A lousy hand for poker's top promoter

(breakingviews.com) -- Poker's one-time leader has just folded its hand.

WPT Enterprises, the parent company of the renowned World Poker Tour, raised the game's stakes a few years ago, helping create the huge surge in popularity of no-limit Texas Hold 'Em. A televised tour, giving viewers a peek at players' hole cards, was the ace up its sleeve.

During the winning streak, there was talk that WPT could be worth substantially more than its $500 million market value, and that poker legend Doyle Brunson was plotting a bid. But WPT's owners didn't walk away from the table at the right moment. They are selling now for chump change -- a measly $12.3 million and a tiny cut of future revenue.

WPT counted on gamblers' luck. But new players started chipping away at its stack. The company responded by going on tilt -- betting too much on expansion, including costly failed ventures online and in China.

PartyGaming, WPT's mooted buyer, has had problems of its own. It suffered a bad beat in 2006 when the US decided not to allow internet gambling, costing the company $105 million in a settlement with the Department of Justice earlier this year. But PartyGaming is still a shrewd enough player to know that even a middling pair beats one of a kind.

The poker craze may have died down but it hasn't died. The World Poker Tour is a recognized brand with its tournaments still broadcast in 150 countries, and a new deal for an eighth season on Fox Sports in the US.

The big wager for PartyGaming, however, appears to be a fresh one on the U.S. legalizing online gambling. Barney Frank, the representative from Massachusetts, has renewed efforts to roll back the ban. Proponents think they might get a friendlier hearing this time around, what with Las Vegas down and out, a Democrat Congress and a president who knows that a flush beats a straight.

For PartyGaming's relatively small buy-in, it could win itself a pretty big pot.