahead.

Dennis Boyko: Hi. I have two questions. Have you started beta testing the 4.0 with your customers and your licensees, and the second question, if you could comment on, as your major licensees increased their betting transaction flow, does that incrementally add to your bottom line?

Andrew Rivkin: In terms of beta testing, we are doing internal testing on the software. Some of our licensees have seen Version 4.0 and are testing the software for us as well. It's certainly being tested by the vast majority of the CryptoLogic group. Could I have your second question again?

Dennis Boyko: Sure, and thanks for the first one. I wanted to understand if you could comment as your major... like William Hill and Jupiter, as their betting transaction volume increases using their systems, does that impact and add to your bottom line in terms of revenue flow from them?

Andrew Rivkin: Absolutely. I mean the business model for CryptoLogic has not changed. We have licensed our software to groups like William Hill and Jupiters and as users utilize our software, we generate license and support fees as a direct result of that. So absolutely, it's a very important part of how we believe we're going to be growing in the year 2000 and 2001.

Dennis Boyko: Oh, excellent. Thanks.

Operator: Thank you. And now this question is from Peter Riley, private investor. Please go ahead, Sir.

Peter Riley: Hi. I have two questions. First, what percentage of revenues were from U.S. sources? I know in the past it's been about 65%. Has that declined? And could you give us a sense of where you expect it to be in the second quarter also? And also, gross margins. Apparently they were substantially lower in the first quarter. Can you give guidance as to where you would expect the long-term business model to produce in terms of gross margins and also SG&A expenses? Thanks.

Andrew Rivkin: In terms of revenue, again as we said earlier, William Hill did not have an impact on our first quarter. We expect them to have a bigger impact in the second quarter. So in terms of international revenue, probably for the first quarter and again these are not numbers that I have in front of me. The quarterly information for the first quarter just came out. This is the kind of thing that we'll be able to answer in more detail at our first-quarter conference call, which is going to be the end of April.

I think that probably 60, 65% is where we would be sitting after the first quarter. William Hill and the other international initiatives like Jupiters will have a great impact in the future and serve to drive that down below 60% and hopefully below 50%. The majority of William Hill's revenue comes from the United Kingdom and Asia as well. In terms of margins, you know, the margins are lower as a result of increased expenditures on business development initiatives, not increased costs in terms of transaction processing. In fact, transaction processing has not changed or has gone down over the past few years. That means I believe, in the future as these business development initiatives wind down, in other words once the suite of major branding groups gets into the industry and there's no more expenditures related to that, and the Australian certification is complete and everything's done, we could maintain our 62, 60% margin that we've achieved in the past. So that's my opinion of where our pure operating margins should sit. I think that there's going to be at some period of time where we will continue to spend significant dollars to fuel our long-term growth. So when we get back there, really I can't say with any great certainty right now.

Peter Riley: Okay. Thank you.

Operator: Thank you. And at this time our next question comes from Jack Pitts of Steadfast Financial. Please go ahead.

Jack Pitts: Hi. Could you tell us how the win percentage at the casino level affected sales this quarter and could you compare that win percentage to the December '99 and March '99 quarters?

Andrew Rivkin: We actually don't look at win percentage. Our licensees look at win percentage. I think that the revenue model that fits the company better than looking at transactions and bets and things like that is subscriber-based model. In other words, there is a certain user base which belongs to a licensee and that user base will generate X revenue per month, and they seek to add to their subscriber base effectively. They tend not to look too much at win percentages also. It's not as accurate a projector as a subscriber-based model.

Jack Pitts: Okay. Well, along those lines then, what can you tell us about the customer account this quarter versus December and March '99?

Andrew Rivkin: Well, it's certainly increased. I don't have those numbers in front of me again. When we get to our first-quarter conference call at the end of April when we release our full results we'll be able to answer that question in better detail. I believe that's going to be April the 28th actually.

Jack Pitts: Okay. Thank you.

Operator: Thank you. And we now have a question from Michael Moriarty of MJM Partners. Please go ahead.

Michael Moriarty: Yeah, hi. When specifically are you expecting to release the 4.0 Version?

Andrew Rivkin: It's going to be in Q2. Again, we're in internal beta tests right now. I can't give you an exact date but...

Michael Moriarty: In the first half of the quarter or the second half?

