WPT Enterprises ( WPTE) reinvented televised poker when it created the popular World Poker Tour show, which debuted on the Travel Channel in 2003. Now, if the company is successful in revitalizing its struggling online poker gambling site, the stock could see significant earnings growth.

Early next year, WPT will launch a new version of its online site, which has been plagued in recent years by shoddy technology that led to frequent crashes.

The company recently purchased software to build a fresh site and take a stab at being a big player in the $13 billion worldwide online gambling business.

With the stock off more than 70% from its 52-week high last year, it could be a nice entry point for investors willing to bet on the future growth story.

Currently, online gaming represents less than 10% of WPT's revenue; the rest is tied to television and licensing deals. The existing gambling site gathers a little less than $1 million a quarter in revenue. That's peanuts compared with the $245 million per quarter captured at PartyPoker.com, the world's largest online poker room, owned by Gibraltar-based PartyGaming.

Under it new model, WPT has taken over the operations of its site, which it previously outsourced, and purchased a software program from CyberArts to build a new "state-of-the-art poker platform." CyberArts provided the technology for the poker site Mansion.com.

"They were never going to make a ton of money producing World Poker Tour shows and selling those," says Clinton Morrison, an analyst with Feltl & Co. "That was really an effort to establish a presence in a valuable brand. The place to really leverage that brand is in the online market."

One issue WPT faces with its new online site is that the company will not accept bets from U.S. gamblers because of the murky legality. The U.S. Justice Department has said that online gambling is illegal in the U.S. Some companies dispute this notion, but WPT isn't taking any chances. Neither is Playboy ( PLA), which recently announced it would launch an online gambling room but not allow U.S.-based play.

Estimates from analysts and online gambling companies say about 50% of online gaming bets come from U.S. consumers.

Thus, in essence, WPT's new Web site is missing out on half of the total market. But if the company can get just a small piece of that market, the growth could be impressive, proponents of the stock say.

Last year, the online gaming market made $13 billion, according to Global Betting and Gaming Consultants. Assuming half of that originates from the U.S., that leaves about $6.5 billion that WPT could capture.

"Everyone believes that the biggest growth opportunities are in the international market," says Steve Lipscomb, founder and CEO of WPT Enterprises. "The market is very ripe for branded sites to have a significant piece of the market."

And of course, the World Poker Tour is considered by most to be among the top poker brands, along with the World Series of Poker, which is owned by Harrah's ( HET).

Backing up the power of the international market are data from PartyPoker.com. PartyGaming said in a recent investor presentation that in late 2004, 92% of new customer signups came from the U.S. At the end of 2005, that number dropped to 68%, as a larger percentage of gamblers came from Scandinavia, the U.K., other parts of Europe and Canada.

Latin America and South America, which aren't even represented in the PartyGaming report, remain largely untapped markets, Lipscomb says.

And even though the U.S. Justice Department remains opposed to letting this country's citizens gamble on the Internet, the rest of the world has proved to be more accepting.

If WPT were to penetrate 5% of the non-U.S. market, that would equate to about $325 million in revenue at a roughly 40% to 50% margin, says Steven Gart, an analyst with Nickel Capital, a hedge fund that recently purchased the stock. Last year, WPT's total revenue was $18 million.

"With an enterprise value in the $35 million to $40 million range, we just find the upside too strong not to bet WPT," Gart says.

The other factor that provides Gart comfort is that the stock trades at around $3.70, but the cash on the company's books amounts to a little less than $2 per share. In addition, WPT has no debt.

Part of the reason WPT's stock has fallen so much is that the company has issued disappointing guidance. In addition, investors have been fearing that poker's popularity is just a fad and set to slow.

There's been some debate as to whether the World Poker Tour television show's popularity is falling. From early 2003 through June 2005, it pulled in an average 567,000 viewers per episode, according to Nielsen Media Research. That number has dropped to an average of 459,000 since then.

However, the recent record number of entries at the World Series of Poker in Las Vegas is a sign that the game remains very popular.

With the World Poker Tour show now televised in 154 countries, WPT hopes that the boom is set to spread globally. If it does, WPT could be a nice way to capture that growth.