San Francisco based game developer Zynga has begun the arduous process of entering the legal US online gaming market. Although online gambling remains illegal at the federal level a decision by the DOJ in December 2011 paved the way for states to launch their own internet gambling operations. The Associated Press has reported that Zynga has filed a request with Nevada regulators to introduce mobile and social games for real money. In them past Zynga has steered clear of unclear regulations and has used virtual currencies for popular Facebook games like Zynga poker which allows players to gamble with a cyber-currency that they must buy through the game’s application.
In a December 5th statement Zynga said the company is looking for an “application for a preliminary finding of suitability” from the Nevada Gaming Control Board as part of the company’s plan to enter real money gaming markets in the US. The recent news comes two months after Zynga announced that the company would partner with UK based gaming company Bwin Party “to offer real money online Poker and Casino games in the UK market.” In September Zynga hired gaming veteran Maytal Ginzburg Olsha to head the company’s entry into online gaming.
Earlier in the year Nevada became the first state to license internet gambling operators. The operators are restricted to intrastate gaming in Nevada only. Bwin Party has already formed partnerships with some of Nevada’s largest gambling companies including MGM Resorts International according to a report in the Wall Street Journal. The two companies were granted licenses by Nevada regulators but have not yet launched any internet gaming operations in the state. Zynga Chief Revenue Officer Barry Cottle told the Wall Street Journal “As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market.”
The move into internet gaming is part of Zynga’s plans to establish more reliable revenue streams for its products. Zynga first went public in December 2011 for $10 dollars a share but the company saw its share values decrease after a weak second quarter earnings report. Zynga was not able to fully recover in the third quarter. Zynga also announced that the company would loosen its ties with Facebook. The Facebook Zynga partnership enabled the game developer to rise to prominence on the social networking site. Zynga said the application process in Nevada should take about 12 to 18 months.