Zynga’s faces hurdles from Casinos – ZNGA, CZR, MGM & BYD
Northern, WI 03/04/2013 (gdpwatch) – Zynga Inc (NASDAQ:ZNGA) is a world renowned social gaming platform but this company seems like lagging in real money gambling as states like New Jersey are legalizing the online betting rules to favor the existing casinos.
Zynga offers most popular free to play poker game. The stock of the company has surged by 45% percent this year. Investors believed that the company can make similar kind of profits even in real online gambling.
Investor optimism is a long shot. Laws are already in favor of casinos and the companies like Caesars Entertainment Corp (NASDAQ:CZR) and MGM Resorts International (NYSE:MGM) are dominating this field and many companies are seeking partnerships with these firms.
Mr. Bronson, chairman of U.S. Digital Gaming firm stated that he can’t tell exactly what type of games the government may allow and what would be the tax structure.
Manchester, U.K.-based researcher H2 Gaming Capital estimates that the U.S market for online gambling may surge to $7.4billion a year by 2017. At present New Jersey, Nevada and Delaware states passed the laws to enable the residents to play online.
In Delaware the state lottery board is holding responsibility to run this business and seeking bids from technology partners.
Nevada signed a law on Feb.21 and is allowing the land based casinos to operate online poker. Gaming law specialist, attorney Las Vegas Mr. Greg Gemignani and Governor Chris Christie signed a law on Feb.26 which enables the current operators to offer all the games online if their hardware is located in Atlantic City.
President of the American Gaming Association Mr. Frank Fahrenkopf states that the governor is trying to save the casinos of Atlantic City and the huge profits they are making.
Social gaming companies bring lot of mergers and working agreements, as stated by Mr. Fahrenkopf. Bwin is an internet gambling company which handles business from Gibraltar, MGM resorts and Boyd Gaming Corp (NYSE:BYD) have arrangements with this company.
In U.K Zynga is in partnership with Bwin and hosted real money betting games such as “Farmville”. Stocks of Zynga in San Francisco are up by 1.5% to $3.43 at closing in New York. It gained 25% because of the new laws passed in Nevada and New Jersey.
Zynga spokespersons refused to go elaborated on company goals but said that the company has applied for operator license in Nevada and it the approval may take up to 12-18 months.
Zynga Inc (NASDAQ:ZNGA) is up by 1.48% closing at $3.43
Caesars Entertainment Corp (NASDAQ:CZR) is up by 0.08% closing at $12.51
MGM Resorts International (NYSE:MGM) is down by 0.48% closing at $12.43
Boyd Gaming Corp (NYSE:BYD) is down by 1.67% closing at $6.46