Amaya Announces an Update on Timing of a Possible Offer for CryptoLogic Limited and Increase of its Previously Announced Special Warrant Offering to C$25 million

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This announcement is not an announcement of a firm intention to make an offer under Rule 2.7 of the City Code on Takeovers and Mergers (the "Code") and there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made. Unless otherwise stated, all defined terms shall be as per the Company's announcement of 15 December 2011.

MONTREAL, Jan. 11, 2012 /CNW/ - Amaya Gaming Group Inc. ("Amaya" or the "Company") (TSXV: AYA), an entertainment solutions provider for the regulated gaming industry, today announced that an extension will be sought to the previously announced deadline by which it must, in accordance with the Code, either announce a firm intention to make an offer for CryptoLogic Limited ("CryptoLogic") or announce that it does not intend to do so. Amaya also announced that it has increased the size of its previously announced bought deal private placement of special warrants ("Special Warrants") from C$20,000,000 to C$25,000,000 (the "Base Offering"). Each Special Warrant will be issued at a price of C$1,000.

Update on Timing of a Possible Offer

On 15 December 2011, Amaya announced (the "Announcement") that it had agreed in principle with CryptoLogic the outline terms of a possible recommended all cash offer for all the outstanding share capital of CryptoLogic (the "CryptoLogic Shares") that Amaya does not already own (the "Possible Offer") priced at US$2.50 per share and valuing CryptoLogic at approximately US$34,500,000. The Possible Offer is subject to the satisfaction (or waiver by Amaya) of certain pre-conditions including, inter alia, the satisfactory completion of confirmatory due diligence by Amaya, unanimous recommendation by the board of directors of CryptoLogic and confirmation by Amaya that it has sufficient funds to complete an offer.

The Announcement also stated that, in accordance with Rule 2.6(a) of the Code, Amaya must, by not later than 5.00 p.m. London time (12.00 noon Toronto time) on 12 January 2012, either announce a firm intention to make an offer for CryptoLogic in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended upon the request of CryptoLogic and with the consent of the Panel in accordance with Rule 2.6(c) of the Code.

Since the date of the Announcement, Amaya and CryptoLogic have progressed discussions and Amaya has now completed its initial phase of due diligence. Following confirmation from Amaya that it has now completed its initial phase of due diligence, and in order to allow for the finalisation of Amaya's due diligence investigations and financing arrangements over the next three weeks, CryptoLogic has committed to seek, in accordance with Rule 2.6(c) of the Code, an extension to the offer period from the Panel such that the latest an announcement of a firm offer under Rule 2.7 of the Code could be released would be no later than 5:00pm on Thursday 2 February 2012.

Pursuant to Rule 2.5(a) of the Code, Amaya reserves the right to vary the form and/or mix of the consideration and, with the recommendation or consent of the Board of CryptoLogic, to make an offer for CrytoLogic at a price lower than US$2.50 per common share. Amaya also reserves the right to structure any acquisition of CryptoLogic or any of the assets of CryptoLogic in any form whether by scheme of arrangement, takeover offer or otherwise.

Increase of Special Warrant Offering

As a result of the increase in the Base Offering, the over allotment option granted by the Company to Canaccord Genuity Corp. has increased from up to 3,000 Special Warrants to up to 3,750 Special Warrants, exercisable in whole or in part up to 30 days from and including the closing date of the Base Offering (together with the Base Offering, the "Offering").

The Offering is now expected to close on or about January 17, 2012 and is subject to certain customary conditions and the receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange Inc.

All other terms and conditions of the Offering are as previously announced on December 15, 2011, as outlined below.

The net proceeds of the Offering will be used to fund a portion of the Possible Offer priced at US$2.50 per share and valuing CryptoLogic at approximately US$34,500,000.

Each Special Warrant shall entitle the holder thereof to receive, without payment of additional consideration, one Unit, which is comprised of: (i) one convertible debenture ("Convertible Debenture"); and (ii) 50 warrants, (each a "Warrant"). Each Special Warrant shall be deemed exercised at the earlier of:

(i)	in the event the Release Event (as defined below) has occurred, three business days following the date (the "Qualification Date") that a final receipt is obtained for the filing of a final short form prospectus (the "Qualification Prospectus") pursuant to National Instrument 44-101 qualifying for distribution the Convertible Debentures and the Warrants underlying the Special Warrants; and
(ii)	in the event the Release Event has occurred, 4:59 p.m. (Toronto time) on the date that is four (4) months and one (1) day following the closing date of the Base Offering (the "Qualification Deadline")

The Company shall file a Qualification Prospectus within 80 days following the closing date. In the event that the Qualification Date has not occurred on or before March 31, 2012, each Special Warrant shall thereafter entitle the holder to receive upon deemed exercise, for no additional consideration, 1.1 Convertible Debentures (an additional 0.1 of a Convertible Debenture) and 55 Warrants (an additional 5 Warrants).