Andrew Rivkin: Well, I think it's going to be the first half of the quarter. We're very excited about the software. We believe it's going to far surpass what our competitors are doing now. It makes it very difficult for people to keep pace when you take a look at this version. It includes a whole bunch of new functionality, new games, tournaments, dealer and player avatars, photo-realism, real audio streaming. It's a very comprehensive release and as I said, we're very excited about it. My guess would be first half of the quarter.

Michael Moriarty: Thank you.

Operator: Thank you. And our next question comes from Richard Murray, private investor. Please go ahead.

Richard Murray: Hello, gentlemen. I'm concerned about a particular web site that a licensee of yours runs and is being run by Claude Levy. The web site is gamblingmagazine.com, and I want to know if you guys are aware of this and what you're doing to prevent this damage from occurring in the industry.

Andrew Rivkin: Unfortunately, CryptoLogic does not have any editorial say on that particular site. There's really not a whole lot we can do about that. That is a site, which is maintained... I believe even Claude Levy does not have editorial privileges there. Although, some of the things that are said on the site are slanted towards his brand and things like that. But it's certainly beyond the control of CryptoLogic. I mean that's part of the Internet in general. You have the ability to say what you like. Whether people listen or look at that site, I don't know. He's not one of our larger licensees. He does not have a significant impact on the business model, on the CryptoLogic business model.

Richard Murray: Well, it's very unfortunate that he's performing those kinds of activities and I guess we can all just hope he doesn't damage the industry.

Andrew Rivkin: I agree with you. I think that it's unfortunate, but there's not a lot we can do about it. With the Internet you have the freedom to voice your opinions and do the kinds of things that you could not do in the real world. It gives people tremendous freedom. That's what has created the Internet gaming industry, is people's ability to freely choose what they like to do on the Internet. I just hope not too many people are looking at that site, that's all.

Richard Murray: Well, let's hope. Thank you.

Operator: Thank you. This question is from Arthur Waldmann, private investor. Please go ahead.

Arthur Waldmann: Hi. Most of my questions have been answered but a couple of small ones. Are you ever planning to pay any dividends?

Andrew Rivkin: Certainly not in the near future. We're using that cash, or hope to be using that cash to fuel growth long-term.

Arthur Waldmann: I see. Do you have any guess as to why your stock has plummeted in the last couple of weeks?

Andrew Rivkin: Well, I think certainly a part of it has been the market has been volatile in general over the past month. Technology stocks in particular have been beaten up. CryptoLogic is not immune to those kinds of market conditions. There are a number of technology stocks which have declined 50% since their high approximately a month ago. At the same time, it's important to remember that not very long ago CryptoLogic was trading around $20. So I think that we look at this as a positive share price and hopefully market conditions in general will improve and that will serve to further strengthen the CryptoLogic price as well.

Arthur Waldmann: When the Kyl Bill gets passed, will that have any significant effect on you other than the United States investor?

Andrew Rivkin: Well, I think it's just too difficult to determine the outcome of the Bill today and with that in mind it's almost impossible to determine what the impact will be to the industry. You know, we continue to monitor the process and I'm encouraged by the fact that it's already April. There's still a Judiciary Committee hearing, there's potentially other committees who have interest in looking at the Bill and the carve outs in the Bill, which actually, many of the anti-gaming groups are looking at a situation where this Bill will actually allow more gambling in the home than without the Bill, is serving to I guess derail Kyl's efforts. So we're optimistic. It's late in the game already for Kyl. Obviously anything can happen and we continue to follow the situation.

Arthur Waldmann: Great. And everything else I had was answered.

Andrew Rivkin: Okay. Thanks.

Operator: Thank you. Next question is coming from Rick Palone of Haywood Securities. Please go ahead.

Rick Palone: Hi. With respect to your earnings estimates that are out there right now it looks like the street consensus are US$2 this year, $3 next year, but a 50% earnings growth per year. Are you comfortable with that going forward?

Andrew Rivkin: Harvey, would you mind taking that one?

Harvey Solursh: We believe our analysts are out at $1.50, $1.60 fully diluted for 2000. We haven't seen estimates at $2 like you're suggesting.

Andrew Rivkin: Those must have been some earlier estimates.

Rick Palone: Thank you.

