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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 2, 2005


o		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. 0-24993

WPT ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)


Delaware		77-06390000

(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

5700 Wilshire Boulevard
Suite 350
Los Angeles, California		90036

(Address of principal executive offices)		(Zip Code)

(323) 330-9900
(Registrant’s telephone number, including area code)

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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


		Yes þ		No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).


		Yes o		No þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of November 1, 2005, there were 20,158,333 shares of Common Stock, $0.001 par value per share, outstanding.

WPT ENTERPRISES, INC.
Condensed Balance Sheets
October 2, 2005 (unaudited) and January 2, 2005


	October 2, 2005			January 2, 2005
	(In thousands)
Assets
Current assets:
Cash and cash equivalents	$	3,015		$	4,525
Short-term investments		27,471			27,755
Accounts receivable, net of allowance		1,480			1,950
Deferred television costs		1,212			917
Deferred tax assets		95			136
Inventory		51			52
Other		944			624

		34,268			35,959


Property and equipment, net		1,361			703
Restricted cash		249			244
Other assets		446			207

	$	36,324		$	37,113


Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	83		$	17
Accrued payroll and related		242			292
Other accrued expenses		1,953			1,321
Due to parent		2			16
Deferred revenue		4,764			3,280

		7,044			4,926


Common stock subject to repurchase		—			618

Stockholders’ equity:
Preferred stock, par value of $0.001 Authorized 20,000 shares; none issued and outstanding		—			—
Common stock, $0.001 par value authorized 100,000 shares; 20,158 and 19,480 shares issued and outstanding		20			19
Additional paid-in capital		34,128			32,767
Deficit		(4,787	)		(1,205	)
Accumulated other comprehensive loss		(79	)		(6	)
Deferred compensation		(2	)		(6	)

		29,280			31,569

	$	36,324		$	37,113

The accompanying notes are an integral part of these condensed financial statements.

WPT ENTERPRISES, INC.
Condensed Statements of Loss
Three months ended October 2, 2005 and October 3, 2004
(unaudited)


	2005			2004
	(In thousands, except per share data)
Revenues:
License fees:
Domestic television	$	442		$	2,350
International television		395			345
Product licensing		933			159

		1,770			2,854

Online gaming		170			—

Event hosting and sponsorship fees		73			92
Other		115			28

		2,128			2,974

Cost of revenues		561			1,942


Gross profit		1,567			1,032
Expenses:
Selling and administrative		3,319			1,508
Depreciation		56			44

		3,375			1,552


Loss from operations		(1,808	)		(520	)


Other income (expense):
Interest income		254			56
Interest expense		—			(4	)


Net loss	$	(1,554	)	$	(468	)


Net loss per common share — basic	$	(0.08	)	$	(0.03	)


Net loss per common share — diluted	$	(0.08	)	$	(0.03	)


Weighted average common shares outstanding — basic		19,721			16,748
Dilutive effect of restricted stock		—			—
Dilutive effect of stock options		—			—

Weighted average common shares outstanding — diluted		19,721			16,748

The accompanying notes are an integral part of these condensed financial statements.

WPT ENTERPRISES, INC.
Condensed Statements of (Loss) Earnings
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)


	2005			2004
	(In thousands, except per share data)
Revenues:
License fees:
Domestic television	$	5,993		$	9,545
International television		1,456			510
Product licensing		3,125			212

		10,574			10,267

Online gaming		170			—

Event hosting and sponsorship fees		1,785			1,360
Other		301			205

		12,830			11,832

Cost of revenues		8,125			7,059


Gross profit		4,705			4,773
Expenses:
Selling and administrative		8,908			3,473
Depreciation		113			111

		9,021			3,584


Earnings (loss) from operations		(4,316	)		1,189


Other income (expense):
Interest income		734			56
Interest expense		—			(34	)


Net earnings (loss)	$	(3,582	)	$	1,211


Net earnings (loss) per common share — basic	$	(0.18	)	$	0.08


Net earnings (loss) per common share — diluted	$	(0.18	)	$	0.07


Weighted average common shares outstanding — basic		19,525			14,868

Dilutive effect of restricted stock		—			1,333
Dilutive effect of stock options		—			684
Dilutive effect of common stock subject to repurchase		—			15

Weighted average common shares outstanding — diluted		19,525			16,900

The accompanying notes are an integral part of these condensed financial statements.

WPT ENTERPRISES, INC.
Condensed Statements of Stockholders’ Equity
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)


																				Accumulated
											Additional									Other
	Class A Units						Common Stock				Paid-in						Deferred			Comprehensive
	Shares			Dollars			Shares		Dollars		Capital			Deficit			Compensation			Loss			Total
	(In thousands)
2005

BALANCES AT JANUARY 3, 2005		—		$	—			19,480	$	19	$	32,767		$	(1,205	)	$	(6	)	$	(6	)	$	31,569
Reduction of deferred compensation																		4						4
Common stock issued								678		1		28												29
Stock-based compensation awards												714												714
Common stock subject to repurchase												643												643
Interest on common stock subject to repurchase												(24	)											(24	)
Other comprehensive loss																					(73	)		(73	)
Net loss															(3,582	)								(3,582	)

BALANCES AT OCTOBER 2, 2005		—		$	—			20,158	$	20	$	34,128		$	(4,787	)	$	(2	)	$	(79	)	$	29,280


2004

BALANCES AT DECEMBER 29, 2003		93		$	119			—	$	—	$	361		$	(2,637	)	$	(12	)	$	—		$	(2,169	)
Reduction of deferred compensation																		4						4
Stock-based compensation awards												537												537
Conversion of LLC to C-corporation		(93	)		(119	)		14,880		15		(561	)		680									15
Net proceeds from issuance of common stock								4,600		4		32,386												32,390
Common stock subject to repurchase												(602	)											(602	)
Interest on common stock subject to repurchase												(6	)											(6	)
Other comprehensive earnings																					3			3
Net earnings															1,211									1,211

BALANCES AT OCTOBER 3, 2004		—		$	—			19,480	$	19	$	32,115		$	(746	)	$	(8	)	$	3		$	31,383

The accompanying notes are an integral part of these condensed financial statements.

