WPT Takes the Internet Poker Stage

The World Poker Tour is trying something that has yet to be achieved in the I-gaming industry.

WPT Enterprises Inc., the parent company behind the widely successful World Poker Tour television series, has launched an online poker room, but there's a catch: The site does not and will not take play from customers based in the United States, where the WPT brand is strongest.

U.S. players can access the site's news and free-play content, but can't play for real money or play in the paid-entry tournaments or games.

Companies with strong U.S. brands, including MGM Mirage, Harrah's Entertainment and Rank Group (operator of Hard Rock Café), have been unsuccessful in leveraging their brands on the Internet, mostly because their sites blocked U.S. play.

But those ventures ran their courses long before the online poker boom, and WPT is one of the biggest brands in the poker space.

The Site

WPTonline.com is based in Alderney and regulated by the country's Gambling Control Commission. The site, developed by WagerWorks through a software licensing deal signed in February 2005, features live multiplayer poker rooms with head-to-head and tournament play.

In addition to having a variety of multiplayer poker games, ring table games, "sit & go" and multi-table series tournaments, the site features a customized version of the WagerWorks poker software that includes a graphic package to match the WPT television experience.

The site additionally features the full suite of WagerWorks casino games, including traditional table and machine games as well as WagerWorks' themed slot machines: Monopoly, Baywatch, Wheel of Fortune and The Price Is Right.

Why Block US Play?

With most of its business interests in the United States, officials with the WPT felt they were in no position to offer real-money gambling services to U.S. customers.

The U.S. Department of Justice has long held firm that the 1961 Wire Act, which prohibits betting over the telephone in the U.S., applies to gambling over the Internet. Advocates for the industry argue that case law says otherwise, but at best there is a discrepancy in the law that creates a gray area for operators.

The Challenge

It is estimated that U.S. players represent more than 80 percent of the online poker market. Most successful online poker sites, therefore, either accept U.S. play or have strong brands in other parts of the world. If the WPT can build a strong online user base outside the United States, the site will no doubt become a case study for companies looking to broaden their global reach.

WPT President and CEO Steve Lipscomb is well aware of the challenge that lies ahead, but he's confident they can reverse the trend established by the likes of MGM Mirage and Harrah's.

"WPT aims to be the 'People's Choice' for poker," Lipscomb explained. "We want to give our WPTonline.com players every opportunity to participate in the entire WPT experience, which is why our online players will be afforded premier opportunities to enter WPT land-based tournaments as well as WPT Invitational events."

To build a loyal customer base, WPTonline.is offering innovative player incentives and premium online events. One such initiative is the site's Elite Members Club, which rewards frequent players with various perks.

A Frenzy of Poker Activity

The WPTonline.com launch is part of what's shaping up to be a huge summer for the online poker industry. PartyPoker.com, the world's largest online poker room, listed Monday on the London Stock Exchange with its value estimated at $9 billion.

The Party IPO was preceded by Empire Online's float in early June on the London Exchange's Alternative Investment Market. The company, which operates Empirepoker.com, raised $34 million through the offering.

There has also been much speculation that Gibraltar-based Cassava Enterprises, owner of PacificPoker.com, will go public in the second half of '05.

In addition to the stock market activity, rumors have abound that the World Series of Poker, another leading poker brand, will launch an online poker room in mid July to coincide with the main event of the 2005 tournament.

The WPT should fit nicely into the mix. It has grown from being the hottest rated series on Travel Channel in the United States to gain licensing rights and syndication deals in more than 100 countries.

Shares of the WPT rose nearly 3 percent to $20.87 on Tuesday, the day of the launch. The stock's value is up nearly 30 percent on the year.