Is Zynga’s a Growth Stock Again With Legalized Online Poker?
A federal judge in New York ruled last week that poker’s not gambling, reported the Wall Street Journal. Yes, we know. He ruled that running Texas Hold ‘Em poker games in a Staten Island warehouse is hunky dorey because the game takes skill.
This ruling opens the door a crack to the possibility of legalizing online poker. That’s good news for Las Vegas houses like Caesars Entertainment (CZR), which would love to get into the online poker business. But it also presents an unholy hail mary-type opportunity for the tiny farmers at Zynga (ZNGA).
Zynga’s growth has tanked, and so has its stock price.
Gambling, of course, is viewed by some as a tax on the poor and the stupid. Not a business to be entered into lightly.
Would Zynga’s board go this route? Here’s the list of directors. It includes Zynga chief Mark Pincus, venture cap guy William “Bing” Gordon, other venture cap guy and former LinkedIn (LNKD) chief Reid Hoffman, DreamWorks (DWA) chief Jeffrey Katzenberg, former private equity guy Stanley Meresman, venture guy Sunil Paul, Schmoop University chief Ellen Siminoff, and former Facebook (FB) operating guy Owen Van Natta.
Let’s see, there’s no-one from Don’t-Be-Evil Google (GOOG) over there. Instead, there are a bunch of investors who want their money back. And this is the company that invented “Mafia Wars.” If we were betting types, we'd say it’s not inconceivable that Zynga’s hard-to-see tiny farmers will trade produce for poker chips.