WPT ENTERPRISES, INC.
Condensed Statements of Cash Flows
Nine months ended October 2, 2005 and October 3, 2004
(unaudited)


	October 2, 2005			October 3, 2004
	(In thousands)
OPERATING ACTIVITIES:
Net earnings (loss)	$	(3,582	)	$	1,211
Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities:
Depreciation		113			111
Production depreciation		191			—
Stock-based compensation awards		772			545
Bad debts		(51	)		—
Changes in operating assets and liabilities:
Accounts receivable		614			(153	)
Inventory		1			(150	)
Deferred television costs		(349	)		824
Other assets		(559	)		(505	)
Accounts payable		66			500
Due to parent		(14	)		(187	)
Deferred revenue		1,484			3,562
Accrued expenses		582			(5	)

Net cash provided by (used in) operating activities		(732	)		5,753


INVESTING ACTIVITIES:
Purchase of property and equipment		(962	)		(478	)
Loan to and investment in unconsolidated investee		—			(207	)
Decrease (increase) in short-term investments		160			(6,013	)

Net cash used in investing activities		(802	)		(6,698	)


FINANCING ACTIVITIES:
Increase in bank overdraft		—			(184	)
Increase in restricted cash		(5	)		(244	)
Net proceeds from issuance of common stock		—			32,405
Proceeds from stock option exercise		29			—
Repayments of notes payable to parent		—			(3,429	)

Net cash provided by financing activities		24			28,548


Net increase (decrease) in cash and cash equivalents		(1,510	)		27,603
Cash and cash equivalents — beginning of period		4,525			—

Cash and cash equivalents — end of period	$	3,015		$	27,603

The accompanying notes are an integral part of these condensed financial statements.

WPT ENTERPRISES, INC.

Notes to Condensed Financial Statements
(Unaudited)

1. BASIS OF PRESENTATION

These condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) applicable to interim financial information. Accordingly, certain information normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America has been condensed or omitted. For further information, please refer to the annual audited financial statements of the Company, and the related notes, included within the Company’s Annual Report on Form 10-K for the year ended January 2, 2005, previously filed with the SEC, from which the information as of that date, is derived.

In the opinion of management, all adjustments considered necessary for a fair presentation have been included. The results for the current interim period are not necessarily indicative of the results to be expected for the full year.

Certain amounts, as previously reported, have been reclassified to conform to the current period presentation.

2. DEFERRED TELEVISION COSTS

The Company accounts for deferred television costs in accordance with SOP No. 00-2, Accounting by Producers or Distributors of Films. Deferred television costs include capitalizable direct costs, production overhead and development costs and are stated at the lower of cost or net realizable value based on anticipated revenue to be generated by the episode once it has been delivered and accepted, at which time the asset is expensed and revenue recognized for the episode. Production overhead costs include costs that are directly related to production and are incremental costs. These costs primarily include office facilities, depreciation, consultant stock option expense and insurance related to production. Production overhead office facilities and insurance costs are determined based on percentage of headcount, and are allocated to deferred television costs based on number of episodes. The Company does not currently anticipate any revenues in excess of those subject to existing contractual relationships.

For the nine months ended October 2, 2005, approximately $3.2 million of cost of revenues is directly related to the production of a new television series developed by the Company, currently known as the Professional Poker Tour^TM (PPT). PPT production costs were expensed in this period rather than being capitalized as deferred television costs as it is the Company’s policy to expense production costs if a licensing agreement has not been formally executed, or the Company does not have a firm commitment of revenue for the series.

Capitalized deferred television costs at October 2, 2005 and January 2, 2005 consist of the following:


	October 2,		January 2,
	2005		2005
	(In thousands)
Deferred television costs
In-production	$	973	$	911
Development and pre-production		239		6

	$	1,212	$	917

As of October 2 and January 2, 2005, overhead costs of $233,000 and $189,000, respectively, were included in total capitalized deferred television costs. Based upon the latest delivery schedule as of October 2, 2005, management estimates that approximately 44% of capitalized deferred television costs are expected to be recognized during the remainder of fiscal 2005.

WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)

3. EARNINGS (LOSS) PER SHARE

Basic earnings (loss) per common share is calculated by dividing net income (net loss) by the weighted average number of common shares outstanding during the period. Shares for stock options granted to employees and consultants of the Company are included in the computation after the options have vested because the shares are issuable for relatively minimal cash consideration in relation to the fair value of the options (See Note 4). Diluted earnings (loss) per common share is calculated by adjusting weighted average outstanding shares, assuming conversion of all potentially dilutive stock options and awards. The effects of stock options, restricted stock and warrants have not been included in diluted loss per share for the three and nine months ended October 2, 2005, as the effect would have been anti-dilutive.

4. STOCK-BASED COMPENSATION

The Company accounts for equity-based employee compensation under APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations.

The following table illustrates the effect on net earnings (loss) if the Company had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, to equity-based compensation.


	Three Months Ended						Nine Months Ended
	October 2, 2005			October 3, 2004			October 2, 2005			October 3, 2004
	(In thousands, except per share data)
Net earnings (loss) as reported	$	(1,554	)	$	(468	)		(3,582	)	$	1,211
Add: equity-based compensation expense included in reported net earnings		—			—			—			—
Deduct: total equity-based compensation expense determined under the fair value method		(689	)		(321	)		(1,854	)		(322	)
Net earnings (loss) as pro forma under SFAS No. 123	$	(2,243	)	$	(789	)		(5,436	)		889
Net (loss) earnings per common share – basic – as reported	$	(0.08	)	$	(0.03	)	$	(0.18	)	$	0.08
Net (loss) earnings per common share – diluted – as reported	$	(0.08	)	$	(0.03	)	$	(0.18	)	$	0.07
Net (loss) earnings per common share – basic – pro forma	$	(0.11	)	$	(0.05	)	$	(0.28	)	$	0.06
Net (loss) earnings per common share – diluted – pro forma	$	(0.11	)	$	(0.05	)	$	(0.28	)	$	0.05

WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)

5. SEGMENT INFORMATION

The operating segments reported below are the segments of the Company for which separate financial information is available and for which operating results are evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Three months ended October 2, 2005 (in thousands):


			Consumer		Online		Corporate
	Studios		Products		Gaming		Alliances		Corporate		Total
Revenues	$	890	$	995	$	170	$	73	$	—	$	2,128
Cost of revenues		273		185		103		—		—		561
Gross profit		617		810		67		73		—		1,567
Total assets		2,260		832		489		12		32,731		36,324
Depreciation		65		—		—		—		56		121

Three months ended October 3, 2004 (in thousands):


			Consumer		Online		Corporate
	Studios		Products		Gaming		Alliances		Corporate		Total
Revenues	$	2,745	$	186	$	—	$	43	$	—	$	2,974
Cost of revenues		1,935		7		—		—		—		1,942
Gross profit		810		179		—		43		—		1,032
Total assets		1,564		450		—		—		34,950		36,964
Depreciation		—		—		—		—		44		44

Nine months ended October 2, 2005 (in thousands):


			Consumer		Online		Corporate
	Studios		Products		Gaming		Alliances		Corporate		Total
Revenues	$	8,552	$	3,336	$	170	$	772	$	—	$	12,830
Cost of revenues		7,642		380		103		—		—		8,125
Gross profit		910		2,956		67		772		—		4,705
Total assets		2,260		832		489		12		32,731		36,324
Depreciation		191		—		—		—		113		304

Nine months ended October 3, 2004 (in thousands):


			Consumer		Online		Corporate
	Studios		Products		Gaming		Alliances		Corporate		Total
Revenues	$	10,906	$	416	$	—	$	510	$	—	$	11,832
Cost of revenues		7,004		55		—		—		—		7,059
Gross profit		3,902		361		—		510		—		4,773
Total assets		1,564		450		—		—		34,950		36,964
Depreciation		—		—		—		—		111		111

WPT ENTERPRISES, INC.
Notes to Condensed Financial Statements (Continued)
(Unaudited)

6. SUBSEQUENT EVENTS

At October 2, 2005, WPTE had a nominal investment, consisting of a 15% ownership interest in (carried at cost), and a loan receivable from PokerTek, a company that offers an electronic poker table called the PokerPro system that provides a fully automated poker room environment to tribal and commercial casinos and card clubs. On October 14, 2005, PokerTek announced a public offering of 2,000,000 shares of common stock at a price of $11 per share. Concurrently with the public offering, WPTE’s ownership interest was diluted to 11.7% (1,080,000 shares), and PokerTek repaid WPTE the outstanding loan amount at its maturity value of $185,000. The Company’s shares in PokerTek are restricted, thus prohibiting any sale of such shares in the market for six months. Nevertheless, in accordance with Statement of Financial Accounting Standards (SFAS) No. 115, Accounting for Certain Investments in Debt and Equity Securities, WPTE will adjust its investment to fair market value and classify it as “available for sale” in the fourth quarter of 2005, since the Company does not expect to have any cash needs or plans to sell these shares in the foreseeable future. Accordingly, WPTE will record net unrealized gains and losses from this investment in a separate component of shareholder’s equity (i.e. within the “accumulated other comprehensive earnings” line item in the stockholders’ equity section of the balance sheet) beginning in the fourth quarter of 2005.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
And Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

We create branded entertainment and consumer products driven by the development, production and marketing of televised programming based on gaming themes. We created the World Poker Tour^®, a television show based on a series of high-stakes poker tournaments that airs on the Travel Channel in the U.S. and in more than 120 territories globally. Our immediate business plan involves continuing to build our World Poker Tour concept into a highly recognizable brand from which we currently generate revenues through television and product licensing fees, casino host fees, sponsorship fees, merchandise and home entertainment sales. We are pursuing this plan through four operating business units, described in greater detail below:

	•		WPT Studios, a multi-media entertainment division.

	•		WPT Consumer Products, a branded consumer products division.

	•		WPT Corporate Alliances, a sponsorship and event management division.

	•		WPT Online Gaming, an online poker and casino gaming division.

WPT Studios generates revenue through the domestic and international licensing of broadcast and telecast rights and casino host fees from casinos and cardrooms that host the televised World Poker Tour events. In early 2003, WPTE entered into an agreement with the Travel Channel, L.L.C. (TRV or Travel Channel), granting TRV the right to broadcast the first season of the World Poker Tour^® (WPT) television series. WPTE subsequently reached an agreement with TRV for a second season with TRV being granted options for five additional seasons. Under the agreements with TRV (WPT Agreements), TRV has the exclusive right, license, and privilege to exhibit, market, distribute, transmit, perform and otherwise exploit each of the season’s two-hour programs produced by WPTE for an unlimited number of times over three and four year periods within the United States. Under the WPT Agreements, we receive fixed license fees for each episode we produce, which are payable at various times during the pre-production, production and post-production process and are recognized upon the Travel Channel’s receipt and acceptance of the completed episode. Television production costs related to the World Poker Tour are generally capitalized and charged to cost of revenues as revenues are recognized.

TRV exercised its option for Seasons Three and Four in May 2004 and March 2005, respectively, and has additional options for the following three seasons (Seasons Five through Seven) under which WPTE would receive fixed license fees for each episode the Company produces. For each season covered by an option exercised by the Travel Channel, the Travel Channel will have exclusive rights to exhibit the programs in that season an unlimited number of times on its television network (or any other television network owned by the Discovery Channel) in the U.S. for four years.

