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Wiki	Wiki Summary
Minsk agreements	The Minsk agreements were a series of international agreements which sought to end the war in the Donbas region of Ukraine. The first, known as the Minsk Protocol, was drafted in 2014 by the Trilateral Contact Group on Ukraine, consisting of Ukraine, Russia, and the Organization for Security and Co-operation in Europe (OSCE), with mediation by the leaders of France and Germany in the so-called Normandy Format.
The Four Agreements	The Four Agreements: A Practical Guide to Personal Freedom is a self-help book by bestselling author Don Miguel Ruiz with Janet Mills. The book offers a code of conduct claiming to be based on ancient Toltec wisdom that advocates freedom from self-limiting beliefs that may cause suffering and limitation in a person's life.
Non-disclosure agreement	A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), secrecy agreement (SA), or non-disparagement agreement, is a legal contract or part of a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to. Doctor–patient confidentiality (physician–patient privilege), attorney–client privilege, priest–penitent privilege and bank–client confidentiality agreements are examples of NDAs, which are often not enshrined in a written contract between the parties.
Good Friday Agreement	The Good Friday Agreement (GFA), or Belfast Agreement (Irish: Comhaontú Aoine an Chéasta or Comhaontú Bhéal Feirste; Ulster-Scots: Guid Friday Greeance or Bilfawst Greeance), is a pair of agreements signed on 10 April 1998 that ended most of the violence of the Troubles, a political conflict in Northern Ireland that had ensued since the late 1960s. It was a major development in the Northern Ireland peace process of the 1990s.
Prenuptial agreement	A prenuptial agreement, antenuptial agreement, or premarital agreement (commonly referred to as a prenup), is a written contract entered into by a couple prior to marriage or a civil union that enables them to select and control many of the legal rights they acquire upon marrying, and what happens when their marriage eventually ends by death or divorce. Couples enter into a written prenuptial agreement to supersede many of the default marital laws that would otherwise apply in the event of divorce, such as the laws that govern the division of property, retirement benefits, savings, and the right to seek alimony (spousal support) with agreed-upon terms that provide certainty and clarify their marital rights.
Master service agreement	A master service agreement, sometimes known as a framework agreement, is a contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements.\nA master agreement delineates a schedule of lower-level service agreements, permitting the parties to quickly enact future transactions or agreements, negotiating only the points specific to the new transactions and relying on the provisions in the master agreement for common terms.
1991 Paris Peace Agreements	The Paris Peace Agreements (Khmer: សន្ធិសញ្ញាសន្តិភាពទីក្រុងប៉ារីស ឆ្នាំ១៩៩១; French: Accords de paix de Paris), formally titled Comprehensive Cambodian Peace Agreements, were signed on October 23, 1991, and marked the official end of the Cambodian–Vietnamese War and the Third Indochina War. The agreement led to the deployment of the first post-Cold War peace keeping mission (UNTAC) and the first ever occasion in which the UN took over as the government of a state.
Shareholders' agreement	A shareholders' agreement (sometimes referred to in the U.S. as a stockholders' agreement) (SHA) is an agreement amongst the shareholders or members of a company. In practical effect, it is analogous to a partnership agreement.
Marrakesh Agreement	The Marrakesh Agreement, manifested by the Marrakesh Declaration, was an agreement signed in Marrakesh, Morocco, by 123 nations on 15 April 1994, marking the culmination of the 8-year-long Uruguay Round and establishing the World Trade Organization, which officially came into being on 1 January 1995.The agreement developed out of the General Agreement on Tariffs and Trade (GATT), supplemented by a number of other agreements on issues including trade in services, sanitary and phytosanitary measures, trade-related aspects of intellectual property and technical barriers to trade. It also established a new, more efficient and legally binding means of dispute resolution.
Travel Channel	Travel Channel (stylized as Trvl Channel since 2018) is an American pay television channel owned by Warner Bros. Discovery, which had previously owned the channel from 1997 to 2007.
Samantha Brown	Samantha Elizabeth Brown (born March 31, 1970) is an American television host, notable for her work as the host of several Travel Channel shows including Girl Meets Hawaii, Great Vacation Homes, Great Hotels, Passport to Europe, Passport to Latin America, Great Weekends, Green Getaways, Passport to China, and Samantha Brown's Asia. As of 2012 Samantha Brown has made her own travel luggage called Samantha Brown: Travel America.
Travel Man	Travel Man is a British television travel documentary series, presented by Richard Ayoade and Joe Lycett, and produced by North One Television for Channel 4. It can be found on Australian TV on SBS or SBS On Demand.
