Zynga Inc (NASDAQ:ZNGA) has formally departed from the real money gaming world by withdrawing its application for an interactive gaming license in Nevada. Zynga was all excited to foray into real money gaming, and applied for the license last year, in December, for digital casino and social games with cash payout to consumers.
Possible reasons for withdrawal
Zynga, which is now headed by Don Mattrick who replaced Mark Pincus, announced earlier that the company will no longer go into online gambling.
Zynga Inc (NASDAQ:ZNGA) might be planning to focus primarily on its free to play games and enhance their quality, rather than foray into real money gambling.
“Zynga believes its biggest opportunity is to focus on free to play social games….. While the Company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue license for real money gaming in the United States,” read the company’s Q2 2013 earnings report.
Another reason for withdrawing the license might be the size of the online gambling population in Nevada. At present WSOP.com and Ultimate Poker operate in Nevada and have a combined user base of just 200 users.
Zynga struggling
Zynga is reeling under losses and posted revenue of $231 million in the fiscal’s second quarter, which was a 31 percent decline year on year. Net loss for the company came in at $16 million. The company slashed costs on various fronts like cutting around 20 percent of its workforce, discontinued around 11 games and removed various other games from the app stores.
Though Zynga Inc (NASDAQ:ZNGA) has retreated from Nevada, it still continues to operate Zynga Plus Poker, which offers real money online poker in the U.K.
Zynga out, Scientific Games in
Contrary to Zynga Inc (NASDAQ:ZNGA), Scientific Games is ready to expand its activity in Nevada. Shareholders at WMS gave their approval for the deal with Scientific Games in May of 2013. The deal is expected to complete by this autumn, on approval of the gaming regulatory authorities and customary closing condition. A. Lorne Weil, chairman and chief executive officer of Scientific Games, said that the company is pleased with the unanimous approval from Nevada Gaming Commission.