Season One of the World Poker Tour consisted of 15 total episodes that were exhibited on the Travel Channel beginning in the spring of 2003. Season Two consisted of 25 total episodes (13 regular tour stops and 12 specials). We completed production of the episodes comprising our Season Two programming during June 2004. Our production of Season Three began in the third quarter of 2004, and we began to deliver episodes in the fourth quarter of fiscal 2004. The completion of production and the final delivery of Season Three episodes occurred during the second quarter of fiscal 2005. We began the production of Season Four in May 2005 and expect to complete production at the WPT Championship in April 2006. We delivered our first episode of Season Four during the third quarter of 2005 and expect to deliver the final episode sometime during the second quarter of 2006. Since our inception, the WPT Studios division has been responsible for approximately 79% of our company’s total revenue, and fees from the licensing of the World Poker Tour episodes to the Travel Channel for distribution in the U.S. have been responsible for approximately 65% of our company’s total revenue.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Our future revenue growth from the U.S. telecasts of the series will be limited by our agreement with the Travel Channel. Our agreement with the Travel Channel grants them options to acquire episodes produced in connection with the three seasons following Season Four, which if executed, would result in our production of additional episodes for the Travel Channel and our receipt of fixed license fees for each episode we produce. For each season covered by an option exercised by the Travel Channel, the Travel Channel will have exclusive rights to exhibit the episodes comprising that season an unlimited number of times on its television network or any other television network owned by the Discovery Channel in the U.S. for four years.

In addition to licensing our programming to the Travel Channel for domestic exhibition, we currently have license agreements permitting international distribution of our programming in over 120 territories. Our international sales agent remits to us license fees net of a sales fee and agreed upon sales and marketing expenses. The Travel Channel has the right to receive a portion of our adjusted gross revenues from international television licenses and certain other sources after specified minimum amounts are met.

We also generate revenue from annual host fees payable by the member casinos that host World Poker Tour events (our member casinos). We currently have written agreements with 12 member casinos, and an unwritten arrangement with one member casino.

In October 2004, we announced the formation of the Professional Poker Tour (PPT), an invitation only tournament restricted to poker’s professional elite, including champions from major poker competitions. The PPT currently includes five major stops: Foxwoods, Bellagio, Goldstrike Casino, Commerce Casino and Mirage. We filmed these five events, which may result in multiple episodes, and contributed to the event fees in the fourth quarter of 2004 and first and second quarters of 2005. We do not have an agreement with any party regarding the distribution of the PPT, and we are currently engaged in a dispute with TRV regarding, among other things, our ability to enter into agreements for distribution of the PPT television series in the United States. We intend to immediately seek distribution of the PPT series outside the United States. Additionally, we do not expect to realize revenues associated with the PPT in the fourth quarter of 2005 as we do not expect to have a distribution agreement in place until after the fourth quarter of 2005.

WPT Consumer Products derives revenues from the WPT Consumer Products business unit principally through royalties from the licensing of our brand to companies seeking to use the World Poker Tour brand and logo in the retail sales of their consumer products. In addition, this business unit generates revenue from direct sales of company-produced merchandise featuring our World Poker Tour brand. The Travel Channel has the right to receive a percentage of our adjusted gross revenues above certain levels from our product licensing and merchandising activities.

We have signed and are in the process of negotiating licensing agreements with various licensees for a variety of consumer products in the U.S. and abroad. For example, we have an agreement with International Game Technology, a slot machine manufacturer, to license the World Poker Tour brand in connection with the development of electronic, casino-based, poker-related gaming machines. Furthermore, we have entered into an agreement with Take-Two Interactive Software, a video game publisher, to produce poker games for console, handheld and PC formats, and we recently shipped initial units out into the marketplace in October 2005.

WPT Corporate Alliances generates revenue through corporate sponsorship and management of televised and live events. Our sponsorship program uses the professional sports model as a method to foster entitlement sponsorship opportunities and naming rights to major corporations. Anheuser-Busch’s Michelob AmberBock was the official beer of Season Three of the World Poker Tour on the Travel Channel. During the third quarter of 2005, Anheuser-Busch announced that its sponsorship in Season Four will now feature its largest brand, Budweiser, as the official beer of the World Poker Tour on the Travel Channel.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

WPT Online Gaming generates revenue through our agreement with WagerWorks, Inc. (WagerWorks) pursuant to which we granted to WagerWorks a license to utilize the WPT brand to create a WPT-branded online gaming website, WPTonline.com, which features an online poker room and an online casino with a broad selection of slots and table games. In exchange for the license to WagerWorks of our brand, WagerWorks shares with us a percentage of all net revenue it collects from the operation of the online poker room and online casino. We anticipate that on-air promotion of WPTonline.com via international World Poker Tour television telecasts will be the primary marketing tool for driving poker players to the website. Although any internet user can access WPTonline.com via the world-wide-web, the website does not permit bets to be made from players in the U.S. and other jurisdictions where the legal status of online gaming is prohibited or in question. WPTonline.com officially launched on June 29, 2005, and since its launch, it has generated approximately $170,000 in revenue during 2005.

Nine Months Ended October 2, 2005 Compared to the Nine Months Ended October 3, 2004

Revenues

Total revenues increased by $1.0 million for the nine months ended October 2, 2005, compared to the same period in the prior year. Domestic television license revenues decreased by $3.6 million in the first nine months of 2005 compared to the first nine months of 2004. The reduction in domestic television license revenue reported in the first nine months of 2005 reflected the delivery of only thirteen episodes of Season Three and one episode of Season Four compared to twenty-four Season Two episodes that were delivered during the 2004 period. International television licensing revenues increased by $0.9 million for the nine months ended October 2, 2005, compared to the nine months ended October 3, 2004, as we increased distribution to more territories in the current period. Revenues for the nine months ended October 2, 2005, also included $2.9 million more in product licensing revenues than the nine months ended October 3, 2004 as our licensees had substantially more product in the marketplace in 2005.