If the Release Event occurs following the Qualification Date, the deemed exercise shall occur three business days following the Release Event. For greater certainty, the Special Warrants shall not be deemed exercised prior to the Release Event occurring, regardless of whether the Units underlying the Special Warrants have become qualified under the Qualification Prospectus or have become free trading as a result of the statutory hold period of four months and one day expiring.

The Convertible Debentures will bear interest at a rate of 10.50% per annum payable semi-annually in arrears on April 30 and October 31 in each year commencing October 31, 2012. The first payment will include accrued interest from and including the date of the Release Event to but excluding October 31, 2012. Interest payments will be satisfied through cash payment. The Convertible Debentures will be convertible at the option of the holder into common shares of the Company at a conversion price of $3.25 per common share (being a conversion rate of approximately 308 common shares per $1,000 principal amount of Convertible Debentures) and will have a maturity date of April 30, 2014.

Each Warrant entitles the holder thereof to acquire one common share of the Company at a price per common share equal to $3.00 at any time up to a period ending April 30, 2015.

The gross proceeds from the sale of Special Warrants less an amount equal to 50% of the Cash Commission and the Underwriter's expenses (the "Offering Proceeds") will be deposited into escrow with the agent (the "Escrow Agent") appointed in respect of the Special Warrants under an agreement between the Company, the Underwriter, and the Escrow Agent and will be invested in short-term obligations of, or guaranteed by, the Government of Canada (and other approved investments), until the satisfaction of the Release Conditions or the Release Deadline.

The Offering Proceeds and any interest thereon (the "Escrowed Proceeds") will be released from escrow upon the Release Event. Upon the occurrence of the Release Event, the Escrow Agent will deliver an amount (i) representing the remaining 50% of the Cash Commission, and interest earned thereon, to the Underwriter, and (ii) the balance of the Escrowed Proceeds to the Company.

"Release Event" means the satisfaction of the Release Conditions prior to the Release Deadline.

"Release Deadline" means 5:00 p.m. (Toronto time) on April 30, 2012.

The "Release Conditions" means (i) the satisfaction or waiver of all conditions to the completion of the Possible Offer by the Company, on terms previously disclosed to or otherwise reasonably acceptable to Canaccord Genuity; and (ii) the Company together with Canaccord Genuity shall have delivered to the Escrow Agent a joint notice confirming that (i) and (ii) have been satisfied. As a condition precedent to the execution of the joint notice contemplated in (ii) above by Canaccord Genuity, the Chief Executive Officer of the Company shall have delivered to Canaccord Genuity a certification that (i) has been satisfied.

In the event that the Release Event does not occur on or before the Release Deadline, the Company shall forthwith deliver a notice to each of the Special Warrant holders and the Escrow Agent and the Escrow Agent shall return, within three business days, to each such holder the Special Warrant funds plus a pro rata share of interest actually earned thereon, less applicable withholding taxes, if any, and the Special Warrants shall be cancelled. The Company shall be responsible for any short fall in the Escrowed Proceeds payable to Special Warrant holders.

About Amaya

Amaya is engaged in the design, development, manufacturing, distribution and sale of technology based gaming solutions for the regulated gaming industry worldwide. For more information please visit www.amayagaming.com.

Forward-looking Information

Certain statements included herein, including those that express management's expectations or estimates of our future performance constitute "forward-looking statements" within the meaning of applicable securities laws. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies, including: the Possible Offer is not binding and a formal offer may never be made by the Company for the shares of CryptoLogic, even if a formal offer is made for the issued share capital of CryptoLogic, there are no assurances that the conditions for acceptance or completion will be satisfied or waived by the Company. Investors are cautioned not to put undue reliance on forward looking statements. Except as required by law, Amaya does not intend, and undertakes no obligation, to update any forward-looking statements to reflect, in particular, new information or future events.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any paper offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any paper offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any paper offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a paper offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any paper offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any paper offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any paper offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a paper offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

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This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the Special Warrants in the United States. The Special Warrants and the securities underlying the Special Warrants have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.