WPT launches new Internet poker room

Wednesday, June 29, 2005 | 10:56 a.m.

A West Hollywood, Calif.-based poker empire has launched an Internet gambling site and hopes to be the first U.S. company to capitalize on the white-hot poker trend.

The company joins a competitive world of online poker rooms run by companies that are largely offshore and unregulated so as to escape prosecution by the Department of Justice, which has issued opinions that Internet gambling is illegal in the United States.

Publicly traded WPT Enterprises Inc. owns the World Poker Tour, a poker tournament series with events in Las Vegas and around the world and which is is broadcast on the Travel Channel cable network and in nearly 100 countries worldwide.

The new site, WPTonline.com, offers real-money poker games and other casino games such as slots and blackjack. To avoid prosecution, the site will attempt to block bets from U.S. players and countries where Internet gambling is prohibited.

Americans generate the vast majority of bets on poker sites and other Internet gambling sites. Keeping them out led to the early demise of several online casinos or plans to open them by major Las Vegas companies including MGM Mirage, Station Casinos Inc. and Harrah's Entertainment Inc. Las Vegas Sands Corp. also has abandoned previous plans to launch an Internet gambling site for non-U.S. residents. That site would have been based in Alderney, an island near France in the British Channel that had developed Internet gambling regulations and now hosts the World Poker Tour site.

WPT Enterprises hopes to succeed where U.S. casinos failed.

"We're not location-based, we're television-based," said Daniel Paul, vice president of marketing for WPTonline.com. "The hope is that you're watching the show and you want to be a part of it. You want to learn poker. This can be your launching pad to do it."

The company uses three blocking methods to keep out U.S. gamblers including a Web-based location tracking device and data provided by specific countries such as postal registries and credit card databases.

The World Poker Tour site allows U.S. residents and people located in countries with bans to gamble for free, a preparatory step should the U.S. decide to allow Internet gambling.

Sue Schneider, publisher of Interactive Gaming News and a consultant for Internet gambling sites, said the company has a unique advantage over casino companies.

Unlike some major U.S. casino brands, The World Poker Tour television show is as well known abroad, Schneider said. The timing also is right for poker, she added.

"They have a huge position internationally and I'd think their ability to cross-market (the site) would be pretty good," she said.

More than 80 governments worldwide allow some form of Internet gambling, according to Interactive Gaming News. The United Kingdom passed a bill this year that includes rules to regulate online gambling sites, while several European countries allow Internet gambling within their borders.

It's unclear whether the World Poker Tour's move will sway the federal government's hard-line approach, Schneider said.

Efforts to legalize online gambling for residents in North Dakota and the U.S. Virgin Islands were quickly quashed by the Department of Justice, she said.