World Poker Tour Enterprises, the owner of the eponymous landmark poker tour since its inception seven years ago, announced on Friday that they will be terminating their relationship with Cryptologic, who had run their online poker room for slightly over a year.
WPTE filed a notice with the Securities and Exchange Commission on October 17th where details of the end of the relationship were offered. In the notice, WPTE announced that they had informed Cryptologic Incorporated and WagerLogic Limited – with whom WPTE had been working for just over a year – that they were terminating their contract and that the room would temporarily shut down on or around November 14th. At this time, WPTE is retaining rights to come back online at a future date but those options have yet to be fully detailed out.
The contract termination will cost WPTE a significant sum of money. The three year contract signed with Cryptologic in 2007 for operation of the poker room was for $750,000 with WPTE picking up any costs not covered by the room’s operation, according to previous SEC filings. Add into the equation the remainder of the contract, which will have to be picked up as well by WPTE, and the total costs for closing the room will potentially be around $2 million, if not significantly higher.
Sources at the WPT were not at liberty to confirm if the site will reopen in another network or independently.
The actual site that the WPTE was using for its online poker operation, WPTonline.com, seemed to have problems from the start. After spending several months trying to develop their own software and program in 2006, WPTE decided to abandon that effort and signed on with Cryptologic. Further adding into the difficulties for the site was the fact that it could not accept American players, as the gray area that is online gaming in the United States could have put WPTE in tremendous jeopardy if American action was accepted.
2008 overall hasn’t been kind to WPTE or any of its operations. Since last year, many of the tournaments on the schedule have seen declines in their numbers and the current seventh season of the WPT has actually seen a reduction in the number of tournaments for the first time in its history. This year has also seen WPTE move its tournament broadcasts for the third time, after its long relationship with the Travel Channel and its year long dalliance with GSN, formerly the Game Show Network. The current season, the WPT’s seventh, will be seen on Fox Sports Network in what appears to be a “time buy” situation.
WPTE’s stock has taken a tumble as well. Since it reached its apex at over $27 a share following the rumored buyout by a consortium headed by Doyle Brunson in 2005, the stock has fallen tremendously. Two months ago, NASDAQ sent a delisting notification to WPTE after its shares fell below a dollar and gave then 180 days to return above that $1 level for a ten consecutive day period. As of this writing, WPTE’s stock has continued to drop and sits at $0.46.
WPTE currently has no debts, and its assets total over $11 million, but the organization has only ever had one money making quarter. In that quarter, WPTE turned a profit due to the sale of stock in the electronic poker table company PokerTek in early 2006.
The move by WPTE seems to have no effect on the continuation of its other online poker site, Club WPT. This site, which is membership based and is accessible to American players as well as the world, looks to be the linchpin that WPTE will move on with in the online poker world, as it also is the basis of its latest broadcast efforts on the Fox Sports Network.
WPTE still has their popular Club WPT site as well as their current television deal with Fox Sports Network to stay viable in the poker world. With the temporary shutdown of wptonline.com, however, things could take a turn for the worse. Overall, it would be unfortunate to lose any part of the organization that has been a part of the resurgence of poker in the 21st century.
