World Poker Tour Enterprises (WPT-E), parent company and operator of WPTonline.com, announced that it is terminating its contract, and thus ceasing all relations with the online gambling software developer CryptoLogic.
CryptoLogic has supplied the software that powers the online poker room at WPTonline.com for little more than a year now. It has not been specified why WPT-E has made the crucial decision to end its relations with the online gaming software developer, but according to a WPT-E notice filed with the Securities and Exchange Commission last week, the online poker room will cease operation on or around November 14, 2008.
The closure of WPTonline.com is currently said to be temporary, though no re-opening date has been issued. By terminating its contract with CryptoLogic, WPT-E will be subject to a hefty penalty.
WPT-E signed a 3-year, $750,000 contract with CryptoLogic in 2007, with the agreement that WPT-E would pick up any uncovered costs from the operation of the online poker room. Combining these costs with the added expense of actually closing online poker room results in a final price tag estimated at a minimum of $2 million.
WPT-E has fully retained the right to reopen its online poker room, though full details of the company’s intentions have not been released. The WPT has also chosen not to disclose at this time whether it will be acquiring the license of a different online gaming software client, or developing its own proprietary network.
WPTonline.com had experienced significant difficulties from the time of launch. In 2006, the company was working to develop its own software platform, but in 2007 decided to license software from CryptoLogic. A major dilemma for WPT-E was the inability to accept US players while employing the software brand.
WPT-E has continued to encounter difficulties in 2008, with live poker tournament activity on a steady decline, forcing an unprecedented reaction that has never before taken place in the history of the WPT – a reduction in the number of WPT poker tournaments. Even the WPT-E stock has fallen from its 2005 glory of more than $27 per share, now resting at a precarious $0.46 per share.
WPT-E is not in jeopardy yet, having no debts, and assets valued at about $11 million. Its other online poker room, ClubWPT.com, has not felt the backlash of the current situation thus far. Based on player membership fees rather than real-money chip wagering, ClubWPT is 100% legal and open to American online poker players.
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