In an effort to forge into online gaming, Wynn Resorts (NASDAQ:WYNN) recently applied for an online poker license in Nevada.  Wynn’s arch rivals including MGM Resorts International (NYSE:MGM) and Caesars Entertainment have already applied for online poker licenses. Nevada, which has become the first state to legalize online poker, recently awarded licenses to Bally Technologies and International Game Technology.
In April, Wynn was in talks with Zynga (NASDAQ:ZNGA), the world’s largest social gaming developer, to form a strategic online partnership. (See our previous post: Wynn Takes Hard Look At Online Gambling Market With Zynga) Speculation is rife that Wynn is interested in partnering with Zynga for this project. Zynga enjoys a dominating position in the social gaming industry and has about 232 million average monthly active users across 166 countries.
We consider this a positive development for Wynn and believe it has the potential to be a future revenue stream for the casino operator. It could also help in targeting prospective customers and strengthening brand value.
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With the advancements in digital technology and growing Internet penetration, it is a wise strategy by Wynn to adapt to the ongoing trends in online gaming. Likewise, brick and mortal retailers like Wal-Mart (NYSE:WMT) are focusing their efforts on grabbing a share of the growing e-commerce market.
We have a $136 price estimate for Wynn Resorts, implying a premium to the market price.Notes: