CryptoLogic CEO Bryan Hadfield has stepped down after a poor second quarter revealed record losses for the online poker and casino software developers. Chairman David Gavagan will take over Hadfield's former position on an interim basis until a better replacement can be found.

CryptoLogic posted a record loss of $12.7 million in the second quarter of 2010 following a $3.2 million loss for the previous quarter. A drop in total revenue was mostly responsible for the loss, revenue plummeted more then $4.5 million from the same quarter last year. While branded game revenue did increase from $1.3 million to $1.5 million, poker and other revenues fell from $1.3 million to $700,000.

In addition to revenue losses, the company's operating, general and administrative, and amortization costs rose from $11 million in the first quarter of this year to more then $12.9 million.

The company blamed its decline on subdued wagering and the loss of William Hill Online. William Hill partnered with Playtech to form William Hill Online in 2008 and left the Cryptologic Poker network for the fast-growing iPoker Network. Last year, after poor results caused many other sites to flee to other networks the company decided to drop its poker network and leave its rooms in the hands of Boss Media.

Cryptologic had this to say following the news of its poor financial performance, "In the light of continuing difficult trading conditions, a further restructuring is being implemented to reduce significantly the cost base including a reduction in the total workforce by the end of Q4 2010. Following a review by a leading firm of industry consultants announced previously, a number of measures are being implemented to improve the performance of the hosted casino business."

As part of the new restructuring, CryptoLogic has hired Huw Spiers as its new Chief Financial Officer. Upon the announcement Spears said that he is optimistic about the companies future prospects, "I am delighted to join CryptoLogic, an exciting company with excellent long term prospects. It has a proven internet-based business model, a blue chip customer base and great products aimed at a global market destined for long term growth."

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