Zynga Ditches Drive for Real-Money Online Gambling in U.S.
In what amounts to a very substantial change of plans for a company that many expected to play a prominent role in America's regulated market for real-money online gambling, Zynga announced today that they are effectively abandoning the U.S. RMG industry.
The company phrased it in slightly softer terms, of course, saying that they were "making the focused choice not to pursue a license for real money gaming in the United States."
But the end point of both ways of putting it is the same: The nascent efforts of Zynga to profit from regulated real-money online gambling in the United States are, for now, at a full stop.
Decision resulted from need for "focus"
On a conference call discussing the move, along with the general performance of Zynga in the 2nd quarter of 2013, Zynga executives offered precious little in terms of an explanation for the shift away from real-money online gambling in the U.S..
The one executive who directly addressed the change in strategy, COO David Ko, provided the vaguest of explanations, saying simply that the company's choice came down to "focus," while referencing the disappointing performance by Zynga in the free-to-play casino segment as additional support for the pivot away from real-money gambling.
Just the latest twist in Zynga's long relationship with RMG
Zynga has been engaged in a flirtation with online gambling for real money in the United States for years. The company has been mentioned as a potential partner for a variety of land-based casinos, most prominently Wynn. And for years it was assumed that Zynga would eventually seek to parlay its success with free-to-play games like Zynga Poker into a competitive position in the real-money space.
Zynga took few concrete steps in the direction of actually offering such games, however. The one significant step in the last year was Zynga's filing for a preliminary finding of suitability in Nevada.
If Zynga had received the thumbs-up from gaming regulators in Nevada, the company would have had a good deal of flexibility in terms of choosing to focus on being an operator, a technology partner or simply a brand partner.
But that application is now apparently withdrawn. Although we have yet to receive formal confirmation from Nevada officials that that is indeed the case, reports citing sources within Zynga have confirmed that the company's Nevada application is effectively dead.
Zynga made no formal applications for entry into other states where online gambling is close to becoming a reality, such as Delaware and New Jersey.
The company was also not an active participant in the political struggle over regulated online gambling in its home state of California, nor was it among the names mentioned in the recent pushes for federal regulation of online poker and online gambling.
UK partnership with bwin.party will continue, for now
Today's announcement was specifically tailored to the real-money gambling market in the U.S.. So where does that leave Zynga Poker Plus and Zynga Casino Plus, the UK-focused real money gambling options Zynga developed in partnership with bwin.party? And will the coming upgrade to PartyPoker incorporate any Zynga technology?
Zynga's statement makes no mention of the partnership by name, but does assure investors that they will continue to "evaluate" their UK "test" for real-money gambling. That seems a bit shy of a vote of confidence in the future of Zynga's real-money gambling product in the United Kingdom, which was rolled out onto Facebook and mobile devices a mere two weeks ago.
Comments