The last time we talked about WPT Enterprises (NASDAQ:WPTE), the company had just released its second-quarter earnings, and the stock was down to $13.02 per share from its July highs of $29.50. Back then, there were three basic questions:

  1. Does WPT have a business or doesn't it?
  2. If so, is parent Lakes Entertainment (OTC BB: LACO.PK) the better value?
  3. And if so, should you be willing to touch Lakes with a 10-foot pole?

I gotta confess: As soon as I wrote that, I lost all interest in both stocks.

I mean, why even bother looking at a company where I have to ask those kinds of questions? After all, I've been buying three other high-quality companies for my own portfolio lately: Barry Diller's InterActiveCorp (NYSE:IACI), IAC's recently spun-off online travel leader Expedia (NASDAQ:EXPE), and slot machine giant International Game Technology (NYSE:IGT). All of them have legitimate businesses, generate bucketloads of cash, and look very much like values at current prices.

Last time, I concluded that if WPT's currently deserted online gaming business ends up being worth anything at all, the stock has legitimate upside, but that the rest of the business was worth only about half the stock's market price.

As it turns out, the stock closed yesterday at $8.84 per share, a mere 10.5% premium to WPT's $8-per-share IPO price in August 2004. A big reason for the decline was online gaming leader Party Gaming's (LSE:PRTY) prediction earlier this month that growth rates would slow. If the online gaming market isn't going to be as big as everybody thought, then obviously WPT's potential in that area is slimmer, particularly if it can't shake its current status as a fringe player.

I wouldn't recommend paying a dime for WPT's online business -- but then again, maybe you won't have to.

The Lakes value angle
I had previously considered the idea of buying Lakes Entertainment -- which owns 62% of WPT -- as a means of obtaining WPT at a value, but that's probably too creative a strategy.

It's troubling that the company, which develops and manages Native American-owned casinos, hasn't filed a 10-Q since Q3 2004. Lakes has been embroiled in controversy with the SEC over the way the company accounts for its loans to Native American tribes on its balance sheet. As of Q3 2004, Lakes had $90.9 million in loans outstanding to Native American tribes to help them build their casinos. If a particular casino project doesn't get approved and built, that loan is worthless -- yet the company records the full value of the loans as an asset under "Notes Receivable" on the balance sheet. Since the development of these casino projects is anything but assured, the value of the notes most likely overstates book value.

As my colleague Bill Mann put it, "How can a company that doesn't have any operations already have an accounting problem?"

As a result of the missed filings, Lakes Entertainment shares were delisted from the Nasdaq last month. It probably didn't help that on June 29, Deloitte & Touche resigned as WPT's independent auditor due to the audit risks associated with WPT's involvement in online gaming, and declined reelection as Lakes' independent auditor the following week by close association.

On the bright side, WPT signed on Las Vegas-based accounting firm Piercy Bowler Taylor & Kern as its new auditor in August, and Lakes followed suit last week. Lakes has added several new Native American casino deals in Oklahoma and Texas, and a couple of the other projects may be nearing final approval. (Of course, Lakes management has been known to say that from year to year.) And assuming Lakes can raise funding for a company-owned and operated casino, the company projects an "early 2007" opening in the Vicksburg, Miss. market.

And maybe there is something to the company's table game business -- though I only say that because I finally saw a single WPT All-In Hold'em game yesterday.

That said, I still take issue with a company whose management uses stock price as a measure of quarterly performance.

Ignore Lakes and consider WPT
As it stands, Lakes' 62% stake in WPT had a market value of about $110 million at Tuesday's close, while Lakes' market cap stood at about $254 million.

Nonetheless, I think we can just ignore Lakes entirely. As an investor, it simply isn't worth wondering whether Lakes is worth the $144 million difference between the market price of its 62% stake in WPT and Lakes' overall market cap.

On the other hand, despite the questions surrounding the potential of its online gaming business, WPT is starting to look interesting. The company's media and product licensing business is legitimately profitable. (That said, I also think that Harrah's Entertainment (NYSE:HET) -- another stock that is starting to look attractive after its recent pullback -- represents a much tougher competitor than I previously believed, especially since its acquisition of Caesars extends the reach of its World Series tournament circuit.) In addition, I believe that WPT's brand value is increasing as the company continues to further penetrate international markets, which should support the online business, at worst, as a means of cheap and effective marketing.

Should the stock fall much further, I think that investors may be able to purchase WPT's media and product-licensing businesses -- plus the brand -- at fair value and get the online business for free. To me, that looks a lot like a value opportunity.

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Fool contributor Jeff Hwang owns shares of InterActiveCorp, Expedia, International Game Technology, and Overstock.com. The Fool has a disclosure policy.