Discovery, Inc.	Discovery, Inc. was an American multinational mass media factual television conglomerate based in New York City.
Don Wildman	Don Wildman is the current host and narrator of Mysteries at the Museum, Beyond the Unknown, Dark Tales with Don Wildman, and Buried Worlds with Don Wildman on the Travel Channel. \nHe also hosted and narrated Travel Channel's Weird Travels, Off Limits, and Monumental Mysteries.
List of Travel Channel original programming	This is a list of programs currently or previously broadcast by Travel Channel, an American cable television network devoted to travel; Discovery, Inc. serves as the majority owner and owns a 65% stake in the network, with cable television provider Cox Communications owning the remaining 35%.
Discovery Channel	Discovery Channel (known as The Discovery Channel from 1985 to 1995, and often referred to as simply Discovery) is an American cable channel owned by Warner Bros. Discovery, a publicly traded company run by CEO David Zaslav.
Arithmetic	Arithmetic (from Ancient Greek ἀριθμός (arithmós) 'number', and τική [τέχνη] (tikḗ [tékhnē]) 'art, craft') is an elementary part of mathematics that consists of the study of the properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and extraction of roots. In the 19th century, Italian mathematician Giuseppe Peano formalized arithmetic with his Peano axioms, which are highly important to the field of mathematical logic today.
Bitwise operation	In computer programming, a bitwise operation operates on a bit string, a bit array or a binary numeral (considered as a bit string) at the level of its individual bits. It is a fast and simple action, basic to the higher-level arithmetic operations and directly supported by the processor.
Special Activities Center	The Special Activities Center (SAC) is a division of the Central Intelligence Agency responsible for covert operations and paramilitary operations. The unit was named Special Activities Division (SAD) prior to 2015.
Operations management	Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in meeting customer requirements.
Emergency operations center	An emergency operations center (EOC) is a central command and control facility responsible for carrying out the principles of emergency preparedness and emergency management, or disaster management functions at a strategic level during an emergency, and ensuring the continuity of operation of a company, political subdivision or other organization.\nAn EOC is responsible for strategic direction and operational decisions and does not normally directly control field assets, instead leaving tactical decisions to lower commands.
Operations research	Operations research (British English: operational research), often shortened to the initialism OR, is a discipline that deals with the development and application of advanced analytical methods to improve decision-making. It is sometimes considered to be a subfield of mathematical sciences.
Surgery	Surgery is a medical or dental specialty that uses operative manual and instrumental techniques on a person to investigate or treat a pathological condition such as a disease or injury, to help improve bodily function, appearance, or to repair unwanted ruptured areas.\nThe act of performing surgery may be called a surgical procedure, operation, or simply "surgery".
Operation (mathematics)	In mathematics, an operation is a function which takes zero or more input values (called operands) to a well-defined output value. The number of operands (also known as arguments) is the arity of the operation.
Television show	A television show – or simply TV show – is any content produced for viewing on a television set which can be broadcast via over-the-air, satellite, or cable, excluding breaking news, advertisements, or trailers that are typically placed between shows. Television shows are most often scheduled for broadcast well ahead of time and appear on electronic guides or other TV listings, but streaming services often make them available for viewing anytime.
Common stock dividend	A common stock dividend is the dividend paid to common stock owners from the profits of the company. Like other dividends, the payout is in the form of either cash or stock.
Preferred stock	Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior (i.e., higher ranking) to common stock but subordinate to bonds in terms of claim (or rights to their share of the assets of the company, given that such assets are payable to the returnee stock bond) and may have priority over common stock (ordinary shares) in the payment of dividends and upon liquidation.
Matthiola incana	Matthiola incana is a species of flowering plant in the cabbage family Brassicaceae. Common names include Brompton stock, common stock, hoary stock, ten-week stock, and gilly-flower.
Consolidation (business)	In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.
Stock market	A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.
New York Stock Exchange	The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its listed companies at US$30.1 trillion as of February 2018.
Treasury stock	A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings). \nStock repurchases are used as a tax efficient method to put cash into shareholders' hands, rather than paying dividends, in jurisdictions that treat capital gains more favorably.
Convertible bond	In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features.
Reality television	Reality television is a genre of television programming that documents purportedly unscripted real-life situations, often starring unfamiliar people rather than professional actors. Reality television emerged as a distinct genre in the early 1990s with shows such as The Real World, then achieved prominence in the early 2000s with the success of the series Survivor, Idols, and Big Brother, all of which became global franchises.

