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Zynga Seeks Partners for Online Gambling

Social games developer Zynga has made an about-face in regards to moving into the real money online gambling market, announcing last week that it was in fact seeking out partners to offer online poker or casino games for real money.

As recently as a few months ago the company had stated that it had no plans whatsoever to dabble in the real money gambling market, content to use its tried-and-true business model of monetizing its games by selling advertising and offering players the chance to buy additional add-ons and items within its games.

The company released the following statement about its latest move: “We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than 7 million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.”

Zynga's recent IPO could explain its change in stance, as the company has come under pressure to prove that its future prospects are strong for revenue growth, with the share price slipping well below where it initially opened at $10/share, trading recently for around $8.50.share.

While the company's FarmVille, CityVille, and Zynga Poker games remain some of the most popular on Facebook, competitors continue to nip at their heels with similar knock-off games and some analysts believe the appetite in general for the genre of games Zynga specializes in may be cooling.

Zynga faces many obstacles in offering real money poker or casino games despite the fact that it has a huge player base for Zynga Poker, which the company claims has 30 million active users each month.

The company would also have to clear various regulatory and legal hurdles and likely limit its real money online gambling games to users in countries that allow it, which would exclude major markets such as the US that have laws on the books that prevent legal online gambling.

20-Jan-2012, 03:52

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