Costs and Expenses

Our cost of revenues increased by $1.1 million in the first nine months of 2005 as compared to the first nine months of 2004, and accordingly, overall gross margins were 36.7% in the first nine months of 2005 compared to 40.3% in the first nine months of 2004. Cost of revenues for the first nine months of 2005 included approximately $3.2 million related to the premiere season of the PPT, as well as $3.9 million and $0.2 million in production costs for Season Three and Season Four episodes, respectively, of the WPT. PPT production costs were expensed in this period rather than being capitalized because we do not capitalize television production costs until a licensing agreement has been executed or we have a firm commitment of revenue for the series. For the first nine months of 2004, cost of revenues of $7.1 million was related primarily to the production of Season Two episodes of the WPT. There were no PPT production costs incurred during the first nine months of 2004. Additionally, cost of revenues in the first nine months of 2005 included approximately $0.8 million of non-cash compensation expense related to consultant stock options compared to $0.5 million in the first nine months of 2004. Excluding the non-cash compensation expenses and PPT production costs expensed during the first nine months of 2005, gross margin for the first nine months of 2005 would have been 67.8% compared to 44.9% for the corresponding period in 2004, with the higher margin in 2005 due to increased revenues from product licensing, international television licensing and sponsorship.

Selling and administrative expenses increased by $5.4 million for the nine months ended October 2, 2005, compared to the nine months ended October 3, 2004. This increase is primarily due to additional headcount costs, product licensing commissions, marketing expenses associated with online gaming and legal and audit fees incurred during the 2005 period associated with business development, increased product licensing revenues, online gaming launch, growth and regulatory compliance costs related to being an independent public company following our initial public offering in the third quarter of 2004.

Other

Interest income increased by $0.7 million for the nine months ended October 2, 2005, compared to the same period in the prior year primarily due to the higher investment balances in the current year from the unexpended proceeds of our initial public offering in the third quarter of 2004.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Net Earnings (Loss)

Net loss for the nine months ended October 2, 2005 was $3.6 million compared to net income of $1.2 million for the nine months ended October 3, 2004. The reduction in net earnings is primarily due to the introduction of PPT production costs in 2005, with no associated revenues, and an increase in selling and administrative expenses, principally as a result of our marketing and operating costs of launching our online gaming initiative, and overall growth of compliance expenses resulting from being an independent public company.

Three Months Ended October 2, 2005 Compared to the Three Months Ended October 3, 2004

Revenues

Total revenues decreased by $0.8 million for the three months ended October 3, 2005 as compared the same period in the prior year. Domestic television license revenues decreased by $1.9 million in the three months ended October 3, 2005 compared to the three months ended October 3, 2004. The reduction in domestic television license revenue reported in the third quarter of 2005 reflected the delivery of one Season Four episode compared to six Season Two episodes delivered during the third quarter of 2004. International television licensing revenues increased by $0.1 million for the three months ended October 2, 2005 compared to the three months ended October 3, 2004 as we increased distribution to more territories in the current period. Revenues for the three months ended October 2, 2005 also included $0.8 million more in product licensing revenues than the three months ended October 3, 2004 as our licensees had substantially more product in the marketplace in 2005.

Costs and Expenses

Our cost of revenues decreased by $1.4 million in the third quarter of 2005 as compared to the third quarter of 2004, and accordingly, overall gross margins were 73.6% in the third quarter of 2005 compared to 34.7% in the third quarter of 2004. Cost of revenues for the third quarter of 2005 included approximately $0.2 million related to the premiere season of the PPT, as well as $0.2 million in production costs relating to the delivery of WPT episodes. PPT production costs were expensed in this period rather than being capitalized because we do not capitalize television production costs until a licensing agreement has been executed or we have a firm commitment of revenue for the series. For the third quarter of 2004, cost of revenues of $1.9 million was related primarily to the production of Season Two episodes of the WPT. There were no PPT production costs incurred during the third quarter of 2004. Additionally, cost of revenues in the first three months of 2005 included approximately $0.2 million of non-cash compensation benefit related to consultant stock options compared to $0.3 million of non-cash compensation expense in the first three months of 2004. Excluding the non-cash compensation benefit and expense and PPT production costs expensed during the first three months of 2005, gross margin for the first three months of 2005 would have been 74.7% compared to 43.9% for the corresponding period in 2004, with the higher margin in 2005 due to increased revenues from product licensing and international television licensing.

Selling and administrative expenses increased by $1.8 million for the three months ended October 2, 2005, compared to the three months ended October 3, 2004. This increase is primarily due to additional headcount costs, product licensing commissions, marketing expenses associated with online gaming and legal and audit fees incurred during the 2005 period associated with business development, increased product licensing revenues, online gaming launch, growth and regulatory compliance costs related to being an independent public company following our initial public offering in the third quarter of 2004.

Other

Interest income increased by $0.2 million for the three months ended October 2, 2005, compared to the same period in the prior year primarily due to the higher investment balances in the current year from the unexpended proceeds of our initial public offering in the third quarter of 2004.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Net Earnings (Loss)

Net loss for the three months ended October 2, 2005 was $1.6 million compared to net loss of $0.5 million for the three months ended October 3, 2004. The reduction in net earnings is primarily due to the introduction of PPT production costs in 2005, with no associated revenues, and an increase in selling and administrative expenses, principally as a result of our marketing and operating costs of launching our online gaming initiative, and overall growth of compliance expenses resulting from being an independent public company.

Liquidity and Capital Resources

During the first nine months of 2005, we funded our operations primarily through net cash provided by operating activities. Our principal cash requirements consist of television production costs, payroll and benefits, professional fees, marketing costs, business insurance and office lease costs. While we are expecting to invest significant capital resources in connection with our new online venture, WPTonline.com, and while we had aggregate negative operating and investment cash flow of $1.5 million in the first nine months of 2005, management still believes that its on-going efforts to contain costs and operate efficiently, combined with the growth in licensing revenues, will result in cash flows to support our operations. We expect that our cash, cash equivalents and short term investments will be sufficient to fund our working capital and capital expenditure requirements for at least the next twelve months.

However, we may from time to time seek additional capital to fund our operations and fund our expansion plans consistent with our anticipated changes in operations and infrastructure. To raise capital, we may seek to sell additional equity securities, issue debt or convertible securities, or seek to obtain credit facilities through financial institutions.