Risk Factors
WPT ENTERPRISES INC Item 1A Risk Factors In addition to factors discussed elsewhere in this Annual Report on Form 10-K, the following are important factors that could cause actual results or events to differ materially from those contained in any forward-looking statement made by us or on our behalf
Risks Related to Our Business The revenues we receive under our agreements with the Travel Channel and Discovery Communications have been and continue to be our most significant source of revenue; the termination or impairment of these agreements would materially and adversely affect our results of operations
Under our agreements with the Travel Channel, LLC, we have granted the Travel Channel exclusive licenses to exhibit our WPT Seasons One through Four programming on television in the US and options to acquire similar licenses for the episodes comprising each of Seasons Five through Seven, which is expected to be completed in 2009
Our agreement with Discovery Communications, Inc, the Travel Channel’s parent company, granted the Travel Channel a license to air Season One of the PPT and options to acquire similar licenses for Seasons Two through Four
Because the license fees we receive from the Travel Channel have been and will continue to be our most significant source of revenue, comprising approximately 61prca of our total historical revenues, our failure to maintain or replace our agreements with the Travel Channel with comparable license agreements prior to the material growth of other revenue streams would have a material adverse effect on our financial condition and our results of operations and cash flow
Even following the growth of other revenue streams, our failure to maintain our license agreements with the Travel Channel would be detrimental to the viability of the World Poker Tour and PPT brands and, consequently, would have a material adverse effect on our business, prospects, financial condition, results of operations, cash flow and, ultimately, the price of our common stock
Our agreements with the Travel Channel grant rights to the Travel Channel that could impact the value of our World Poker Tour and Professional Poker Tour brands and place some limits on our growth
While we believe our agreements with the Travel Channel are favorable for us, the agreements grant the Travel Channel certain rights that could impact the value our World Poker Tour and Professional Poker Tour brands and place some limits on our growth
For example: • The Travel Channel has options to obtain exclusive US telecast rights to the World Poker Tour television series through Season Seven, which will not be completed until 2009, and options for the Professional Poker Tour through Season Four, which will not be completed before 2010
• If we elect to discontinue organizing tour stops under the WPT or PPT name, the Travel Channel will have a right of first negotiation and last refusal to acquire all of our rights to continue such activities
This right of first negotiation and last refusal may hinder our ability to negotiate with other parties who may be interested in purchasing these rights and, as a result, could negatively impact the consideration we may receive upon any attempt by us to exercise these rights
• If the Travel Channel exercises its options for Seasons Five through Seven of the WPT, and provided that the Travel Channel is not in material breach of the agreement, the Travel Channel will have an exclusive right of first negotiation and last refusal with respect to the development and/or production of any additional programs covering or presenting WPT tournaments, and similar rights with respect to the PPT • The license fees we receive under our agreements with the Travel Channel increase at a prescribed rate for each new season of the WPT and remain fixed for each new season of the PPT As a result, obtaining high ratings will not increase the amount of telecast license fees we will receive from the Travel Channel during the terms of the agreements
• While we have retained worldwide television rights to telecast WPT and PPT episodes outside the US and the right to pursue other business activities related to the WPT and PPT events and brands, the Travel Channel has the right to receive 15prca of our adjusted gross revenues from all DVD and home video sales, merchandising and publishing activities and international television licenses
18 _________________________________________________________________ [70]Table of Contents • Our agreements with the Travel Channel permit us to increase the number of televised seasonal tour stops on the WPT up to 17, but such increase is subject to the Travel Channel’s approval of the tournament venue in certain instances
• As is customary in most production agreements with television networks, the Travel Channel retains final edit rights over the WPT and PPT programs that we produce
If the Travel Channel exercises these rights in a manner that diminishes the quality of our programs or negatively affects relationships that are important to our programming, including those with the casinos hosting the poker tournaments at which we film our shows, its actions could have a material adverse effect on our business, prospects, financial condition, results of operations or cash flow and, ultimately, the price of our common stock
• In the event we secure a naming rights sponsorship for the WPT television series, we are required to remit to the Travel Channel 10prca of the season-over-season increases in the adjusted gross revenue we receive from the sponsor for these naming rights
• We are permitted to incorporate an entitlement sponsorship into the WPT televised episodes as long as the Travel Channel reasonably consents to the sponsor and the sponsor purchases a minimum amount of advertising from the Travel Channel
We do not share in any advertising revenue paid to the Travel Channel from our sponsors
We granted the Travel Channel an exclusive right to sell audio-visual sponsorships, other than naming rights, to be integrated into our programming, and we have agreed to cooperate with the Travel Channel in order to accomplish this integration
We are not entitled to share in the Travel Channel’s proceeds from such sponsorship sales
• We are not permitted to incorporate any sponsorship elements into the PPT television series without the Travel Channel’s mutual consent
