Online Gaming Giant Zynga Axes US Online Gambling Plans

Zynga is a company that is well known by many of the more than 1 billion regular Facebook users. Some of the most used applications on that social networking giant are “play money” casinos and poker rooms, and the undisputed king of that venue is Zynga. Recently their shares skyrocketed, as did the hopes of US online gamblers, when the company dramatically announced they were seeking Internet interactive licensing in Nevada which would allow them to offer real money gambling applications and games online. However, the company’s shares and the finger-crossed dreams of prospective real money online gamblers in the United States were both dashed this week.

Zynga is dropping plans to obtain a license for online gambling in the US, according to the company’s Chief Operations Officer David Ko. He spoke at a news conference with investors and members of the media late Thursday, July 26, and outlined the plans of the company to continue to offer online gambling in the United Kingdom and other countries, but for the present time their US online gambling efforts will be put on the back burner. This by no means spells the end of the massively popular online game developer eventually offering some type of online gambling in the United States and North America.

But it hurts the online gambling effort in the United States because the company had already developed an excellent reputation and a feeling of familiarity with millions of social networking patrons. Zynga had originally announced plans to pursue some type of online gambling sponsorship in December of last year, and has been very successful and popular with its online gambling offerings in the UK, which they launched this April. The US gambling online picture is murky at best, and currently three states alone have regulated and legalized online gambling in some form. But there are currently two pieces of legislation at the federal level which would offer blanket United States gambling online coverage. Still, as yet no federal plan has been okayed.

The surprising move comes after the company has suffered back-to-back quarterly losses which continue to grow in size. Warning of mounting losses this quarter as well, Ko stated that the company was circling the wagons around their original focus, which is offering “social gaming, free-to-play” opportunities online. Regardless the reason, this is a substantial blow to the hopes of millions of Americans who enjoy responsible adult wagering online on their computers, tablets and smartphones. Currently Americans can access online sportsbooks and casinos which deliver a legal gambling experience because the companies offering that access are legally licensed and registered in jurisdictions located outside the United States.

But multiple polls have shown that US citizens would prefer to keep that money at home, and this reversal by Zynga may eventually have a positive impact. American politicians certainly understand the online gambling community represents a multibillion dollar a year business. Industry analysts and experts in the field believe just the mobile gaming segment alone will produce $100 billion in revenue as soon as 2017. If big-name players offering the online and mobile gambling experience decide to shun the United States in favor of other countries, senators and congressmen from cash-strapped states may decide to stop that exodus by finally delivering legalized online gambling to the residents of the US.

6 Comments

  1. I can’t believe they pulled out just when the US is getting on board with online gambling. Sigh.

    • It is disappointed as they were a trusted brand that players could trust. I’m confident there will be enough quality brands to deliver a nice selection one the on switch is ready to be flipped.

  2. Who needs them. There will be plenty of brands willing to do what it takes to meet licensing requirements – they will be sorry when they see how lucrative the market is.

    • I think there will indeed be plenty of brands to take their place. Its a multi-billion dollar industry – and plenty of online gambling providers will see that the US market is ripe.

  3. Not a smooth move. But you have to admit, the gov’t, even state gov’t regulates the hell out of everything – they make it so much work to get involved that I could see some of the great brands passing up the opportunity.

    • Ya – they can make it tough – but legalization of the any online gambling platforms is a huge first step in the right direction. I think the brands that pass it up will miss out on a boat load of revenue. Their loss.

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