Zynga CEO confirms interest in online gambling
A move into real-money Internet gambling would be a natural fit for the world's largest social gaming company.
Zynga stands to benefit the most from online gambling
Zynga's CEO stated at the Morgan Stanley TMT Conference:
"The amount of innovation you're going to see around gambling as an entertainment mechanic is going to be mind blowing. We're definitely talking to all of the players that you would suspect. We have incredible respect and admiration for brands and groups like the Wynn… I would expect that you'll see a lot of these players kind of figure out their go-to-market partnerships for sure before the end of this year."
Zynga currently has more than 33 million monthly active users for Texas HoldEm Poker, the most popular casino-themed game on Facebook. It recently launched two more casino games --Bingo and Slingo. Venturing into real-money online gambling would be a natural fit for Zynga, which already has a massive user base and is well-positioned to make such a move. The company recently launched its own Zynga Platform, which will help it host its own online gambling games and setup its own payment infrastructure to boost revenues. Zynga is currently planning to partner with traditional casino firms like Wynn Resorts (WYNN), rather than going solo.
Texas HoldEm Poker is Zynga's most valuable game currently, and stands to become its largest revenue driver if it successfully makes the move into online gambling, as the average player spend is significantly higher in real-money gambling games.
We currently have a near $13 Trefis price estimate for Zynga, which is nearly 10% below its current market price. Gambling games like Texas HoldEm Poker account for almost 30% of its total value.
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