• With respect to both the WPT and PPT television series, we are subject to holdback provisions that extend beyond the license period for each season
These holdback periods may impact our ability to resell this programming into secondary markets in the US or the timing of such sales
Our success depends on our current brand and any future brands we may develop, and if the value of our brands were to diminish, our business would be adversely affected
Our success depends on our current WPT brand, which consists of a portfolio of trademarks, service marks and copyrighted materials, and the development of other brands, such as the PPT Our portfolio includes, but is not limited to, existing and future episodes of the televised programming produced in connection with our existing and future brands and certain elements of these episodes, trade names and other intellectual property rights and any future brands we develop
In connection with our branding and licensing operations, we have entered into an agreement with Brandgenuity LLC to seek licensing opportunities for the WPT brand
While specific contractual provisions require that the licensees brought to us by Brandgenuity maintain the quality of our brands, we cannot be certain that our licensees or their manufacturers and distributors will honor their contractual obligations or that they will not take other actions that will diminish the value of our brand prior to our ability to detect and prevent any such actions
There is a risk that we may not be able to protect the format of our episodes, our current and future brands and our other proprietary rights
We are susceptible to others imitating our television show format and other products and infringing on our intellectual property rights
We currently believe that several competitive poker-related television programs use exhibition methods and technology that might infringe on one or more claims of our pending patent applications
We have issued letters to the producers of these programs, notifying them that we have intellectual property rights in such technology, and that we intend to vigorously enforce such rights in order to protect our proprietary processes
These and other producers of poker-related programming may be well established and may have significantly greater resources than we do
Litigation may be necessary to enforce our intellectual property rights and to determine the validity and scope of our proprietary rights
Any litigation could result in substantial expense, may reduce our profits and may not adequately protect our intellectual property rights upon which we are substantially 19 _________________________________________________________________ [71]Table of Contents dependent
In addition, the laws of certain foreign countries do not always protect intellectual property rights to the same extent as the laws of the US Imitation of our television show formats and other products or infringement of our intellectual property rights could diminish the value of our brands or otherwise adversely affect our revenues
Any litigation or claims against us based upon our intellectual property or other third party rights, whether or not successful, could result in substantial costs and harm our reputation
In addition, such litigation or claims could force us to do one or more of the following: to cease exploitation of our television series and related products or portions thereof that violate the potentially infringed third party rights or intellectual property, which would adversely affect our revenue; to negotiate a license from the holder of the intellectual property or other right alleged to have been infringed, which license may not be available on reasonable terms, if at all; or to modify our television series and related products or portions thereof to avoid infringing the intellectual property or other rights of a third party, which may be costly and time-consuming or impossible to accomplish
Early termination of our agreements with member casinos or violation by member casinos of the restrictive covenants contained in these agreements could negatively affect the size of telecast audiences and lead to declines in the performance of all of our other lines of business
We have entered into written agreements with all of the member casinos that host the World Poker Tour and Professional Poker Tour tour stops except Aviation Club de France, located in Paris, France, which currently participates as a tour stop under an unwritten arrangement
The WPT agreements were originally for a term of five years and, although some member casinos have a bilateral option, most of the agreements provided us with a unilateral option to renew on the same terms for another five years
In September 2004, we exercised our right to renew most of these agreements
However, in each year after its first year of participation, the member casino may elect to withdraw its tournament from the World Poker Tour lineup and terminate the agreement by giving us notice by a specified date or, if earlier, a specified length of time before the date of the tournament, which is generally four to six months
While the agreement is in effect and for varying periods of time thereafter, the member casino is prohibited from televising the tournament itself, permitting any third party to televise the tournament or licensing its name, trademarks or likeness to any other party in conjunction with the telecast of a poker tournament
If a significant number of these casinos were to terminate the agreements and/or allow a competing company to telecast their tournaments in violation of these restrictions or after their expiration for the restricted time period, this could result in a decline in our future telecast audiences, which in turn would lead to declines in the performance and success of our other lines of business
For the first season of the PPT, each member casino signed an agreement covering only one event
We anticipate executing new agreements with each member casino that participates in subsequent seasons of the Professional Poker Tour
To date, four member casinos that have hosted World Poker Tour tour stops have chosen to no longer participate as hosts of World Poker Tour events
