Thursday, August 16, 2012

Zynga Inc (NASDAQ:ZNGA) Lobbies for Online Gambling Legislation

Game developer Zynga Inc(NASDAQ:ZNGA) is now eyeing real-money gambling to shore up its dwindling revenues and has begun to lobby with the state and federal governments in the United States towards this end.

Online gambling is not legal in many parts of America and last year the U.S. Justice Department made an initial start by indicating that states could start developing regulations for online gambling.

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There has been some move towards some related legislative efforts that would include Internet gambling as well. Global online gambling is now worth an estimated $30 billion, with online poker worth a potential $6 billion annually in the US.

Zynga, has, of course said that its real-money gambling initiatives would not start with the U.S. market. Currently the company offers "Zynga Poker" that is played with virtual money and cannot be exchanged for real money.

The game developer, which makes games for Facebook, including the popular Farmville, has seen diminished interest in its games on the social network while new games released by it have not seen much traction.

In fact Chief Executive Mark Pincus had told analysts at the conference call after the release of its second quarter results that the company expected to launch its first real-money gaming products in the international markets in the first half of 2013.

Zynga said that it has spent $75,000 towards these lobbying efforts in Washington and California, for promoting the cause of Internet gambling.

Curiously, its long-time ally and partner Facebook, which was once dependent on Zynga's games for a significant part of its revenues, has also turned to online gambling as alternative stream of revenues.

Facebook has started off offering its gambling services to its subscribers in the United Kingdom.

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