Zynga Begins Real-Money Gaming for U.K. Adults to Revive Growth

By Douglas MacMillan 

Zynga Inc. (ZNGA) is introducing two real- money games for adults in the U.K. today, pushing into online gambling to make up for slowing growth in other forms of social gaming on the Internet.

“ZyngaPlusPoker” and “ZyngaPlusCasino” will be available to players in the U.K. who are at least 18 years old, San Francisco-based Zynga said yesterday in a statement. The company’s shares rose as much as 8.1 percent in late trading to $3.32 after earlier falling 2.9 percent to $3.07.

Shares have surged 30 percent this year on optimism that Zynga can use online betting to revive growth amid a slump in gaming on Facebook Inc. (FB)’s network, which accounts for most of the company’s revenue. The U.K. games are a first step in a broader expansion plan that includes gambling in various countries, betting via Facebook and real-money games for mobile phones, according to Chief Revenue Officer Barry Cottle.

“Our long-term vision is to offer our players the next generation of real-money games on multiple platforms in regulated markets worldwide,” Cottle said in a blog posting yesterday. “This is just the beginning for us.”

The games will be powered by Bwin.Party Digital Entertainment Plc (BPTY), the Gibraltar-based real-money game operator that reached a partnership with Zynga last year. Bwin will provide the gaming license as well as security measures, such as fraud detection.

Playing to Bwin

Players of “ZyngaPlusPoker” will be put into online poker rooms managed by Bwin, and sometimes compete against players of Bwin-owned games, Zynga said.

The U.S. market for online gambling may reach $7.4 billion a year by 2017, according toManchester, U.K.-based researcher H2 Gambling Capital. New Jersey, Nevada and Delawarehad passed laws as of early March letting residents play in their states.

Zynga took a step toward online betting in the U.S. by filing for a preliminary finding of suitability for gaming in Nevada. It could take the game maker 12 to 18 months to become eligible for real-money wagering in the state, Zynga said in December.

Zynga generates revenue currently by selling virtual goods within its games -- for example, a gun in “Mafia Wars” or a brick oven in “ChefVille.”

To contact the reporter on this story: Douglas MacMillan in San Francisco atdmacmillan3@bloomberg.net

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