Friday, March 11, 2005
Know when to hold, know when to fold
By NEIL WHITE
Columnist
There’s no question a poker craze has swept the nation. It’s impossible to surf through the TV channels without coming across a group of odd-looking people sitting around a table playing Texas Hold’em. Heck, there’s even an ESPN dramatic series called “Tilt” about a shady poker champ.
Low-stakes games also are springing up all over the place, with players ranging from high schoolers to old-timers. Actually, players don’t even need a regular game anymore. They can find one anytime by sitting in front of the computer and playing online.
These days, the jump from playing online in your underwear at home to being one of those odd-looking people sitting around a table on the Travel Channel isn’t as big as you might think.
Ask Flynn Bowie.
The Columbia resident — a business insurance salesman by day and poker hobbyist by night — will be flying to San Diego next week to participate in the Party Poker Million IV, a World Poker Tour event that takes place on a weeklong chartered Holland America cruise to Mexico.
The cost to play? Ten grand. That’s right, 10,000 big ones.
But Bowie, 38, isn’t plunking down his own bucks. By winning a pair of online tournaments last year, he earned the $2,600 cruise and the $10,000 seat at the Party Poker Million IV table.
(You know this is a big event because it’s designated with Super Bowl-like Roman numerals.)
Bowie will be playing against approximately 700 others in the tournament, a number of them actual poker professionals. They’ll be competing for a $7 million prize pool, with $1.5 million going to the winner and $1 million going to the runner-up. Finish in the Top 10 and a six-figure payoff is in the offing.
So how did Bowie, who didn’t start regularly playing until he got hooked watching poker on TV a few years ago, end up at a real table with heavy hitters?
Well, first he entered — for a mere $32 — a 10-player online satellite tournament at PartyPoker.com. When he won that August tournament, that earned him a $240 ticket to an on-line qualifying tournament in early September with 1,396 players. The top 23 finishers would win the big Party Poker package.
Bowie finished 22nd. And he’s still a little shocked by it all. “No, no, I can’t believe it,” he said.
As players lost and the number of 10-player online tables began to consolidate, Bowie knew his odds were improving.
“It got real exciting when there were less than 30 people,” he said.
Weeding out over 1,370 players took time, too. He sat down to start the tournament at 9 p.m. “When I finally stood up from the computer, it was 5:45 a.m.”
His wife, Katherine, watched for a while before she went to bed. When she awoke at one point early in the morning and came back downstairs, she was astounded to see her husband still playing. Her response was direct:
“What are you doing? Are you insane, staying up all night?”
When he told her that he was on the verge of winning with just 35 players left, she said: “I’m going back to bed.”
(Talk, by the way, agrees with Katherine. We pretty much think he’s insane. But then, we’re not much of a gambler. We’ve never really played poker, although we used to play a pretty mean game of Rook with relatives.)
And while Katherine was delighted with his win, she isn’t going to San Diego with him next week. His younger brother, Jim, another poker lover, will go with him instead. Bowie doesn’t know how well he can do in a live setting with serious players.
“It’s much different at the computer screen,” he said. “You can have whatever facial expression and body posture you want because people can’t see you.”
He would love to follow the example of Chris Moneymaker, a Tennessee accountant whose initial $39 investment in an online tournament grew into the 2003 World Series of Poker championship and a $2.5 million prize. Bowie admits it’s a long shot.
“I’m not feeling like Chris Moneymaker. I’m feeling very out of my league and just hoping I can compete,” he said.
Not that there’s any real pressure. After all, he isn’t playing with his own money. And how would Katherine have reacted if he had spent 10 grand to play?
“I’d have been done before the first card hit the table,” he said.
WPT's Promising Poker Hand
By Jeff Hwang
March 10, 2005
In its first full quarterly report as a public company, WPT Enterprises (Nasdaq: WPTE) gave investors a taste of where the company is going.
WPTE -- the company behind the wildly popular World Poker Tour show on the Travel Channel -- experienced a fourth-quarter rise in revenues to $5.7 million from $379,000 last year. On a GAAP basis, the company posted a net loss of $459,000, or $0.02 per share. But back out a $656,000 one-time non-cash charge related to some consultant stock options granted at the inception of the company, and WPTE actually showed a penny-per-share profit.
For the full year, the company showed a $752,000, or $0.04-per-share, GAAP profit on $17.6 million in revenues.
Following Tuesday afternoon's report, WPTE shares fell 2.6% to $18.98 per share on Wednesday. At Lakes Entertainment (Nasdaq: LACO), which owns 64% of WPTE, shares fell 4.6% to $16.01.
Still, the company's performance was promising. Domestic television licensing revenues jumped from $300,000 to $3.2 million in the fourth quarter, as the company delivered eight World Poker Tour episodes in Q4 of 2004 vs. one episode in the same period in 2003. WPTE also gained $2.5 million from a combination of international television licensing, product licensing, merchandise sales, and sponsorship fees.
WPTE expects first-quarter revenues of $2.9 million to $3.5 million, down sequentially because fewer episodes are scheduled for delivery during the quarter.
WPT Enterprises is uniquely positioned as a poker brand. The company faces stiff competition from Harrah's (NYSE: HET) World Series of Poker -- by far the biggest event in poker -- airing on Disney's (NYSE: DIS) ESPN. Other companies, such as General Electric's (NYSE: GE) NBC, appear eager to bring poker to network TV. Nevertheless, WPTE covers most of the biggest non-WSOP events in the game, securing a decent competitive advantage.
The company has also been capitalizing on its WPT brand to sell products such as poker chips, DVDs, and even start an instructional camp. During the second quarter, the company will leverage the brand further, introducing an international gaming website in a partnership with WagerWorks. In my opinion, the WPT brand gives the company a good chance at success at online gaming, which is an extremely attractive business, with many characteristics akin to eBay.
I think poker is definitely here to stay, and I like where WPTE is headed. It may still be too early to gauge the company's value, so the stock may be inappropriate for value-oriented investors. But if you're into speculation, WPT Enterprises may be worth a bet.