The table below sets forth our known contractual obligations (in thousands) as of October 2, 2005:


	Payments Due by Period
	Total		Less Than 1		1-3		3-5		More Than 5
Contractual obligations			Year		Years		Years		Years
Operating lease obligations (1)	$	2,808	$	459	$	964	$	1,029	$	356
Purchase obligations (2)		1,127		535		592		—		—
Employee obligations (3)		805		680		125		—		—

	$	4,740	$	1,674	$	1,681	$	1,029	$	356


(1)		Operating lease obligations include rent payments on our corporate office space. Monthly lease payments began at approximately $38,000 and escalate to approximately $45,000 over the six-year lease term. The amount set forth in the table above assumes monthly lease payments through May 2011.

(2)		Purchase obligations include contractual obligations of $1.1 million related to the establishment of our internet gaming site.

(3)		Employee obligations include the base salaries payable to Steven Lipscomb, Audrey Kania and Robyn Moder under their respective employment agreements.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Critical Accounting Estimates and Policies

Although our financial statements necessarily make use of certain accounting estimates by management, except as described below, we believe there are no matters that are the subject of such estimates that are so highly uncertain or susceptible to change as to present a significant risk of a material impact on our financial condition or operating performance. Moreover, except as described below, we do not employ any critical accounting policies that are selected from among available alternatives or require the exercise of significant management judgment to apply.

Revenue Recognition: Revenue from the domestic and international distribution of our television series is recognized as earned under the following criteria established by the American Institute of Certified Public Accountants Statement of Position (SOP) No. 00-2, Accounting by Producers or Distributors of Films:

	•		Persuasive evidence of an arrangement exists;

	•		The show/episode is complete, and in accordance with the terms of the arrangement, has been delivered or is available for immediate and unconditional delivery;

	•		The license period has begun and the customer can begin its exploitation, exhibition or sale;

	•		The seller’s price to the buyer is fixed and determinable; and

	•		Collectibility is reasonably assured.

In accordance with the terms of the TRV agreement, we recognize domestic television license revenues upon the receipt and acceptance of completed episodes. However, due to restrictions and practical limitations applicable to our operating relationships with foreign networks, we currently do not consider collectibility of international television license revenues to be reasonably assured, and accordingly, we do not recognize such revenue until the distributor has received payment. Additionally, we present international distribution license fee revenues net of the distributor’s fees, as the distributor is the primary obligor in the transaction with the ultimate customer pursuant to the Financial Accounting Standards Board (FASB) Emerging Issues Task Force (EITF) 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent.

Product licensing revenues are recognized when the underlying royalties from the sales of the related products are earned. We recognize minimum revenue guarantees ratably over the term of the license or as earned royalties based on actual sales of the related products, if greater. We present product licensing fees gross of licensing commissions, which are recorded as selling and administrative expenses as we are the primary obligor in the transaction with the ultimate customer pursuant to EITF 99-19.

Online gaming revenues are recognized monthly based on detailed statements received from WagerWorks, our online gaming partner, for online poker and casino activity throughout the previous month. In accordance with EITF 99-19, we present online gaming revenues gross of WagerWorks costs, including WagerWorks management fee, royalties, credit card processing and chargebacks that are recorded as cost of revenues, since we have the ability to adjust price and specifications of the online gaming site, we bear the majority of the credit risk and we are responsible for the sales and marketing of the gaming site.

Event hosting fees are paid by host casinos for the privilege of hosting the events and are recognized as the episodes that feature the host casino are aired, and sponsorship revenues are recognized as the episodes that feature the sponsor are aired. Licensing advances and guaranteed payments collected, but not yet earned, by us, as well as casino host fees and sponsorship receipts collected prior to the airing of episodes, are classified as deferred revenue in the accompanying balance sheets.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Deferred television costs: We account for deferred television costs in accordance to SOP No. 00-2. Deferred television costs include capitalizable direct costs, production overhead and development costs and are stated at the lower of cost or net realizable value based on anticipated revenue. We have not currently anticipated any revenues in excess of those subject to existing contractual relationships, since we have insufficient operating history to enable such anticipation. Accordingly, television costs related to the new PPT series will continue to be expensed as incurred until a licensing agreement has been executed or the Company has a firm commitment of revenue for the series. Marketing, distribution and general and administrative costs are expensed as incurred. Capitalized television production costs for each episode are expensed as revenues are recognized upon delivery and acceptance by the Travel Channel of the completed episode. Management currently estimates that 44% of capitalized deferred television costs at October 2, 2005, are expected to be expensed in connection with episode deliveries by the end of fiscal 2005.

Other assets: As of October 2, 2005, we had a nominal investment, consisting of a 15% ownership interest in (carried at cost), and a loan receivable from PokerTek, a company formed in August 2003 to develop and market the PokerPro system, an electronic poker table designed to provide a fully automated poker room environment, to tribal casinos, commercial casinos and card clubs. As a result of PokerTek’s public offering in October 2005, our ownership interest has been further diluted to 11.7% (See Note 6 to our condensed financial statements). The Company’s Chairman, Lyle Berman, along with his son Bradley Berman, who also sits on the Company’s Board of Directors, have personal investments in PokerTek and, as of October 2, 2005, hold a combined ownership of approximately 9% of PokerTek. Lyle Berman serves as Chairman of the Board of PokerTek and received options to purchase 200,000 shares of common stock in that company.

As discussed in Note 6 to our condensed financial statements, we will account for this investment as “available for sale” pursuant to SFAS 115, Accounting for Certain Investments in Debt and Equity Securities, and adjust the investment to fair market value beginning in the fourth quarter of 2005.

Income taxes: Prior to our conversion from World Poker Tour, LLC, to a C Corporation in July 2004, we were not a tax-paying entity for federal and state income tax purposes. The member’s allocable share of our taxable income (loss) was taxed on the member’s income tax returns. Therefore, no provision or liability for federal or state income taxes had been included in the financial statements. Upon conversion, we became liable for federal and state taxes on taxable income earned subsequent to the conversion.

We must assess the likelihood that deferred tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we must establish a valuation allowance. Our current growth plans potentially may include international expansion, primarily related to our online gaming business, expansion of our television and product licensing businesses, industry consolidation and acquisitions and entry into new branded gaming businesses. Although we anticipate that all potential strategies will be accretive to earnings, we are aware of the risks involved with an aggressive growth strategy. Therefore, based on the current level of uncertainty, combined with our cautious optimism, we believe a valuation allowance continues to be appropriate for deferred tax assets other than those recoverable through the filing of a carryback claim.

Common stock subject to repurchase: We inadvertently violated certain securities laws in connection with our initial public offering by sending out written e-mail communications to individuals that did not contain all of the information required to be in a prospectus. These violations could have required us to repurchase 75,200 shares sold in the offering, and these shares were classified on our balance sheet as of January 2, 2005, as common stock subject to repurchase. However, on August 9, 2005, our repurchase obligation to repurchase such shares expired, and accordingly, they were reclassified as permanent equity during the third quarter of 2005.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Stock-based compensation: We account for equity-based employee compensation under the recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees and related Interpretations. However, Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R) was issued in December 2004 and requires that compensation cost related to share-based employee compensation transactions be recognized in the financial statements. Share-based employee compensation transactions within the scope of SFAS No. 123R include stock options, restricted stock plans, performance-based awards, stock appreciation rights and employee share purchase plans. We have not completed our evaluation or determined the future impact of adopting SFAS No. 123R, which may be material to our results of operations when adopted no later than the first quarter of fiscal year 2006 and thereafter. See Note 4 to our condensed financial statements included under Item 1 of this Form 10-Q for more information about WPTE’s accounting for compensation expenses, including the pro-forma effects on the periods presented had we applied SFAS 123, Accounting for Stock-Based Compensation.

Other Recently Issued Accounting Pronouncements

Also in December 2004, the FASB issued Statement No. 153, Exchanges of Non-monetary Assets, an Amendment of APB Opinion No. 29, Accounting for Non-monetary Transactions. The amendments made by Statement No. 153 are based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. Further, the amendments eliminate the narrow exception in APB Opinion No. 29 for non-monetary exchanges of similar productive assets and replace it with a broader exception for exchanges of non-monetary assets that do not have commercial substance. The Statement is effective for non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. We do not presently expect to enter into any transactions that would be affected by adopting Statement No. 153.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and SFAS No. 3. SFAS No. 154 replaces APB Opinion No. 20, Accounting Changes and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements and changes the requirement for the accounting for and reporting of a change in accounting principles. SFAS No. 154 applies to all voluntary changes in accounting principles. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. The provisions of SFAS No. 154 will be effective for accounting changes made in the fiscal year beginning after December 15, 2005. We do not presently expect to enter into any accounting changes in the foreseeable future that would be affected by adopting SFAS No. 154 when it becomes effective.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

WPT ENTERPRISES, INC.
Management’s Discussion and Analysis of Financial Condition
and Results of Operations (Continued)

Private Securities Litigation Reform Act

The foregoing discussion and other statements in this report contain various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on the Company’s current expectations or beliefs concerning future events. These statements can be identified by the use of terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could,” “possible,” “plan,” “project,” “will,” “forecast” and similar words or expressions.

Forward looking information involves important risks and uncertainties that could significantly affect the Company’s anticipated future results and, accordingly, actual results may differ materially from those expressed in any forward-looking statement. The Company’s forward-looking statements generally relate to plans for future expansion and other business development activities, expected levels of capital spending, potential sources of future financing and the possible effects on the Company’s business of gaming, tax and other regulation and of competition. Although it is not possible to foresee all of the factors that may cause actual results to differ from the Company’s forward-looking statements, these factors include, among others, the following risk factors:

	•		We remain heavily reliant upon our agreements with TRV as a source of revenue and any termination or impairment of these agreements would materially and adversely affect the results of our operations;

	•		The termination or impairment of our relationships with key licensing and strategic partners could harm our business performance;

	•		Our television programming may fail to maintain a sufficient audience for a variety of reasons, many of which are beyond our control;

	•		Our ability to create and license our television programming profitably may be negatively affected by adverse trends that apply to the television production business generally;

	•		Our competitors (many of whom have greater financial resources or marketplace presence) may develop television programming that would directly compete with our television programming;

	•		A decline in general economic conditions or the popularity of our brand of televised poker tournaments may negatively impact our business;

	•		We may be unable to protect our entertainment concepts, our current and future brands and our other intellectual property rights;

	•		We may be unable to successfully expand into foreign markets or into new or complementary businesses;

	•		The regulatory environment for online gaming is currently uncertain, and despite out efforts to comply with applicable laws, we may be unable to pursue this business fully or our activities may be claimed or found to be in violation of applicable United States or foreign regulations; and

	•		The loss of our President and Chief Executive Officer or another member of our senior management team may negatively impact the success of our business.

Investors are cautioned that all forward-looking statements involve risks and uncertainties.

WPT ENTERPRISES, INC.
Quantitative and Qualitative Disclosures about Market Risk; Controls and Procedures

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our financial instruments include cash and cash equivalents, U.S. Treasury and Agency securities and short term municipal securities. Our main investment objectives are the preservation of investment capital and the maximization of after-tax returns on our investment portfolio. Consequently, we invest with only high-credit-quality issuers and limit the amount of credit exposure to any one issuer. We do not use derivative instruments for speculative or investment purposes.

Our cash and cash equivalents are not subject to significant interest rate risk due to the short maturities of these instruments. As of October 2, 2005, the carrying value of our cash and cash equivalents approximated fair value. We have in the past and may in the future obtain marketable debt securities (principally consisting of commercial paper, corporate bonds and government securities) having a weighted average duration of one year or less. Consequently, such securities would not be subject to significant interest rate risk.

ITEM 4. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) or Rule 15d – 15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this quarterly report. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that WPT Enterprises, Inc.’s disclosure controls and procedures are effective.

There have been no significant changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referenced above.

WPT ENTERPRISES, INC.

