Lakes Entertainment and WPT Enterprises are banking on the soaring
popularity of the game of poker, according to the New York Post this
week.
WPT, which produces the World
Poker Tour, filed for an initial public offering late last week.
The company is seeking to raise anywhere from $20 million to $28 million
in an offering underwritten by Feltl and Co., a Minneapolis-based
investment bank.
The company is majority-owned by Lakes Entertainment, a publicly-traded
yet speculative gaming company that develops, constructs and manages
casinos. Lakes Entertainment doesn't actually do any of that - yet.
Despite that their Indian gaming contracts have pushed the stock up
sixty percent this year, giving it a valuation of $255 million.
"Lakes Entertainment was kind of a middling, speculative
company," Roger Gros, editor of Global Gaming Business, "But
with this poker thing, they're taking it to the next level."
Lakes' sole source of revenue last year was the World Poker Tour.
Now the company, along with the new WPT Enterprises, has grand plans
to turn a television show into an icon.
"Our objective for the World Poker Tour is to establish
a premier brand that is similar to the brands created by popular professional
sports leagues, such as the NASCAR and the Professional Golfers Association,"
WPT Enterprises writes in its S-1 filing with the Securities and Exchange
Commission.
WPT Enterprises' fate rests partly in the hands of the Travel Channel,
which holds options for the show for the next five seasons. The second
season of the "World Poker Tour" TV show began airing last
month - and for now, at least, it appears that the bulk of WPT's revenue
stems from its TV presence.
According to the company's SEC filing, the Travel Channel will pay
the company approximately $8.2 million in license fees in 2004 for
the show's second season; another $600,000 will be derived from fees
that casinos pay WPT to be featured on the program.
Additional revenue could come through syndication, licensing opportunities
and sponsorships. WPT Enterprises has retained worldwide distribution
rights, and the company is also pursuing licensing opportunities for
the brand, including board games, casino games, video games, scratch-off
lottery tickets, books, apparel and poker accessories - with those
last two beginning production during the second quarter of 2004.
Though poker's popularity seems to be increasing every day, the WPT
Enterprises IPO is the first time that the game will test the public
markets.