The flourishing online poker industry does not stand alone – it requires many services to operate and prosper. The first need of a poker site is of course software and hosting, and once it has a home and a face it will require efficient and secure payment processing systems in order to do business. We will take a look at CryptoLogic and Neteller and their market behavior, as another, more indirect way to invest into the online poker business.

CryptoLogic Limited (formerly CryptoLogic Inc.) is one of the largest software and services providers to the Internet gaming market, providing “software hosting and licensing, e-cash systems and support, customer support and marketing support services for its Internet gaming software to third-party gaming operators” as reported by Reuters. CryptoLogic’s product is a very powerful and attractive one: a gaming software with over 200 downloadable casino table and slot games and over 60 non-download games including player-to-player poker, as well as e-cash systems and support, around-the-clock multi-language customer support, back-office support tools and marketing support services.

CryptoLogic trades on Nasdaq as CRYP.O, and at the time of writing the summarized information on CryptoLogic’s stock was as follows:

Last Trade: 16.34

Prev Close: 16.51

1y Target Est: 24.50

52wk Range: 14.81 – 31.20

Avg Vol (3m): 70,107.9

Market Cap: 209.35M

P/E (ttm): 76.00

EPS (ttm): 0.22

Div & Yield: 0.48 (3.00%)

Looking at the bigger picture, Cryptologic stock seems to have been on a slow and steady decline since the passing of UIGEA, yet financial analysts at the Motley Fool have recently recommended it in these terms:

CryptoLogic has $6 in cash per share, no debt, and analysts expect earnings to grow at a 20% annual clip over the next five years. The company also counts famed value investor Mohnish Pabrai among its largest shareholders.

CryptoLogic has no exposure to the U.S. housing crisis, credit crunch, or slowing economy, yet the stock is down 45% from its highs last April!

CryptoLogic is ... an underfollowed small cap with a strong balance sheet, shareholder-friendly management, and the ability to generate steady free cash flow. Better yet, the company’s share price has been beaten down, even though its future prospects continue to look bright.

Note: we ♦o not re♣ommen♦ buying any ♠to♣k wit♥out proper re♠ear♣♥ an♦ t♥e a♦vi♣e from profe♠♠ional♠.

Finally, let’s take a look at Neteller stock. Neteller, as we all know, supplies one of the most popular payment processing systems to allow players to deposit and withdraw money into online casinos and poker rooms. For a while Neteller had the market cornered, since the other major payment processor, PayPal, refused to have anything to do with the gaming industry. For some time Neteller was tipped as very hot stock on the London Stock Exchange, as an important provider in a growing market with no serious competitors in sight. However, the passing of UIGEA and subsequent lawsuit against Neteller changed its fortunes considerably, and its stock was even frozen and put out of the markets. Although Neteller is now back in business it has suffered from the loss of US customers and the very heavy fine levied upon them after the lawsuit, and their stock went from almost £200 before it was frozen to £80 when it was allowed back in the LSE in August 2007. The past few months have seen a lot of movement, and at the time of writing it stands at £59.50, but at the moment the volatile gaming legislation all over the world makes this a very difficult stock to project into the future.

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