Zynga Bets On Itself; Applies for Nevada Gaming License

10 December 2012

Newspaper

Zynga applies for online gambling license in NevadaZynga, one of the world’s leading providers of social game services, has filed an application for an interactive gambling license with the state of Nevada.

Zynga has previously entered into a partnership with bwin.party to offer real-money poker and casino games in the United Kingdom starting in 2014. The ability to pull those games into a US market could be just the lifeline the struggling company needs to pull itself out of turbulent waters.

“The broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market, said Barry Cottle, chief revenue officer at Zynga, in a statement as reported by USAToday.

The application process begins with a review by the Nevada Gaming Control Board. From their the Nevada Gaming Commission will review the recommendations offered by the NGCB. The process toward approved licensing could take up to 18 months. The process for widespread legalization of online gambling in the US could take several years. That being said, having an established record and presence in Nevada and other states where it will be legal to wager online will help the company put itself ahead of new companies.

Offering real money online gambling raises the stakes for both Zynga as a company and for the games that it offers. It also has the potential to raise revenue, and quite a lot of it. According to a Reuters article, Zynga has told its investors that real-money gaming could mean the a new lifeblood of revenue for the company. Amid layoffs and restructuring, CEO Mark Pincus is clearly doing as much as he can to keep his company alive and moving in the right direction.

Zynga stocks were up 7% after the announcement was made regarding the application. They continued to rise slowly, but steadily, days after the news was made public.