We have subsequently replaced each of these venues with additional tour stops, and do not believe that their withdrawal has had a significant impact on the quality of the Tour or on our business
Termination or impairment of our relationships with key licensing and strategic partners could adversely affect our revenues and results of operations
We have developed relationships with key strategic partners in many areas of our business, including poker tournament event sponsorship, merchandise licensing, corporate sponsorship, Internet gaming development and international distribution
We hope to derive significant income from our licensing arrangements, and our agreements with our strategic partners are vital to finding these licensing arrangements
If we were to fail to manage our existing licensing relationships, this failure could have a material adverse effect on our financial condition and results of operations
We would also be materially adversely affected if we were to lose our rights under any of our other key contracts or if the counterparty to any of these contracts were to breach its obligations to us
These agreements include: • our agreement with Brandgenuity LLC, pursuant to which it negotiates third party consumer product licensing agreements; 20 _________________________________________________________________ [72]Table of Contents • our agreements with Alfred Haber Distribution, Inc, pursuant to which it identifies potential licensees and negotiates licenses to telecast the World Poker Tour and Professional Poker Tour television programs on television networks outside of the US; and • our agreement with WagerWorks, pursuant to which WagerWorks operates and manages our WPT-branded real-money gaming website, WPTonline
The website is designed not to accept bets from players in the US and other restricted jurisdictions
Players in these jurisdictions may play on a play-for-free version of WPTonline
If our relationship with any of these or certain other third parties were to be interrupted, or the services provided by any of these third parties were to be delayed or deteriorate for any reason without being adequately replaced, our business could be materially adversely affected
If we are forced to find a replacement for any of these strategic partners, this could create disruption in our business and may result in reduced revenues, increased costs or diversion of management’s attention and resources
In addition, while we have significant control over our licensed products and advertising, we do not have operational and financial control over these third parties, and we have limited influence with respect to the manner in which they conduct their businesses
If any of these strategic partners experiences a significant downturn in its business or were otherwise unable to honor its obligations to us, our business could be materially disrupted
We are currently evaluating the impact of changing our online gaming service provider from WagerWorks to another strategic partner
We cannot be assured that we will find a suitable replacement to WagerWorks or that a transition to such a replacement would not result in a material adverse impact to our online gaming business
The loss of the services of Steven Lipscomb or other key employees or on-air talent or our failure to attract key individuals would materially and adversely affect our business
We are highly dependent on the services of Steven Lipscomb, who is the creator and Executive Producer of the World Poker Tour and Professional Poker Tour television series and currently serves as our President and Chief Executive Officer
Lipscomb’s services in connection with our television series is required under our agreements with the Travel Channel
Although we have entered into an employment agreement with Mr
Lipscomb governing his employment through December 29, 2006, Mr
Lipscomb may elect to decrease the level of his involvement with us or terminate his employment altogether prior to the expiration of this term
A voluntary or involuntary termination of Mr
Lipscomb’s employment would result in a breach of our agreements with the Travel Channel and would have a material adverse effect on our business operations and negatively impact the market price of our common stock
Our continued success is also dependent upon retention of other key management executives who have been instrumental in our success thus far and upon our ability to attract and retain employees and on-air talent to implement our corporate development strategy and our branding and licensing efforts
The loss of some of our senior executives, or an inability to attract or retain other key individuals, could materially adversely affect us
Growth in our business is dependent, to a large degree, on our ability to retain and attract such employees
We seek to compensate and provide incentives to our key executives, as well as other employees, through competitive salaries, stock ownership and bonus plans, but we can make no assurance that these programs will allow us to retain key employees or hire new employees
In addition, our future success may also be affected by the potential need to replace our key on-air talent at an inopportune time, such as midway through the tapings of a season of the WPT or PPT television programs
We will face a variety of risks as we expand into new or complementary businesses in the future
Our core operations have consisted of marketing, promoting and licensing our televised entertainment, selling, or licensing the right to manufacture and sell, our branded merchandise and the marketing and promotion of our WPT-branded real-money gaming website, WPTonline
Our current strategic objectives include not only further development and enhancement of our existing business but also the entry into new or complementary businesses, such as expansion of our current business operations into international markets and the development of poker-related educational content
We are also exploring other opportunities to leverage the World Poker Tour 21 _________________________________________________________________ [73]Table of Contents brand, including the potential development of additional television programming and radio programming, book and magazine publishing, creating feature length films for television or theatrical release and launching a television network
