WPT Enterprises reports Q2 results

8 August 2007

LOS ANGELES -- (PRESS RELEASE) -- WPT Enterprises, Inc. (NASDAQ:WPTE) today announced financial results for the second quarter ended July 1, 2007. Business highlights for the quarter include the delivery of nine episodes of Season V of the World Poker Tour® (WPT) television series, a broadcast-rights agreement with GSN for Season VI of the WPT, a partnership with Grup Peralada, the largest operator of casinos in Spain, television distribution agreements for Season IV and Season V of the WPT in the Netherlands and Australia, which both are included as part of the PartyGaming sponsorship agreement, and the re-launch of the Company's online gaming site. Subsequent to the end of the quarter, the Company signed a five-year agreement with the China Leisure Sports Administrative Center, the government sanctioned body that oversees poker and other leisure sports throughout China, to become the exclusive marketing and sponsorship partner for China's popular card game, Traktor Poker, known as Tuo La Ji. The World Poker Tour will be identified with one of the most popular activities in China, build significant brand awareness throughout the country and derive potential future revenues from sponsorship, television and certain online opportunities.

Financial Results. For the second quarter of 2007, total revenues were $7.7 million, compared to $11.0 million in the same period in 2006. The decrease was primarily a result of the delivery of fewer domestic television episodes in the 2007 period. The Company reported a net loss for the quarter of $3.3 million, or $0.16 per share. Included in the net loss is a $2.3 million write-off of online gaming assets, which resulted from ceasing the internal development of the Company's previously planned stand-alone online gaming platform. Excluding the effect of the write-off, the net loss for the second quarter of 2007 was $1.1 million, or $0.05 per share. This compares to net earnings of $2.6 million, or $0.12 per share, in the comparative 2006 period. (See the reconciliation of financial information presented in accordance with Generally Accepted Accounting Principles (GAAP) to non-GAAP financial information in the tables section of this press release, which financial information excludes the one time write-off of online gaming assets).

Domestic television license fee revenues were $4.3 million in the second quarter of 2007, a decrease from $7.3 million in the second quarter of 2006. The decrease was primarily a result of the delivery of nine episodes of the Professional Poker Tour® (PPT) television series in the second quarter of 2006 versus the delivery of no episodes of the PPT in the 2007 period and the delivery of nine episodes of Season V of the WPT television series in the second quarter of 2007 versus the delivery of ten episodes of Season IV of the WPT in the 2006 period. Online gaming revenues were $0.3 million in the second quarter of 2007, compared to $0.8 million in the prior year period. The decrease in online gaming revenue was primarily due to the lower levels of player activity versus the prior year, as well as the Company ceasing operations on the WagerWorks network in June while transitioning its online gaming operations to CryptoLogic. Product licensing revenues increased to $1.0 million in the second quarter of 2007, compared to $0.8 million in the second quarter of 2006. The increase was due primarily to higher interactive gaming revenues from Take Two.

In the second quarter of 2007, cost of revenues declined to $3.1 million from $4.2 million in the second quarter of 2006. The decrease was primarily a result of lower domestic television production costs as the Company delivered fewer episodes during the second quarter of 2007, compared to the 2006 period, as previously described. Overall gross margins were 60% in the second quarter of 2007, compared to 62% in the second quarter of 2006. In the second quarter of 2007, domestic television licensing margins were 40% compared to 51% in the same period in 2006. The decrease was primarily because of the delivery of nine episodes of the PPT television series in 2006 for which the production costs had been expensed in an earlier period. The lower domestic television margins in the 2007 period were largely offset by increased margin contribution from product licensing, international television and sponsorship.

In the second quarter of 2007, selling, general and administrative expense increased to $6.0 million from $4.4 million in the second quarter of 2006. The increase was primarily due to the Company's efforts to develop its own online gaming software and support prior to entering into an agreement with CryptoLogic in late April 2007.

At July 1, 2007, the Company had no debt, and total cash, cash equivalents and investments in marketable securities of approximately $34.6 million.

2007 Outlook

For the third quarter of 2007, revenues are expected to be in the range of $4.0- $4.5 million. Regarding the outlook for 2007, the Company expects:

* To deliver the remaining three episodes of Season V of the WPT television series to the Travel Channel during the third quarter of 2007.

* To deliver five episodes of Season VI of the WPT television series to GSN in the fourth quarter of 2007.

* To recognize host fee and sponsorship revenues, including PartyGaming related revenues, as WPT episodes are aired during the third quarter of 2007.

* To increase sales and marketing efforts for online gaming beginning in September.

"We set out several initiatives for 2007 and are pleased to report that we've made significant progress on each," said Steve Lipscomb, President and CEO of WPT Enterprises. "At the beginning of the second quarter, we announced a multi-year deal with GSN 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."