Andrew Rivkin: You're welcome.

Operator: Thank you. And the following question comes from Jason Keogh of MRS Securities. Please go ahead.

Jason Keogh: Hi. I'd like to talk a little bit about the e-cash. What type of customers are you looking for with that product?

Andrew Rivkin: I guess there's a number of groups which we believe will be interested in the technology. First of all, one important group will be the transaction processors, the traditional transaction processors like the banks, credit card companies, who can brand this technology, license the technology from CryptoLogic, brand it in their own way and utilize it as if it was their own. In addition, there are web retailers, just general Internet merchants, people on the net who have things to sell who I think will be very interested in using the technology. And finally, the technology is very consumer oriented, it's very end-user oriented. It actually can be used just by people, sort of average Internet users to settle transactions among themselves. So there's three major groups I think will be interested in the technology.

Jason Keogh: Okay. And how do you think it's going to generate its revenue? Is it transaction-based?

Andrew Rivkin: It's going to be transaction-based. I think, the vast majority of the early-stage revenue will probably come from advertising and as I mentioned, it is set up to be branded by different groups who may want to utilize the technology. There will be revenue generated from that. There will be some transactional revenue as well, but again this is a very long-term project, which really in the initial stages we'll be looking at growing the user base. So we won't be looking too much at short-term revenue. We'll be looking at usage and trying to make this a standard within the e-commerce industry.

Jason Keogh: Okay. Do you see anybody out there right now as your key competitors or maybe your key competitors?

Andrew Rivkin: I think that there's a number of people out there who are obviously, many, many groups in e-commerce. I don't think that there's a competitive product to the CryptoLogic e-commerce system today. I think that there have been, some initiatives in the past which for some reason or other were not brought to market. I think that right now with the growth in terms of transactions on the Internet the number of people who are using credit cards and other mechanisms to purchase things on the net, that this technology is really ready for the marketplace and the marketplace is read for it.

Jason Keogh: Okay. And what different things differentiate your product from other products out there?

Andrew Rivkin: Well, I mean just right off the bat, we've got a working micro-payment engine. There have been a number of attempts at solving the micro-payment problem but nothing has ever come to fruition. There's the ability to support and handle exchanges within the system for currencies, commodities, loyalty points, virtually anything. So the merchant is really capable of controlling what currencies or commodities they're accepting within the e-cash environment and I think that that's something that's unique and very difficult to describe in the time that we have here today.

Jason Keogh: Okay. There's also been talk about taking that segment of your company public. Would that be possibly a spin off of the dividend to investors or would you be going to the capital markets for that?

Andrew Rivkin: That is certainly a possibility. It's something that we've looked very carefully at. We've also looked at a private company with CryptoLogic owning interest in this new e-cash company. Obviously it's a wholly-owned subsidiary today, but we are looking at partners and strategic investors for this technology right now. So how that's going to shake out, I don't know. It's in the hands of the Independent Committee of the Board and I think that they're very close to a final decision there.

Jason Keogh: Okay. Just one more question about your casino software and the licensing of it. In the past conference calls, you had mentioned that you were going after a major South African company to be a possible licensee. Is that still the case or are you not going after anybody in South Africa right now?

Andrew Rivkin: Well, I think that we're looking at this as being a global marketplace. We're looking at potential licensees in all parts of the world. If there's a major group with a major brand then we're actively pursuing relationships with those groups.

Jason Keogh: Okay. Thank you very much.

Operator: Thank you. And we now have a question from Michael Cook, private investor. Please go ahead.

Michael Cook: Yes, my question was now that your company is listed on Nasdaq what initiatives are you taking to broaden the coverage of the company by U.S. brokerage firms?

Andrew Rivkin: Listing on Nasdaq has already helped to increase our profile, enhance our credibility in particular with major organizations such as William Hill and Jupiters. We realize that the Nasdaq listing needs to be supported with efforts to raise our profile in the U.S. capital markets.

We are planning a road show in May to major U.S. centers including New York, Boston, the West Coast. We will be leveraging our relationships with our U.S. sponsors, Salomon Smith Barney, Fahnestock and Pacific Crest as well as existing institutional investors to help make introductions to analysts and new institutional, retail investors.

Michael Cook: Thank you, Andrew.