The following risks associated with expanding into new or complementary businesses by investment, licensing, acquisition, strategic alliance, co-production or other arrangements could have a material adverse effect on our business, operating results and financial condition and the price of our common stock: • potential diversion of management’s attention and resources from our existing business and an inability to recruit or develop the necessary management resources to manage new businesses; • unanticipated liabilities or contingencies from new or complementary businesses or ventures; • potential operating losses from new business ventures; • reduced earnings due to potential impairment charges, increased interest costs and additional costs related to the integration of acquisitions; • potential reallocations of resources due to the growing complexity of our business and strategy; • competition from companies engaged in the new or complementary businesses that we are entering; • possible additional regulatory requirements and compliance costs; • dilution of our stockholders’ percentage ownership or an increase of our leverage when issuing equity or convertible debt securities or incurring debt; and • potential unavailability on acceptable terms, or at all, of additional financing necessary for expansion
Our further expansion into foreign markets will subject us to additional business risks
We intend to further expand our business in foreign markets, including continued international distribution of our US telecasts, creating additional poker tours in foreign countries, distributing branded merchandise in foreign countries and pursuing Internet gaming ventures in international markets
Our international operations could be adversely affected by changes in political and economic conditions, trade protection measures and the status of regulatory requirements that may restrict the sales of our products, increase costs of foreign production or other costs or prohibit Internet gaming activities in international jurisdictions
Also, changes in exchange rates between the US dollar and other currencies could potentially result in significant increases or decreases in our costs and earnings
is our majority shareholder and is able to effectively control our management and operations
Lakes Entertainment, Inc
through its wholly owned subsidiary, Lakes Poker Tour, LLC, owns 12cmam480cmam000 shares of our outstanding common stock, representing approximately 62prca of our voting power
Lakes Entertainment, together with our directors and executive officers, beneficially owns approximately 14cmam823cmam332 shares of our common stock, which represents approximately 74prca of our voting power
As a result, Lakes Entertainment, either alone or together with our directors and executive officers, controls the outcome of all matters requiring stockholder approval, including the future merger, consolidation or sale of all or substantially all of our assets
Therefore, Lakes Entertainment indirectly controls our management through the election and removal of members of the Board of Directors
This concentrated control could discourage others from initiating any potential merger, takeover or other change of control transaction that may otherwise be beneficial to our stockholders
As a result, the return on your investment in our common stock through the market price of our common stock or ultimate sale of our business could be adversely affected
may make sales of our common stock into the market that could depress the price of our common stock
has announced that they are evaluating strategic options including, but not limited to, the sale of some or all of their shares of our common stock
The outcome of this evaluation cannot be reasonably foreseen, and we cannot predict the impact it may have on the market price of our common stock or on our business
Additionally, in December 2005, we entered into an agreement with Lakes Entertainment under which we agreed to register the shares of our common stock owned by Lakes Entertainment
In February 2006, Lakes Entertainment pledged all of such shares to its lender as collateral for a loan
We agreed that the registration statement covering the resale of such shares would include sales by the lender in the event of foreclosure
Under its agreements with its 22 _________________________________________________________________ [74]Table of Contents lender, Lakes Entertainment is permitted to make sales of shares of our common stock, subject to certain limitations
If Lakes Entertainment makes significant sales of our common stock, or if Lakes Entertainment defaults on the loan and the lender makes significant sales of our common stock, these sales could adversely affect the market price of our common stock or increase the volatility of the market price
Our Board of Directors’ ability to issue undesignated preferred stock and the existence of anti-takeover provisions may depress the value of our common stock
Our authorized capital includes 20 million shares of undesignated preferred stock
Our board of directors has the power to issue any or all of the shares of preferred stock, including the authority to establish one or more series and to fix the powers, preferences, rights and limitations of such class or series, without seeking stockholder approval, subject to certain limitations on this power under Nasdaq listing requirements
Further, as a Delaware corporation, we are subject to provisions of the Delaware General Corporation Law regarding “business combinations
” We may, in the future, consider adopting additional anti-takeover measures
The authority of our board to issue undesignated stock and the anti-takeover provisions of Delaware law, as well as any future anti-takeover measures adopted by us, may, in certain circumstances, delay, deter or prevent takeover attempts and other changes in control of the company not approved by our Board of Directors
As a result, our stockholders may lose opportunities to dispose of their shares at favorable prices generally available in takeover attempts or that may be available under a merger proposal and the market price, voting and other rights of the holders of common stock may also be affected
Risks Related to Our Industry Our television programming may be unable to maintain a sufficient audience for a variety of reasons, many of which are beyond our control
