CryptoLogic Purchases 1 Million Shares At CDN$28.00 Per Share.

Business Editors

TORONTO--(BUSINESS WIRE)--Jan. 14, 2002

Company's Buy Back Strategies Have Created Enhanced Value for

Shareholders

CryptoLogic Inc. (NASDAQ:CRYP)(TSE:CRY.) announced today the results of the company's substantial issuer bid to buy back up to 1 million common shares.

The offer expired at 11:59 p.m., Toronto time, on January 11, 2002. CryptoLogic confirmed that it will take up and pay for 1 million shares tendered in accordance to the bid at a price of Cdn$28.00 per share. An aggregate purchase price to be paid by CryptoLogic is approximately Cdn$28.0 million (US$17.5 million).

"We are pleased that CryptoLogic has been successful in buying back one million shares," said Jean Noelting, CryptoLogic's president and CEO. "CryptoLogic's buy back strategies have helped to create value for shareholders and add positively to earnings per share. Given that we currently trade at about 11x this year's forecasted fully diluted earnings, our shares remain excellent value. We will continue to take advantage of our regular buy back program, which makes good use of our strong cash reserves. Prospects for 2002 are exciting given growth initiatives soon to be realized. CryptoLogic will continue to focus on delivering some of the strongest margins and earnings on the street."

Equity Transfer Services Inc., depository for the offer, reported that 1,691,634 shares were tendered into the bid. Due to over-subscription, shareholders who tendered their common shares will have approximately 60% of their shares repurchased on a pro-rata basis. Payment for shares properly deposited will be made by Equity Transfer within 10 days.

In order to avoid the creation of "Odd Lots" as a result of proration, CryptoLogic will take up one million shares plus purchase additional shares from each shareholder that properly tendered so that the number of shares returned to a shareholder will be a whole multiple of 100, or if proration would result in less than 100 shares being returned, all such shares less than 100 in number will be purchased by CryptoLogic, as detailed in the offer dated November 12, 2001. With the exception of the approximately 3,600 shares tendered prior to the original expiry date of December 21, 2001, which are not subject to proration.

The shares repurchased equal approximately 8% of CryptoLogic's outstanding shares. After giving effect to the repurchase, there will remain approximately 12.1 million shares.

CryptoLogic's normal course issuer bid is being reinstated effective immediately, which authorizes the company to repurchase up to 656,000 common shares and expires on May 17, 2002. In this current plan up to November 12, 2001, the company has repurchased 275,000 shares or almost 42% of the authorized amount.

About CryptoLogic

CryptoLogic Inc. is the leading software development company serving the Internet gaming market. The company's proprietary technologies enable secure, high-speed financial transactions over the Internet. CryptoLogic continues to innovate and develop state of the art Internet software applications for both the electronic commerce and Internet gaming industries. For information on CryptoLogic and WagerLogic, the licensing subsidiary of CryptoLogic, please visit www.cryptologic.com and www.wagerlogic.com.

CRYPTOLOGIC FORWARD LOOKING STATEMENT DISCLAIMER:

Statements in this press release which are not historical are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including without limitation risks associated with the Company's financial condition and prospects, legal risks associated with Internet gaming and risks of governmental legislation and regulation, risks associated with market acceptance and technological changes, risks associated with dependence on licensees and key licensees, risks relating to international operations, risks associated with competition and other risks detailed in the Company's filings with securities regulatory authorities. These risks may cause results to differ materially from those projected in the forward-looking statements.