Zynga Inc. (ZNGA:US) gained the most in six weeks after filing an application with the Nevada Gaming Control Board, a step toward operating real-money gambling sites in the state, a possible new revenue source for the struggling maker of social games.
The shares advanced 5.6 percent to $2.45 at 10:41 a.m. in New York, and earlier touched $2.54 for the biggest intraday gain since Oct. 25. Through yesterday, the stock had plunged 77 percent since an initial public offering in December.
Zynga filed for a preliminary finding of suitability for gaming in Nevada, Chief Revenue Officer Barry Cottle said yesterday in a statement. It could take the San Francisco game maker 12 to 18 months to become eligible for real-money wagering in the state, he said.
Gambling is a possible new revenue opportunity for Zynga, which has struggled to step up growth as gamers have shifted to mobile devices. While the company said in October that it signed a partnership with Gibraltar-based Bwin.Party Digital Entertainment Plc (BPTY) to offer real-money gambling in the U.K., the filing marks Zynga’s first step toward U.S. gambling.
“As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market,” Cottle said in the statement.
Nevada has begun granting licenses for online poker, and Delaware and New Jersey are on track to follow next year, according to the American Gaming Association. It could take five years before online wagering becomes legal nationwide, according to Doug Creutz, a Cowen & Co. analyst.
To contact the reporter on this story: Douglas MacMillan in San Francisco at firstname.lastname@example.org
To contact the editor responsible for this story: Tom Giles at email@example.com