What are the odds of Zynga getting into online gambling?
Zynga may be weighing its odds of succeeding in the online gambling business, but the smart money is on the San Francisco company staying out of the potentially lucrative but legally murky world of online betting -- at least in the near future.
The maker of FarmVille and Zynga Poker stirred up a great deal of discussion when it issued the following statement Thursday to AllThingsD:
“We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than seven 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.”
A Zynga spokesman would not elaborate beyond the statement. But company officials who declined to talk on the record said the social gaming company is merely exploring the option of online gambling and that it has no plans in place to dive in.
Part of what is holding Zynga back are the legal uncertainties. While some 39 states, including California, allow online betting games with cash prizes, others do not. The U.S. Department of Justice in December issued a legal opinion that stated proposals by states to sell lottery tickets online would not violate the 1961 federal Wire Act banning sports betting.
Some argued that the opinion paved the way for states to move into online gambling, but others aren't so sure the narrowly crafted opinion would extend beyond state-sponsored lotteries. Until the legal boundaries are clarified, Zynga is unlikely to cash in its virtual chips for the real deal, company executives said.
Another potential area of concern is the stigma associated with gambling. Historically, many online game companies take pains to distance themselves from online casinos and betting sites, preferring to align their brands as more wholesome, family-friendly entertainment.
That hasn't stopped some daring entrepreneurs from exploring the boundaries, including Richard Branson, who partnered with WorldGaming.com, a Canadian online start-up, to launch Virgin Gaming, which lets video game jockeys compete for cash prizes.
But Branson's move into online betting is rare within the games industry, which is struggling to prove itself as a media, entertainment and art form that is just as legitimate as movies, music or books.
Still, Zynga has broken the mold before -- by eschewing hard-core gamers and successfully going after mainstream consumers who previously had not spent much money on games. Who's to say it won't throw out a few more traditions and delve into online casinos?
Zynga is already partially there. The company last year said it was building a "casino franchise" that would aggregate its current and future competitive games such as Zynga Poker and Zynga Bingo.
-- Alex Pham
Photo: Zynga General Manager Lo Toney, speaking at a Zynga event in October. Credit: Zynga