Zynga Applies For Nevada Gaming License
Zynga shares are higher by about 6% today after the maker of Farmville announced its Nevada gaming license application.
“This filing continues our strategic effort to enter regulated RMG (real-money gaming) markets in a prudent way,” Zynga chief revenue officer Barry Cottle said Wednesday night.
According to Cottle, the application process should take between 12 and 18 months. It is not Zynga’s first step into the world of online gambling, however. The company already partnered with bwin.party, a British gaming company that specializes in sports betting, bingo and poker.
“The broader US market is an opportunity that’s further out on the horizon based on legislative developments,” Cottle said. “But we are preparing for a regulated market.”
Under the Nevada gaming license, Zynga would only be allowed to offer online gambling to residents of Nevada. Current laws prevent US companies from sponsoring online gambling, but the gaming industry is pushing Congress to relax such laws, arguing that games such as poker are based upon skill rather than chance. Still, federal authorities continue to crack down on offshore companies that make millions on similar Internet games. Still, other states are taking matters into their own hands. Delaware legalized online casino gambling in June, and New Jersey is currently considering a bill that would legalize Internet gaming within its Atlantic City casinos.
Zynga recently had to lay off 5 percent of its workforce after it has struggled to profit from the dropping popularity of social-network based games. RMG could potentially put it back on top.