Zynga Enters Online Gambling Arena

Zynga

ZyngaAs a new entrant into the online gambling industry, Zynga Inc. will launch casino-style games and poker in Great Britain. Partnering with bwin.party Digital Entertainment, Zynga is attempting to reverse its decline in revenue as participation in games like Farmville continues to decrease. With this announcement, Zynga shares immediately shot up 5.5 percent to $3.24.

Aptly named, “ZyngaPlusPoker” and “ZyngaPlusCasino,” users have the option of a desktop-based application or access through their favorite browser. Zynga has also been developing Facebook versions of its most popular games to target a huge pool of additional players. Within the next few months, the company will announce mobile and Facebook games. These two new brands are available to players over 18 years of age.

Between the two entities, players will have access to an online poker room offering numerous poker games as well as tournaments for buy-ins at all levels. The casino side will offer 160 slot games, including a FarmVille-theme slot game, alongside a variety of table games such as roulette and blackjack. There will be a single wallet within the software that allows players to login from any device (desktop application, browser, mobile or Facebook) and have immediate access to their funds.

Facebook is a $143 billion company boasting a forward earnings multiple at over 50. Online gambling could become a major component in Facebook’s future revenue. Zygna’s move to utilize Facebook as a gambling platform could be revolutionary and have a major impact on both company’s bottom lines.

Despite online gambling being illegal in the United States, Zynga is targeting the regulated markets such as New Jersey and Nevada while it anxiously awaits lawmakers to pass federal online gambling regulations. Zynga is planning to expand its casino availability outside of the United Kingdom and into other major European markets in the near future.

The company’s goal is to offer players the “next generation of real money games” using several different platforms in global markets. Zynga’s current target market is around 300-million potential players. Currently the global online gambling market is worth $30 billion according to statistics from 2013 and it continues to grow.

At this time, the company’s agreement terms with bwin.Party has not been released to the public. Experts estimate that the host company will be receiving the majority share of revenue since it holds the United Kingdom gambling license.

In 2012, Silicon Valley’s fastest growing company, Zynga, began to experience a reversal when users stopped playing games like CityVille and FarmVille. A mass change in consumer behavior from spending more time on mobile devices and less on desktop computers severely affected Zynga’s bottom line. Zynga went public in late 2011 at $10 per share. By November 2011, the stock dropped to its lowest point of $2.10. This was a price slightly above its cash, assets and securities.

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