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Zynga Real-Money Online Gambling Comes to Facebook (FB, ZNGA)

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Gambling, in both the online and physical worlds is all about generating excitement. Zynga (NASDAQ: ZNGA) hoped to generate some excitement of its own Wednesday as it prepared to unwrap its real-money gambling apps for Facebook (NASDAQ: FB) and for mobile.

San Francisco-based, Zynga said that while social gaming remains the core of its business model, real-money gambling is a logical extension for those in countries like the United Kingdom, where online gambling is legal, who want to bet real money in a social gaming context, according to Venture Beat.

Zynga has downplayed the revenue-generating possibilities of real-money online gambling, saying instead that this is more of an experiment. The company released web and downloadable versions of the games in April. The Facebook and mobile versions, however, present an opportunity to put the apps in front of a much larger audience.

Since the new games were designed in partnership with Bwin.party, which has a well-established presence in online gambling, Zynga says they meet all statutory and legal guidelines including requiring players to prove they are over the age of 18 and reside, geographically, in an area where online gambling is legal.

In addition, Zynga has made the new Facebook and mobile apps look completely different from the existing social apps – an obvious attempt to avoid user confusion, which could be a public relations nightmare.

The “unwrap” event Wednesday, which took place in Barcelona, precedes the actual availability of the apps. That, according to Zynga, will take place in the near future. Final approval from the United Kingdom has to happen before the software becomes available to the public.

The apps and resultant move into real-money online gambling actually started in October 2012, when Zynga hired Maytal Olsha, an experienced gambling executive. About six weeks after the hiring, Zynga dropped its partnership with Bwin.party.

Since then Zynga hired its own online gambling experts and acquired Spooky Cool Labs, founded by slot machine experts, including Joe Kaminkow, who holds 130 game patents according to Venture Beat.

All this would point to the notion that Zynga plans to jump headfirst into online gambling. However, the hiring of Don Mattrick who headed up Microsoft’s (NASDAQ: MSFT) Xbox division, as Zynga's CEO has caused some observers to rethink Zynga’s motives.

Forbes pointed out that even though Mattrick is a smart guy and a savvy executive, he knows next to nothing about online gambling. As Forbes noted, by placing Mattrick in the driver’s seat, Zynga founder Mark Pincus has made it clear that Zynga is a gaming company, not a gambling company. That could make the whole gambling foray more of a diversion than a reality.

Zynga shares were up $0.06 or just under 2 percent at $3.40 in late morning trading Wednesday on news of the online gambling move.

At the time of this writing, Jim Probasco had no position any mentioned securities.Zynga shares were up $0.06 or just under 2 percent at $3.40 in late morning trading Wednesday on news of the online gambling move.

 

At the time of this writing, Jim Probasco had no position any mentioned securities.

Posted-In: Barcelona bwin.party Don Mattrick Facebook Inc.News Events Tech Media Best of Benzinga

 

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