UNITED STATES SECURITIES and EXCHANGE COMMISSION Washington, D.C
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2008 ANNUAL REPORT TO STOCKHOLDERS Dear Fellow Stockholders: We extended our relationship with News Corporation by creating a co-branded ClubWPT branded poker destination This past year witnessed a number of significant on MySpace.com. The MySpace poker hub provides games, changes for WPT Enterprises as we repositioned the entertainment, poker content, video clips, past World Poker Company to focus on our core television business and Tour shows and ClubWPT.com television shows, and is our emerging sponsorship business. During the year, currently enjoying significant page views. If you have not we exited the real money gaming business due to already done so, I encourage our poker community to see the timing and market conditions and downsized exciting things going on at the MySpace.com/ClubWPT. operations to reduce costs and focus spending on critical revenue generating activities. In June, we sponsored and filmed the first ever WPT China National Traktor Poker Tour championship, which In 2008, we delivered 18 Season Six WPT was held in Nanjing. Following the success of Season I, episodes to the Game Show Network who will Season II of the Traktor Poker Tour began in October in continue to broadcast and support Season Six of the Lanzhou. Like Season I, there are 15 regional tour stops in World Poker Tour into 2009 and beyond. We also this tour that culminate in the Grand Finals to be held in established a partnership with Fox Sports Net and the Beijing in June 2009. In the fourth quarter, we successfully News Corporation family in which FSN will air 26 launched our internet and mobile Traktor poker platforms one-hour episodes of Season Seven of the World featuring games and community, inked our first consumer Poker Tour television series across the U.S. as part of product sponsor and began a dedicated marketing campaign their Sunday Sports block beginning in January 2009. for the internet and mobile Traktor poker platforms. The Our relationship with FSN continued our aggressive Traktor Poker Tour hit the television airwaves on Nanjing transition from a U.S. television licensing focused Entertainment Television and LiaoNing TV, becoming the business to an international sponsorship-focused first government sanctioned televised poker competition in sports league. We signed a significant sponsorship China. Since then, we signed a broadcast agreement with deal with FullTiltPoker.net in the fourth quarter of Henan TV. 2008, to sponsor WPT Season Seven in the U.S. and Mexico. We are now selling sponsorship of Season For 2009, our focus is on building our television Seven in the international markets and placing Season sponsorship business as we solidify our position as the Seven on international television networks. The original and best global poker tour. While the current results are early, but we are encouraged by the economic environment is challenging, we remain feedback and opportunities we are receiving in enthusiastic about the future and our ability to maximize and important markets. monetize the value of the unique World Poker Tour brand and assets. We ended the year with a strong balance sheet We launched our online subscription poker with no debt, and are maintaining a tight focus on managing website, ClubWPT.com, in January 2008 and our expenses. We would like to thank our dedicated expanded our commitment in the fourth quarter by employees for their hard work, our Board for their guidance entering into a partnership with FSN to promote and and our stockholders for their support. build the business. To that end, we created a new television series on FSN called ClubWPT.com in Sincerely, which ClubWPT.com customers play on our subscription poker website for the opportunity to be in a televised poker program on FSN. Ten one-hour episodes aired in the fourth quarter, with three more airing in January and February of 2009. While still a young business, ClubWPT.com signed up 14,000 Steven Lipscomb subscribers by the end of the initial FSN television series run in February 2009. Founder, President and Chief Executive Officer March 4, 2009 2008 ANNUAL REPORT ON FORM 10-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 28, 2008 Or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO COMMISSION FILE NO. 0-50848 WPT ENTERPRISES, INC. (Exact Name of Registrant as Specified in Its Charter) Delaware 77-0639000 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification No.) 5700 Wilshire Boulevard, Suite 350 Los Angeles, California 90036 Telephone: (323) 330-9900 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices) Securities registered pursuant to Section 12(b) of the Exchange Act: Title of each class Name of each exchange on which registered Common Stock, $0.001 par value NASDAQ Global Market Securities registered pursuant to Section 12(g) of the Exchange Act: None Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ⌧ No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ⌧ Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act (check one): Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company ⌧ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ⌧ No The aggregate market value of the common stock of the registrant held by non-affiliates, based on the closing sale price on June 27, 2008, the last business day of the registrant’s most recently completed second fiscal quarter was $6,713,490. For purposes of this computation, affiliates of the registrant on that date are deemed to be the registrant’s executive officers, directors and parent company, Lakes Entertainment, Inc. As of March 2, 2009, there were 20,603,333 shares of the registrant’s common stock issued and outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement in connection with the annual meeting of stockholders to be held on May 20, 2009 are incorporated by reference into Part III, Items 10 through 14. WPT ENTERPRISES, INC. TABLE OF CONTENTS PART I Item 1. Business ..................................................................... 1 Item 1A. Risk Factors .................................................................. 11 Item 1B. Unresolved Staff Comments ..................................................... 17 Item 2. Properties .................................................................... 17 Item 3. Legal Proceedings ............................................................. 17 Item 4. Submission of Matters to a Vote of Security Holders................................. 17 Executive Officers of the Company.......................................................... 17 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .......................................................... 19 Item 6. Selected Financial Data......................................................... 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation .. 20 Item 7A. Quantitative and Qualitative Disclosures about Market Risk........................... 28 Item 8. Financial Statements and Supplemental Data ....................................... 28 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.. 28 Item 9A. Controls and Procedures ........................................................ 28 Item 9B. Other Information ............................................................. 28 PART III Item 10. Directors, Executive Officers and Corporate Governance ............................. 29 Item 11. Executive Compensation........................................................ 29 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .................................................................... 29 Item 13. Certain Relationships and Related Transactions, and Director Independence............. 29 Item 14. Principal Accountant Fees and Services ........................................... 29 PART IV Item 15. Exhibits and Financial Statement Schedules .......................................