Zynga shares set to open higher on internet gambling launch
(Reuters) - Shares of Zynga Inc (ZNGA.O) were set to open about 11 percent higher, a day after the online game publisher said it will begin real-money gambling through poker and casino-style games in Britain in partnership with Bwin.party Digital Entertainment (BPTY.L).
Zynga shares were trading at $3.41 before the bell after closing at $3.07 on the Nasdaq on Tuesday.
"We see the launch of these games as an important first step toward what could ultimately become an important source of revenue for Zynga and something that differentiates it from other gaming companies," Needham & Co analyst Sean McGowan wrote in a note on Wednesday.
"ZyngaPlusPoker" and "ZyngaPlusCasino" will be available to British-based gamblers on the Web and as desktop applications from Wednesday.
Analysts also see the launch as a stepping stone to the introduction of real-money gambling online games in the United States.
"Given states like New Jersey recently legalized online gambling, we believe Zynga will likely wait for legalization at the national level, which will allow the company to apply a single, consistent set of rules to all U.S. users," Jefferies & Co analysts said in a note.
Online gambling is growing in popularity in the UK, with mobile games maker Glu Mobile Inc (GLUU.O) launching its first real-money mobile gambling game through UK mobile betting game designer and operator Probability Plc (PBTY.L) last month.
Glu Mobile shares were up 6 percent at $2.77 in premarket trading.
(Reporting by Neha Alawadhi in Bangalore; Editing by Maju Samuel)
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