Zynga Shares May Gain Further Momentum as Christie to Sign Web Gambling Bill
New Jersey Governor Chris Christie has said he will sign a bill into law legalizing online gambling once it hits his desk either Wednesday or Thursday of this week, and all eyes will be on the world’s largest free-to-play Internet poker site Zynga.
That company’s shares rose 15 percent to $3.67 Monday morning, representing the single biggest intraday gain since February 8. Zynga’s shares were already up 35 percent on the year.
Why the surge?
Last week, a law was amended in the state of Nevada which now allows Web gambling companies to accept wagers from outside the Silver State’s borders, provided those states enter into a compact similar to that of the lottery system’s Powerball model.
Christie legalizing Internet gambling in New Jersey could help Zynga’s share price climb even further.
“As states legalize some form of online gaming, you’re likely going to see Zynga positively impacted,” Edward Williams, an analyst at BMO Capital Markets, said in an interview. Revenue from Web-based betting will probably measure “in the billions,” he said.
Zynga has already formed a partnership with an existing “real money” online gambling firm based out of Europe.
The San Francisco-based company filed for a preliminary finding of suitability for gaming in Nevada, Chief Revenue Officer Barry Cottle said in December and expects to be up and running with real money play some time in early 2014.
- Aaron Goldstein, Gambling911.com
