WPT China signing this week

[jetset]

WPT CHINA SIGN-UP IMMINENT

Poker wins despite anti gambling bureaucracy

Judging by reports in the Asian media and through the Associated Press news network, tournament poker is coming to China despite gambling being officially frowned upon in the country.

The reports reveal that World Poker Tour Enterprises is about to sign an agreement this week with the China Leisure Sports Administrative Centre.

The partnership will "promote the sport of poker, by helping to create, expand and commercialise China's first ever national poker competition," World Poker Tour Enterprises spokesmen revealed.

The partnership agreement will run for five years, with an option to extend, the reports say. Additional details weren't given and it wasn't clear what stakes participants would play for.

China represents a different challenge to the well established and television fuelled poker boom in the West because the Communist government officially forbids gambling, categorising it as a form of criminal, anti-social behaviour along the lines of prostitution and drug use. It is not yet known how WPT managed to square this official policy with the new deal.

Former lawyer Steve Lipscomb, WPT's founder, president and CEO, was due to attend the signing ceremony at a Beijing hotel on Monday.

 

[jetset]

Update

CHINA WPT DEAL CONFIRMED

$3 million investment for first crack at 'traktor' tournaments

Earlier reports that the World Poker Tour has clinched a poker sponsorship deal with Chinese authorities (see previous InfoPowa report) have been confirmed.

World Poker Tour Enterprises head man Steve Lipscomb signed the accord, which involves a five-year sponsorship and marketing deal with CLSA to help promote a Chinese 'national traktor tour'.

Traktor, or tuo la ji, is a popular Chinese card game that has similarities to bridge, and the WPT, in exchange for a $3 million investment, will get first right of negotiation and right to match any deal involving poker in China.

It's something of a gamble, because the legality of poker in the country remains in question, but the market potential of mainland China and its potential players is significant if this key issue can be resolved, making the WPT deal an important foot in the door.

Lipscomb will have been less pleased with the financial results his company reported this week. The WPT second-quarter earnings, showed a net loss of $3.3 million for the quarter or a loss of $0.16 per share. For the same period last year, WPTE posted a $2.6 million profit or a gain of $0.12 per share.

The second quarter loss includes a $2.3 million write-off of gaming assets associated with WPTE's now-abandoned plan to develop its own in-house online gaming platform. Excluding the write-off, WPTE's net loss was $1.1 million or a loss of $0.05 per share.

Total revenues at $7.7 million came in slightly better than predicted, but represent a 30 percent decline when compared to the same period a year ago, primarily attributable to the absence of domestic television license fees associated with the Professional Poker Tour (PPT).

Expenses were higher in this quarter, too - again due to the abortive software development venture. Selling, general and administrative expenses increased to $6.0 million - up from the $4.4 million spent in the second quarter of 2006.

Third quarter predictions are for more of the same in the third quarter, with projections of revenues in the $4.0-$4.5 million range - below that of the independent analysts who were looking at around a million better. Third quarter expenses are likely to remain on the high side as the company increases sales and marketing efforts in support of online gaming beginning in September.

On the positive side, WPT is debt-free and ended the second quarter with a cash and investment position of approximately $34.6 million. While company officials were reluctant to offer up any traffic statistics or projections for their newly re-launched online gaming site and the company's future growth engine, their goal is to capture a 3-5 percent share of the global online gaming market within 18-24 months.

WPTE President and CEO Steve Lipscomb commented: "We set out several initiatives for 2007 and are pleased to report that we've made significant progress on each. At the beginning of the second quarter, we announced a multi-year deal with GSN (Game Show Network) setting the stage for the broadcast and promotion of Season VI of the World Poker Tour television series.

"In June, we successfully re-launched our online gaming site on the CryptoLogic platform. We continue to build on our brand and business internationally as well, and to that end, we signed television distribution deals in the Netherlands and Australia, which fall under our PartyGaming sponsorship agreement, and just this week, we announced our entry into China. With this positive momentum and our world-class brand, we are enthusiastic about the prospects for 2007 and beyond."