April 21st, 2012
Via The New York Post, a report that Zynga in talks with Wynn Resorts about an online-gambling deal:
Eager to marry the popularity of social gaming with real-life betting, Zynga is in talks with casino company Wynn Resorts about a potential online gambling partnership, The Post has learned.
Zynga, which sees huge revenue potential in moving from pretend to real-life wagering, needs to form partnerships with casino operators in a number of states if it is to cash in on an expected boom in Internet gambling.
Neither Zynga nor Wynn Resorts responded to requests for comment.
At least 20 states are considering legalizing online gambling after the Justice Department reinterpreted a decades-old federal law in December and found it only banned sports betting and not other forms of online gambling.
Since the DOJ move, Zynga CEO Mark Pincus has been touting the company’s prospects for parlaying its popular virtual poker game into real-life betting, calling the possibilities “mind-blowing.”
While Pincus is waxing poetic about poker, experts said the odds are stacked against the social media upstart, which will need to partner with more than just Wynn to become a major player.
Among the problems: Most of the proposed state legislation would restrict online licenses to those who already are licensed to run a state gaming operation. Wynn only operates in Nevada.
New Jersey, for instance, has a bill that passed the state Senate and is now in the Assembly that would grant Internet licenses only to those with computer servers based in Atlantic City casinos.
“Our goal is to help existing casino operators. We don’t know anything about Zynga,” state Assembly Regulatory Oversight and Gaming Committee Chair Ruben Ramos Jr. told The Post.
In Connecticut, Native American tribes have reportedly said the state would be violating its agreement giving them exclusive casino gaming rights if it issued an online license to anyone else.
Likewise, Iowa in its pending bill offers online licenses only to those already authorized to operate state gambling boats and racetracks.
US Digital Gaming founder Richard “Skip” Bronson said, in a state-by-state scenario that “the existing gaming interests are most likely the ones who will be getting the licenses for Internet gambling.”
Sources said Zynga may try to move first in the UK, where online betting is already legal, though competition is stiff.
Indeed, Facebook, which does not want to host online gambling on its own site, has held conversations with UK online bookmakers William Hill and Ladbrokes about offering Facebook users access to their sites, a source said.
Reps for Facebook, William Hill and Ladbrokes did not return calls and messages seeking comment.
Stern Agee Managing Director Arvind Bhatia said if Zynga is unable to participate meaningfully in legalized online gaming here, its shares could fall as much as 10 percent because investors have baked into the share price expectations of new gaming revenue.
“I think, given that its core market is slowing, the potential gaming revenue is important.”
This entry was posted on Saturday, April 21st, 2012 at 1:28 am and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
