Okay, it is getting close to the major realization that things in Zyngaland are not all that Motley Fool and CNBC wish them to be. People forgot (or didn't really listen) to what Pincus actually said. So, let's review. He said, "he sees an opportunity to bring this gambling element into more than just casino games". And that, "the amount of innovation you're going to see around gambling as an entertainment mechanic is going to be mind blowing". So, the market paraphrased that as, "Pincus says online gambling will be mind blowing". Actually, he said much more than that. He said, "more than just casino games", "innovation", and "gambling as an entertainment mechanic" ... this means real money gaming on Zynga's other games for fun by the masses in new ways (mobile devices).
So, while Motley Fool loves to bring up the pretend farming thing at every opportunity, let's talk about Zynga's other offerings. Zynga has no debt, $1.7 Billion in cash, trades at book value, and will be profitable in FY14. Let's look at CZR ... $14 Billion in debt, negative book value, negative free cash flow, expecting to lose $5 per share in FY14. So, Zynga has much to offer any partner. Zynga could partner with a debt-loaded existing casino to get instant credibility and name recogition ... but, do you need credibility to allow someone to wager on a Running with Friends game ... do you need name recognition if you are already the largest social gaming company in the world? Zynga could pay cash for an existing brick-and-mortar casino and offer online gambling creating the world's first debt-free casino operation (wouldn't that be unique). Zynga has nothing but options and opportunities. Frankly, it's mind blowing. Zynga has over 250 million active players and a portfolio of popular games of skill which could instantly become real money games. Pincus it's about that time ... show us your cards!!
Here's what I "think" I know. (Refute any or all of it to put me on the straight and narrow.)
NJ has a deadline of June 29, which has to be the best news in recent weeks. "Pop one or get off the pot." Finally.
Z can't buy Atlanta Club if there is the slightest chance of an appeal. Only way to make that happen before or by June 29 is to pay people to go away.
The surest way to meet guidelines is to partner. At this point does it matter who? We'll have to like it. (Although Doerr and Ko seem to think before jumping. So chances are good for a good match.)
Z may not have the NV license until the end of the year. A slim chance sooner.
NV is not locked on poker only. (Yeah, I said it.) NV is using poker as a beta with more games to follow in a year or more. A very slow roll out.
A federal bill is needed if for no other reason than to serve as a guideline to all states. Also, a fed bill will expedite online gambling nationwide. With or without a bill the feds will collect. Tax on the winnings.
I think that's the contents of my head.
Z is not the only one shooting for the 29th. Is there a chance companies like Z can appeal to NJ to extend the deadline? I imagine anything is possible.
Read between the lines blue...nice! Some hear but don't listen, they look but never see the opportunity. I had a few friends who owned race horses. I was thinking how much fun it would be to raise, feed, and care for different horses. But there is a risk involved, expenses, and stables smell. But what if we get to the point where you could raise virtual horses similar to the farmville concept. Then use your horses to compete with those around the country or world winning an actual purse. Race cars, sports teams, etc...could all be done using zyn virtual goods model combined with gambling or competition. Just a fun weekend thought. Have a good one.
Talk about fantasy football, fantasy assassin's creed, the opportunities are limitless. Players role playing, gamblers gambling on fantasy produced games, sports, movies, outcomes.... LIMITLESS !!!!!! There are so many avenues that Pincus could walk his dog down. This strengthens my resolve that ZYNGA WILL ABSOLUTELY SUCCEED. With all the potential explosive ideas out there.... They only have to hit a few out of the ballpark. Lets go ZYNGA! Time will reveal what Pincus has been up to soon enough!!!
That's a terrible idea.. No offense Blue...
We don't need innovation right now. We don't need Pincus trying to roll out something new.
What we need is the management team to just announce who their partner will be in NJ and then set about executing on a plan to be ready in NJ, and to not screw it up... That's all.
Don't be like a football coach who on 3rd and inches throws a bomb down field... You take 3rd and 4th down if needed and hand the ball to the fullback straight up the middle. Not sexy...
This is why I have any concern at all about this bet... The idea that Pincus could try to do something other than execute on the obvious.
if you believe the money is in skill-based real money gaming via sophisticated games (most now played on mobile remember) then you should be invested in GLUU....CEO De Masi is way way ahead of Zynga on this. If you believe the future is casino slot type games (again most will be played on mobile devices) you should invest in the casinos themselves...here in the UK we have had legal real money gaming for years...the revenue is had by the casinos/bookmaking firms here NOT ames developers (how much studio effort does it take to make a slot/roulette /poker game... this is not BS we have a clear example here in the UK of how this can will play out for you in the US....again , that is why GLUU ceo De Masi is ultra reserved on the expected revenues from RMG (in particular casino games). So where does this leave Pincus... he has a company which is struggling with mobile penetration, still banging the old desktop-social model, unable to produce hit games (how dated do Farm games sound now?!) ..and using his media buddies to whip up fenzy about all that money which he'll take from casinos with his slot games...really? This is why the stock is down...why GLUU is a far better bet at its mkt cap...or if was sensible, why Pincus should buy out GLUU.
if you doubt what i say about the situation here in the UK ..Google some of our online book-makers such as William Hill or Ladbrokes..look at the games currently being offered here . who are the games developers ? Who makes the money from them?
It's a lead-pipe-cinch that if Pincus has not filed an application already, we're all in trouble. Important steps such as that are not done at the last minute. Meanwhile last evening 60 minutes featured an on-line illegal gambling 5 minute spot, and Sen. Kyle AZ is defiant about not allowing gambling. I can believe Sessions and Shelby of AL will also be in that camp, I know them. Ultimately the projection in outer years for revenue is so awesome that lobbyist ought to have a field day and sway congress to our advantage. We're talking about a really hard struggle, however.
Atlantic City casinos have until June 30th (less than two weeks from now) to ink deals with game companies (i.e., ZNGA and its fellow game providers) if they want to be guaranteed to be up and running when internet gaming goes 'live' around Thanksgiving in New Jersey. There are still about a dozen casinos who have yet to sign deals with the likes of ZNGA. Now, as has been widely reported, those casinos are looking for the game provider who can provide the best deal for that casino's shareholders. In light of the fact that ZNGA has more users than any other game company - likely even in New Jersey where users must reside - won't ZNGA be the most attractive game provider to a casino in that it will be in a position to offer a casino the largest number of users for its live games? One need not be a rocket scientist to conclude that the answer is a resounding 'YES'..In light of the comments made by Mark Pincus that ZNGA's focus going forward will be online gaming, you can bet ZNGA will ink a deal with a New Jersey casino by the end on June. Pincus is no doubt now on the hunt for that casino which can provide ZNGA with the best deal for ZNGA's shareholders, and is probably weighing a number of offers from casinos to determine which is the most attractive for ZNGA. In light of thee fact that no deal has yet been announced, and that when signed such a deal must be announced to shareholders as it will be required to be reported to shareholders under security laws, no deal has yet been signed; however, we will no doubt receive an announcement within the next two weeks. When it comes, it will again focus attention on gaming stocks and likely result in a dramatic rise in the group, which at the moment is languishing in the doldrums. My guess is that over the next two weeks, the stocks in that group, including ZNGA, will begin to anticipate the news and be bid up in price.