Television production is a speculative business because revenues and income derived from television depend primarily upon the continued acceptance of that programming by the public, which is difficult to predict
Public acceptance of particular programming is dependent upon, among other things, the quality of the programming, the strength of networks on which the programming is telecast, the promotion and scheduling of the programming and the quality and acceptance of competing television programming and other sources of entertainment and information
Popularity of programming can also be negatively impacted by excessive telecasting of the programming beyond viewers’ saturation thresholds
The World Poker Tour television series, while still the highest-rated show on the Travel Channel, has had decreased Nielsen ratings in the past year in part due to an increasing number of competing poker-related shows
If the World Poker Tour television series is unable to maintain high ratings throughout the term of the Travel Channel agreement, or if the Professional Poker Tour fails to build a significant audience, the Travel Channel may elect not to exercise its options for additional episodes and seasons, in which event we may be unable to negotiate US telecast license agreements on terms that are favorable, or at all
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
Television revenues and income may be affected by a number of factors, many of which are not within our control
These factors include a general decline in television viewers, pricing pressure in the television advertising industry, strength of the stations on which our programming is telecast, general economic conditions, increases in production costs and availability of other forms of entertainment and leisure time activities
All of these factors, as well as others, may quickly change and these changes cannot be predicted with certainty
Our future licensing opportunities may also be adversely affected by these changes
Accordingly, if any of these changes were to occur, the revenues and income we generate from television programming could decline
A decline in general economic conditions or the popularity of our brand of televised poker tournaments could adversely impact our business
Because our operations are affected by general economic conditions and consumer tastes, our future success is unpredictable
The demand for entertainment and leisure activities tends to be highly sensitive to consumers’ disposable incomes and thus a decline in general economic conditions could, in turn, have a material adverse effect on our business, 23 _________________________________________________________________ [75]Table of Contents operating results and financial condition and the price of our common stock
An economic decline could also adversely affect our corporate sponsorship business, sales of our branded merchandise and other aspects of our business
The continued popularity of our type of entertainment is vital in maintaining the ability to leverage our brand and develop products or services that appeal to our target audiences, which, in turn, is important to our long-term results of operations
Public tastes are unpredictable and subject to change and may be affected by changes in the country’s political and social climate
A change in public opinion could have a material adverse effect on our business, operating results and financial condition and, ultimately, the price of our common stock
The political or social climate regarding gaming and poker could negatively impact our ability to negotiate future telecast license arrangements, retain certain of our member casinos or pursue Internet gaming ventures as a potential source of future revenue
Although the popularity of poker, in particular, and gaming, in general, has recently been growing in the US and abroad, gaming has historically experienced backlash from various constituencies and communities
Currently, the legal status of Internet-based casinos and cardrooms is unclear under US law and under the laws of other countries
Based on the uncertain regulatory environment surrounding the marketing and promotion of Internet-based casinos and cardrooms to viewers in the US, the Travel Channel, which has final edit rights to the shows that it telecasts, has indicated it will likely not display the “dot com” names or logos of Internet-based casinos and cardrooms in its telecasts, although it has expressed a willingness to display names and logos from strictly play-for-free “dot net” websites from our member casinos
Of the three Internet cardrooms that have been World Poker Tour member casinos, two have recently terminated their agreements with us to be member casinos, and the third has indicated that it may terminate its agreement with us
Those withdrawals forced us to seek tournaments to replace those hosted by those online cardrooms with other events
Although we were able to secure other tournaments to replace the tournaments held by the withdrawing members, we may be unable to replace other tournaments, if other member casinos terminate their agreements with us without adversely impacting our production schedule
If our production schedule is impacted, it could have an adverse effect on our operating results during the applicable season
US federal prosecutors have contended that online gambling sites are illegal, and the US government has been trying to curb the activities of offshore Internet casinos by investigating and pressuring American companies that provide services to these sites on the theory that they are aiding and abetting the operations
As part of these activities, US marshals seized funds from the Travel Channel’s parent company, Discovery Communications, Inc, that initially belonged to a Costa Rica-based Internet casino operation that paid Discovery Communications for television spots to advertise an online poker room
This focus on Internet gambling sites may eliminate these sites as sources of advertising revenue for television networks that exhibit poker-related programming, thereby potentially impacting the value of such programming to these networks
If this occurs, it may negatively affect our ability to negotiate future telecast license arrangements on terms that are most advantageous to us