Operator: Thank you. And our next question comes from Sudhir Khanna of Ekhanna.com. Please go ahead.

Sudhir Khanna: Hi. Actually, most of my questions were answered while I was waiting. But I still have a couple of questions if you don't mind. The next version of the software, it seems that it's going to be a very rich piece of software and from what I understand most of the capacity outside of the U.S. is still basically on 56K lines and once the industry moves to wireless appliances and so on, is there a danger in that your software is going to be too rich for that market?

Andrew Rivkin: Actually, we've improved the ability to distribute the technology with Version 4.0 as well. I think that that was one of our very important goals. The software is downloaded modularly so as there is capacity available bandwidth for the user they receive the technology, which I think is a very important way of distributing the technology especially in the international marketplace. At the same time the speed at which we're able to deal with transactions in Version 4.0 is the same as it is in Version 3.0 which effectively means insignificant. So as the player makes a request...

Sudhir Khanna: Right.

Andrew Rivkin: ... they're getting a response back immediately. So I think that we've done a very good job of improving to the ability to distribute that technology across the world.

Sudhir Khanna: And is this Version 4.0 going to be ready to be distributed wirelessly as well? How long will that be?

Andrew Rivkin: We have certainly in our e-commerce subsidiary developed applications for wireless. Not with the release of Version 4.0, but we will have in 2000 wireless products for our Internet gaming as well.

Sudhir Khanna: And would that mean that you would have to scale down significantly the...

Andrew Rivkin: Well, it's a different environment.

Sudhir Khanna: That's right.

Andrew Rivkin: I mean you're not distributing... it's not client server, it's not hybrid client server.

Sudhir Khanna: Correct.

Andrew Rivkin: It's a completely different protocol.

Sudhir Khanna: Okay. If you don't mind, one more question. I think you mentioned near the beginning that you are looking at other potential revenue streams from the software. Now, were you referring to the new Version 4.0 gaming software or the e-cash software?

Andrew Rivkin: No, with Version 4 again we've got channels in Version 3 which allow users to plug in things that they enjoy. We've improved that and added channels in Version 4.0, so things like shopping and other types of user functionality has been put into Version 4.0 and there's potentially additional revenue streams in that area as well.

Sudhir Khanna: Okay. Can you expand a little bit on that?

Andrew Rivkin: Well, I mean shopping is a pretty good example of that. The end-users are able to buy stuff right within the Version 4.0 technology, so there's potential revenue that could be generated from that.

Sudhir Khanna: So while they're playing a game they're looking at ads from retailers and they can buy?

Andrew Rivkin: Yeah. Or they might be looking at actual products and they can buy. I mean with our relationship with Jupiters we'll be directing them to make hotel reservations, to make airline reservations, actually come to the physical properties. So there's many opportunities for cross-promotion and for generating revenue in that way as well.

Sudhir Khanna: Right. Okay. Who do you see as you major competitor moving forward two or three years from now and why?

Andrew Rivkin: Well, I mean it's pretty difficult to project what's gong to happen in particular with this industry two, three years in the future. I mean obviously there are a number of major international brands getting into the Internet gaming industry right now. We're hoping to work with the majority of those groups. So we don't really perceive those to be our competitors today. I don't know what's going to happen in the United States. I mean Nevada for the first time is actually taking a look at Internet gaming. They're trying to understand Internet gaming. My general feeling is that's probably a good thing and not a bad thing.

Sudhir Khanna: Right.

Andrew Rivkin: So there may come a time when we're talking about companies like MGM who will be getting into the Internet gaming industry. Again, as I said, with our business model we're hoping that they'll be potential licensees as opposed to competitors. We want to be the largest supplier to the Internet gaming industry. We are today and we'd like to continue that leadership long into the future.

Sudhir Khanna: How many licensees do you have right now?

Andrew Rivkin: There's about 16 licensees today.

Sudhir Khanna: Okay.

Andrew Rivkin: Seventeen (17), sorry.

Sudhir Khanna: Seventeen (17). And unless they're the top three what percentage of your revenue are they bringing in?

Andrew Rivkin: That's something that we perhaps could address at the conference call at the end of April. I don't have that information in front of me. Things have obviously changed...

Sudhir Khanna: Right.

