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                                                                     EXHIBIT 4.1

                                CRYPTOLOGIC INC.

                       INCENTIVE STOCK OPTION PLAN (2002)

1.       PURPOSE:  The purpose of this Incentive Stock Option Plan (2002) (the
"2002 Plan") is to replace the Amended 1996 Plan and to provide effective
incentives to Directors, Officers, employees and consultants of the Corporation
(and its subsidiaries, which includes partnerships and other entities that are
controlled by the Corporation) and to reward such employees in relation to the
long-term performance and growth of the Corporation and the total return to
Shareholders. No financial assistance will be provided by the Corporation to
option holders in connection with the exercise of stock options granted under
the 2002 Plan.

2.       ADMINISTRATION:  The 2002 Plan shall be administered by the Directors
of the Company. The Directors shall not by virtue of such appointment be
disentitled or ineligible to receive options. The Directors shall have full
authority to interpret the 2002 Plan and to make such rules and regulations and
establish such procedures as it deemed appropriate for the administration of the
2002 Plan, taking into consideration the recommendations of management, and the
decision of the Directors shall be binding and conclusive. The decision of the
Directors shall be binding, provided that notwithstanding anything herein
contained, the Directors may from time to time delegate the authority vested in
it under this clause to the full board, which shall thereupon exercise all of
the powers herein given to the Directors, and further provided that a decision
of the majority of persons compromising the board in respect of any matter
hereunder shall be binding and conclusive for all purposes and upon all persons.

3.       NUMBER OF SHARES:  The total number of shares which are reserved and
set aside for issue to directors, officers and key employees under this 2002
Plan shall not exceed 3,000,000 or such other number as may be approved by the
shareholders at a meeting duly called for such purpose, and no one person may
receive or hold options entitling the purchase of in excess of 5% of the number
of outstanding shares of the Company. The number of CryptoLogic Inc. shares
reserved for issuance under the 2002 Plan includes any CryptoLogic Shares that
may be issued as a result of the exercise of options granted under the Amended
1996 Plan. All common shares issued pursuant to exercise of options granted or
deemed to be granted under the 2002 Plan will be so issued as fully paid common
shares.

4.       PARTICIPATION:  Options shall be granted under the 2002 Plan only to
directors, officers, other key employees or service providers, being persons
providing ongoing management or consulting services under written contract,
(Participant), or their holding companies the shares of which are held directly
or indirectly by the Participant or their spouse, minor children or minor
grandchildren, or a registered retirement saving plan of which the Participant
is the beneficiary, as shall be designated from time to time by the Directors
and shall be subject to the approval of such regulatory authorities as the
Directors shall designate, which shall also determine the number of shares
subject to such option.

5.       TERMS AND CONDITIONS OF OPTIONS:  The terms and conditions of each
option granted under the 2002 Plan shall be set forth in written option
agreements between the Company and the Optionee. Such terms and conditions shall
include the following as well as such provisions, not inconsistent with the
Plan, as may be deemed advisable by the Directors.

         (a)      Number of Shares:  The number of shares subject to the option.

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         (b)      Option Price:  The option price of any shares in respect of
                  which an option may be granted under the 2002 Plan shall be
                  such price as shall be fixed by the Directors but shall be not
                  less than the fair market value of the shares. The fair market
                  value shall be deemed by the Directors as either the average
                  between the highest and lowest prices at which the Company's
                  common shares are traded on the day of option is granted, or
                  the closing price of the stock on the day of grant. In its
                  resolution allocating any option, the Directors may determine
                  that the date of grant aforesaid shall be a future date
                  determined in the manner specified by such resolution. The
                  Directors may also determine that the option price per share
                  may escalate at a specified rate dependent upon the year in
                  which any option to purchase common shares may be exercised by
                  the Optionee.

         (c)      Payment:  The full purchase price of shares purchased under
                  the option shall be paid in cash upon the exercise thereof. A
                  holder of an option shall have none of the rights of a
                  stockholder until the shares are issued to him.