Government regulation of online gaming in foreign countries may restrict the activities or affect the financial results of our online venture that is under development
On February 3, 2005, we finalized an agreement with a subsidiary of WagerWorks, Inc
com, officially launched on June 29, 2005
com does not accept bets from players in the US and other restricted jurisdictions
Players in these jurisdictions may play on a play-for-free version of WPTonline
The website is hosted from Alderney, one of the United Kingdom’s Channel Islands
While the website is licensed by the Alderney Gambling Control Commission, and while we believe that WagerWorks is in compliance with all international Internet gaming regulations, we cannot be certain that WagerWorks will be allowed to accept wagers in all the markets we plan to enter
Pursuant to our agreement with WagerWorks, we are reliant on the revenues derived from the license of rights to WagerWorks
We are also reliant on WagerWorks for compliance with all applicable regulations, including ongoing verification that improper wagers are not placed on WPTonline
If WagerWorks’ compliance or verification is inadequate, regulators in the US or other jurisdictions may impose fines or other sanctions or threaten or take other actions that could adversely affect our reputation and the revenues we derive from the license of rights to WagerWorks
We continue to monitor the legality of Internet gaming in domestic and international jurisdictions, but cannot be certain 24 _________________________________________________________________ [76]Table of Contents that changes in existing regulations will be beneficial to the online gaming market
Additionally, we expect that on-air promotion of WPTonline
com via international World Poker Tour television telecasts will continue to be a primary marketing tool for driving poker players to the site
However, certain territories and foreign networks may restrict us from incorporating marketing elements related to our online site into our international telecasts and certain laws or regulations may restrict the type of advertising in general in those territories
If these restrictions occur, our costs of customer acquisition may be substantially higher than anticipated
Internet gaming is a relatively new industry and, therefore, we do not know if the market will continue to develop and our products and services to be offered through our online gaming website, WPTonline
Internet gaming is a relatively new industry that continues to rapidly evolve and is characterized by an increasing number of market entrants
Our online gaming website, WPTonline
com, is still in its initial stages of developing a player base
If the Internet gaming market becomes saturated with competitors, or if our products and services to be offered through our online gaming website do not achieve market acceptance, we could incur losses in connection with our investment in our online venture with WagerWorks and our future business, operating results and financial condition could be adversely affected
Our quarterly results may fluctuate, causing fluctuation of our stock price that may negatively affect the value of our common stock
Under our license agreements for the WPT and PPT, the Travel Channel pays us for each episode upon delivery
Therefore, our quarterly revenue can fluctuate significantly depending on the number of episodes delivered in any one quarter
In addition, the sales of consumer products that utilize our licensed intellectual property vary greatly, due to holiday seasons, school schedules, season changes and other outside factors
As a result, our financial results can be expected to fluctuate significantly from quarter to quarter, leading to volatility and a possible adverse effect on the market price of our common stock
The television entertainment market in which we operate is highly competitive and competitors with greater financial resources or marketplace presence may enter our markets to our detriment
We compete with other poker-related television programming, including ESPN’s coverage of the World Series of Poker, Fox Sports Net’s exhibition of the Late Night Poker television show, NBC’s exhibition of the NBC National Heads-Up Poker Championship and Bravo’s exhibition of the Celebrity Poker Showdown, among others
These and other producers of poker-related programming may be well established and may have significantly greater resources than we do
Based on the popularity of these poker-related televised programs, we believe that additional competing televised poker programs may currently be in development or may be developed in the future
Our programming also competes for telecast audiences and advertising revenue with telecasts of mainstream professional and amateur sports, as well as other entertainment and leisure activities
These competing programs and activities and brands that may result therefrom may decrease the popularity of the World Poker Tour or Professional Poker Tour series and dilute our brands
This would adversely affect our operating results and financial condition and, ultimately, the price of our common stock
The online gaming market in which we operate is highly competitive and competition with greater financial resources or marketplace presence may make it difficult for our online gaming venture to gain any market share
Our online gaming website, WPTonline
com, faces competition from several larger, more experienced and established online gaming websites, including PartyPoker
com, a website that tracks the number of players in online poker rooms, to maintain over a 50prca market share in the global poker market, PokerStars
These and other competitors have significant marketing and operational experience advantages over us
In addition, the US Department of Justice believes online gaming is illegal in the US Our competitors accept bets from players in the US, where the bulk of the world’s poker players are located, which gives these competitors a significant advantage since WPTonline
com does not permit bets from US players
If we are not able to compete successfully with these other operators and build market share, it would adversely affect our operating results and financial condition and, ultimately, the price of our common stock