Zynga Could Hit Jackpot with Online Gambling, Looks for Partners

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Zynga (NASDAQ:ZNGA) is the leader in social gaming and is charging forward in the mobile gaming space by acquiring mobile gaming studios and launching new mobile games on iOS and Android. We recently posted about a significant new opportunity for Zynga – online gambling – which could potentially generate billions of dollars in additional revenue, if Zynga makes a move in the space soon. Zynga has now confirmed that it is seeking partners to launch new online gambling initiatives.

Check out our complete analysis of Zynga

Zynga’s spokesperson made this statement to AllThingsD: [1]

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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 crown jewel – Texas HoldEm Poker – could generate billions if the online gambling floodgates are opened

One of Zynga’s first games, Texas HoldEm Poker, currently has close to 30 million monthly active users and is by far the most popular casual gambling game online. It already generates the most revenue for Zynga due to the high average revenue per user for the genre. If Zynga enables users to play its casino themed games like Poker with real money, it could lead to a significant increase in the average revenue generated per user and account for a major portion of Zynga’s total revenues.

Zynga recently launched Zynga Casino, which offers Poker and Bingo. It could launch even more casino games on Zynga Casino, to cash in on the online gambling market, which is expected to grow to $40 billion by 2014.

Zynga competes primarily with Electronic Arts (NASDAQ:EA), Playdom which was recently acquired by Disney (NYSE:DIS) and other independent social gaming studios. New casual games, and Texas Holdem Poker are its two most valuable businesses, accounting for over 70% of Zynga’s $10 Trefis price estimate, which stands nearly 10% above its current market price.

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Notes:
  1. Zynga Confirms It Is Seeking Partners for Online Gambling Initiatives, AllThingsD []