Part II
Other Information

ITEM 1. LEGAL PROCEEDINGS

On May 21, 2004, we filed a lawsuit against Reece Powers II, Janice Powers, R&J Partnership, Ltd. d/b/a Reece’s Las Vegas Supplies, Virgil Dale Rockwell and Does 1 through 50 in the U.S. District Court — Southern District of Ohio asserting that the defendants infringed upon our trademark rights in the marks WORLD POKER TOUR and WPT (and related logos) when they organized an unaffiliated poker tournament and advertised the tournament as a WPT satellite event. We obtained a stipulated permanent injunction against the defendants’ future use of our marks and are seeking to recover damages and legal costs associated with this matter.

On August 25, 2004, we filed a lawsuit against TVi Media, LLC, Passport International Productions of California and Does 1-10 in the U.S. District Court, Central District of California, asserting that defendants’ use of certain video footage infringed upon our copyrighted materials and that defendants engaged in unfair competition through the unauthorized use of our copyrighted materials and trademarks, and seeking damages and injunctive relief. As result of a settlement conference in April of this year, the parties entered into a global settlement agreement whereby defendants stipulated to a permanent injunction and the defendants agreed to be jointly and severally liable to us for One Hundred Eight Five Thousand Dollars ($185,000) in exchange for a dismissal of all claims, with prejudice, related to the matter. The judgment is secured by a Security Judgment in the amount of Two Hundred Fifty Thousand Dollars ($250,000) in the event defendants fail to make payment after proper notice is delivered by us. Thus far, defendants have been timely with payments and are current to date.

On March 21, 2005, a union election was held by the National Labor Relations Board resulting in the International Alliance of Theatrical State Employees and Movie Picture Technicians, Artists (IATSE) being the officially recognized collective bargaining agent for our television post production unit. Negotiations are ongoing between WPTE and IATSE. To date, this matter has not had a material adverse effect on the production process.

On September 19, 2005, we filed suit in the California Superior Court seeking to keep the Travel Channel from interfering with our prospective contractual relationship with third party networks in connection with the sale of the broadcast rights to the PPT, and to clarify and enforce our rights with respect to the WPT. Under our existing agreement with TRV for the World Poker Tour program (the WPT Agreements), TRV is afforded the right to negotiate exclusively with us with respect to certain types of programming developed by us during a sixty (60) day period. Pursuant to the WPT Agreements, we submitted the PPT to TRV and began negotiations but failed to reach an agreement with TRV within the allotted negotiation window. Consequently, we began discussions with other networks. While we later revived our attempts to reach a deal with TRV after TRV’s exclusive bargaining window had ended, we ultimately received an offer from ESPN. We submitted this offer to TRV pursuant to TRV’s contractual last right to match the deal as specified under the WPT Agreements. Thereafter, TRV sent letters to us and ESPN asserting, among other things, that we were not entitled to complete a deal for the PPT with a third party. Following TRV’s letters, we filed suit on September 19, 2005, alleging that TRV breached the WPT Agreements and interfered with our prospective contractual relationship with ESPN, and seeking a judicial declaration of our rights under the WPT Agreements to produce non-World Poker Tour branded programs covering poker tournaments. Subsequent to our filing, ESPN withdrew its offer to us to acquire the broadcast rights to the PPT. On September 22, 2005, TRV and Discovery Communications, Inc. filed an answer and cross-complaint and subsequently filed a motion for judgment on the pleadings and an “anti-SLAPP” motion, both of which were denied on November 10, 2005. Despite our dispute with TRV, we remain committed to fulfilling our obligations to TRV in connection with the World Poker Tour series.

We are not currently a party to any other material litigation, and are not aware of any threatened litigation, that would have a material adverse effect on our business.


		Page of
		Form 10-Q
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Balance Sheets as of October 2, 2005 (unaudited) and January 2, 2005		3

Condensed Statements of Loss for the three months ended October 2, 2005 and October 3, 2004 (unaudited)		4

Condensed Statements of Comprehensive Loss for the three months ended October 2, 2005 and October 3, 2004 (unaudited)		5

Condensed Statements of Earnings (Loss) for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)		6

Condensed Statements of Comprehensive Earnings (Loss) for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)		7

Condensed Statements of Stockholders’ Equity for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)		8

Condensed Statements of Cash Flows for the nine months ended October 2, 2005 and October 3, 2004 (unaudited)		9

Notes to Condensed Financial Statements (unaudited)		10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		14

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		23

ITEM 4. CONTROLS AND PROCEDURES		23

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS		24

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS		25

ITEM 6. EXHIBITS		25

SIGNATURES		26


	2005			2004
	(In thousands)
Net loss	$	(1,554	)	$	(468	)

Other comprehensive earnings (loss), net of tax:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) during the period		(37	)		3


Comprehensive loss	$	(1,591	)	$	(465	)


31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-15(e) and 15d-15(e) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	a.		designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to WPT Enterprises, Inc., including its subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

	b.		evaluated the effectiveness of WPT Enterprises, Inc.’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	c.		disclosed in this report any change in WPT Enterprises, Inc.’s internal control over financial reporting that occurred during WPT Enterprises, Inc.’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, WPT Enterprises, Inc.’s internal control over financial reporting;

	a.		all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect WPT Enterprises, Inc.’s ability to record, process, summarize and report financial information; and

	b.		any fraud, whether or not material, that involves management or other employees who have a significant role in WPT Enterprises, Inc.’s internal control over financial reporting.


Dated: November 15, 2005		WPT ENTERPRISES, INC.

		Registrant

		/s/ Steven Lipscomb

		Steven Lipscomb
		Chief Executive Officer

		/s/ W. Todd Steele

		W. Todd Steele
		Chief Financial Officer

1.		I have reviewed this quarterly report on Form 10-Q of WPT Enterprises, Inc.;

2.		Based on my knowledge, this quarterly report does not contain any untrue statements of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3.		Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.		WPT Enterprises, Inc.’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for WPT Enterprises, Inc., and have:


Date: November 15, 2005		/s/Steven Lipscomb
		Steven Lipscomb
		President and Chief Executive Officer


Date: November 15, 2005		/s/W. Todd Steele
		W. Todd Steele
		Chief Financial Officer