Online Gambling Brings Hope to Zynga
So far this year Zynga’a stock has risen a massive 59% thanks to the company’s entrance into the online gambling market. Similarly, shares of Glu Mobile, a rival company, rose 18% this week after it announced it was going to start offering real-money gambling in the UK.
The two companies have also seen their shares rise since New Jersey legalised online gambling. As nationwide online gambling legislation becomes more likely in the US gambling operators have been reaping the benefits.
Arvind Bhatia, an analyst at Sterne Agee, said “We’re cautiously optimistic about Zynga’s potential [in online gambling] but there are a lot of unknowns. Until we know more it’s going to be more of a promise than reality.”
Bhatia believes that even once online gambling is legal in the States it will take “a few quarters” for the company to start enjoying the benefits.
However, Zynga is depending upon future revenues from online gambling as more of its social games cease to enjoy the popularity which made the company so famous. Last year Zynga’s shares fell almost 80% and the company’s prospects were looking grim until it filed for a gaming license in Nevada.
Zynga is also planning to launch poker and casino games in the UK this year.