Andrew Rivkin: ...with the growth of William Hill throughout the first quarter so I just wouldn't want to get ahead of myself there.

Sudhir Khanna: Okay. But basically the agreements in place are strong enough, your top revenues can't just... the agreements cannot be just broken away?

Andrew Rivkin: Absolutely not. Thanks very much for your questions.

Operator: Thank you. And the following question comes from Markus Matuschka of NGM. Please go ahead.

Markus Matuschka: Yeah, hello. So I have two questions. One is about your product again. So this 4.0 version, is it going to improve the 3D animation, and especially I think one of the products people like, slot machines, are there going to be some more improvements?

Andrew Rivkin: There's a brand new slot engine. I think that the new slot machines in Version 4.0 are terrific. We've emulated the U.S. slot machines, we've got the Australian slot machines working in Version 4. It's a much more international offering from the slots perspective, so you're going to find... no matter what country you're from, you're going to have slots that you're accustomed to playing.

Further, we've added bonus games to the slot machines. I think that the product offering in that area is much better. From the perspective of graphics I think, with the addition of dealer and player avatars, we've got a live 3D environment. Obviously in Version 3.0, but in Version 4 we have allowed the ability for people to move around within that environment. So I think it's just a much more realistic environment in Version 4.0 than what we've got out there today. We're actually very excited about that as well.

Markus Matuschka: Yeah. So let me ask you a comment on the Kyl Bill. So I'm from Europe and I can't see the real threat of this Kyl Bill because your company obviously in its strategy in the Internet itself is international, it's not national, and you focus also on Asia, Australia and Europe. And so, for example, your competitors are in Europe, they are real high players on the stock markets, so people down here have no problem with Internet gaming at all?

Andrew Rivkin: You're probably right about that. I mean the European investor certainly has a different feeling towards the Kyl Bill than perhaps the North American or particularly the U.S. investor. I mean it hits much closer to home in the U.S. than it does in Europe and it is a global industry. We do have end-users in 240 countries around the world. We have licensees who are operating and marketing around the world as well. So I think a number of those comments you made are correct.

Markus Matuschka: Yeah. I see maybe in the U.S. they are very much focused on themselves, but they don't really understand who William Hill is in Europe and I think if you continue your cash rich, and it looks like your new version is going to be real excellent, so if you continue your strategy and expansion to non-U.S. I think you're going to be pretty much independent then.

Andrew Rivkin: Absolutely. The revenue dependence on the U.S. has continued to decrease since we've started. I think that the multiples that are being achieved in Europe as a result of the European investor not being as concerned by the Kyl Bill are very good. And as a result, the Board is continuing to look at other capital markets outside of North America as well. So maybe we'll see some movement on that in the next year or so as well.

Markus Matuschka: Right. Thank you.

Andrew Rivkin: Thanks very much.

Operator: Thank you. And our next question comes from Donald Jonston, private investor. Please go ahead.

Donald Jonston: Recently you announced that you had licensed International Thunderbird, Brazil. Will those revenues come in in the second quarter?

Andrew Rivkin: Their strategy, which is a very interesting one... we're actually very excited about that. They will be working in Spanish and Portuguese. The software we're hoping to have to International Thunderbird in the very near future, at least in Spanish. They're going to be delivering that software to major branded groups in the Latin American market, so it will take some time before they are able to create those relationships. They're looking at major media companies in Latin America and other important strategic partners in that part of the world. So I think there will be a period of time where those relationships are being put in place, where that particular software may not be important from a revenue perspective. But I think that in terms of our goal of dealing with major branded groups, International Thunderbird will be able to help us significantly in dealing with those types of groups in the Latin American marketplace. They already have with their core business a number of very important relationships in that part of the world.

Donald Jonston: Thank you, and thank you for answering all the questions. You've done very well.

Andrew Rivkin: Thank you.

Operator: Thank you. And at this time, Mr. Rivkin, we have no further questions registered, so I would like to turn the meeting back over to you.

Andrew Rivkin: Terrific. Thanks very much. Thanks, everybody, for joining us again. As I mentioned before, we will be having a first-quarter, our normal first-quarter analyst conference call I believe will be April the 28th but we'll be releasing information along with our full results prior to that. So hopefully everybody will join us again. Thanks again.

End of the Conference Call