         (d)      Term of Option:  Options may be granted under this 2002 Plan
                  exercisable over a period not exceeding five (5) years. Each
                  option shall be subject to earlier termination as provided in
                  paragraph (f) of this paragraph 5. An option will only become
                  exercisable after the following vesting periods:

                  a)       One-third of the options granted to Directors will
                           vest at the date of grant, with the balance vesting
                           over 2 years.

                  b)       All other options granted will vest at a rate of
                           one-quarter of the total amount granted per year, the
                           first vesting date to follow one year after the date
                           of grant. Vesting dates will follow annually on the
                           anniversary date of the original grant.

         (e)      Exercise of Option:  An option may be exercised in part or in
                  its entirety up to and including the time of its expiry.
                  Provided however that except as expressly otherwise provided
                  herein, no option may be exercised unless that Optionee is
                  then a director, officer or employee of the Company. This 2002
                  Plan shall not confer upon the Optionee any right with respect
                  to continuation of employment by the Company.

         (f)      Termination of Options:  Any option granted pursuant hereto,
                  to the extent no validly exercised, will terminate on the
                  earlier of the following dates:

                  (i)      the date of expiration specified in the option
                           agreement, being not more than five (5) years after
                           the date the option was granted;

                  (ii)     the date of termination of the Optionee's, employment
                           for any cause other than by retirement, permanent
                           disability or death or 30 days after the date of
                           termination of the Optionee's position as a director
                           or officer or ongoing service provider;

                  (iii)    six (6) months after the date of the Optionee's death
                           during which period the option may be exercised only
                           by the Optionee's legal representative or the person
                           or persons to whom the deceased Optionee's rights
                           under the option shall pass by will or the applicable
                           laws of descent and distribution, and only to the
                           extent the Optionee would have been entitled to
                           exercise it at the time of his death if the
                           employment of the Optionee had been terminated by the
                           Company on such date;

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                  (iv)     three (3) months after termination of the Optionee's
                           employment by permanent disability or retirement
                           under any Retirement Plan of the Company during which
                           three (3) months period the Optionee may exercise the
                           option to the extent he was entitled to exercise it
                           at the time of such termination provided that if the
                           Optionee shall die within such three (3) month
                           period, then such right shall be extended to six (6)
                           months following the death of the Optionee and shall
                           be exercisable only by the persons described in
                           paragraph (f) (iii) hereof and only to the extent
                           therein set forth.

         (g)      Non-transferability and non-assignability of Stock Option:  No
                  option shall be transferable or assignable by the Optionee or
                  his legal personal representatives other than by will or the
                  laws of descent and distribution and shall be exercisable
                  during his lifetime only by him.

         (h)      Applicable Laws or Regulations:  The Company's obligation to
                  sell and deliver stock under each option is subject to such
                  compliance by the Company and any Optionee as the Company
                  deems necessary or advisable with all laws, rules and
                  regulations of Canada and any Provinces thereof applying to
                  the authorization, issuance, listing or sale or securities and
                  is also subject to the acceptance for listing of the common
                  shares which may be issued in exercise thereof by each stock
                  exchange which shares of the Company are listed for trading.

6.       ADJUSTMENT IN EVENT OF CHANGE IN STOCK:  Each option shall contain
uniform provisions in such form as may be approved by the Directors to
appropriately adjust the number and kind of shares covered by the option and the
exercise price of shares subject to the option in the event of a stock split,
stock dividend, combination of shares, merger, or other relevant change in the
Company's capitalization to prevent substantial dilution or enlargement of the
rights granted to the Optionee by such option.

7.       AMENDMENT AND DISCONTINUANCE OF PLAN:  The board may from time to time
amend or revise the terms of the 2002 Plan or may discontinue the 2002 Plan at
any time provided however that no such right may, without the consent of the
Optionee, in any manner adversely affect his rights under any option theretofore
granted under the 2002 Plan and such amendment shall require the prior approval
of the Toronto Stock Exchange.

8.       EFFECTIVE DATE AND DURATION OF PLAN:  The 2002 Plan shall remain in
full force and effect until such time as the Directors shall have granted
options on all of the shares reserved and set aside under paragraph 3 hereof,
and for so long thereafter as options remain outstanding in favour of any
Optionee.