At the end of last week, Nevada became the first state in the US to legalise online gambling within its borders. Gambling had been effectively outlawed as of April 2011 with major US gambling sites (Full Tilt Poker and PokerStars) being shut down a few months later and millions of dollars frozen in player accounts. Since then, individual state governments have been on a tax offensive, attempting to regulate the industry in a way that brings in revenue for a country recently crippled by the financial crisis of 2008. And now it appears that they may finally cracked it, with Nevada signing this historic bill and New Jersey to follow closely behind.
This new legislation is termed ‘inter-state’, meaning that the bill works across multiple states; but that doesn’t mean that gambling is opened up to anyone. Individual states will have to sign an agreement with Nevada in order for their players to gamble with players from other states. While this does mean that the process of legalising gambling in the US isn’t quite there yet, the momentum will likely pull in several other states over the course of the next year.
So what does this mean for Zynga (ZNGA) and potentially other online casinos/poker rooms, like Full Tilt Poker? Well you might remember that in December 2012, Zynga signed a deal with Nevada for a gambling license; exciting news for investors that saw the stock price jump by 7%. With this latest move, the reality of Zynga breaking the real money gambling market in the States is that little bit more likely; an industry worth billions of dollars each year.