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Yesterday, during Zynga’s earnings call for the second quarter, CEO Don Mattrick announced that Zynga would abandon its bid to get a real money gaming license in the United States.  This was in sharp contrast to the previous CEO’s statements that the best way for Zynga to grow was to become a fully licensed US poker site.


This change in direction is not liked by players or analysts, but for completely different reasons.  Analysts were ecstatic that Zynga beat expectations with its Q2 results which managed to keep shares at about even for yesterday’s trading, significantly better than expectations.  However, after-hours trading has not been nearly as kind to Zynga as the stock has tumbled 15% and that is predicated on the fact that Zynga is not going after a gaming license in the United States.  It appears that Mattrick wants to completely change course form his predecessor.

This announcement comes on the heels of an even more disappointing fact that daily users of Zynga games are down 45% from last year at this time. Many analysts were hoping that getting gaming approval in the United States could act as a catalyst for the struggling gaming site.  One of the most popular games on Facebook’s branch of Zynga is it’s free play money poker game, but positioning that into a real-money poker game does not meet the focus that COO David Ko and the company thinks is best heading into the future.  This however does nothing to quell the worry from investors about what the next big game or boon is for Zynga.

He did provide some glimmer of hope that years down the road things might change, but that’s small consolation to everyone involved who was hoping for Zynga to be on the cutting edge.  David Ko stated that they were going to continue to monitor how the United Kingdom’s real money gambling apps performed and try to gain as much insight as they can from those ventures.

Players are also going to be exceptionally disappointed as everyone continues to try to think of what the next poker boom is going to be set off by.  With such a large player base on Zynga Poker already they had a perfect opportunity to cash in on that goodwill built up over time.  Players wanted them too as well, because the quality of players on Zynga is generally seen as atrocious, and even if you only get 5% of those players to deposit for real money, that’s a lot of fresh money being brought into the community.  The community hasn’t had that infusion of money since before the UIEGA was passed, and especially since Black Friday happened 2 years ago.

Further, with no debatable or gray area history that some other sites are bridled with Zynga would have had an easy move into the real money gaming with an already large player base, and software that has proven to be able to take the amount of stress that many players can demand.  The software itself isn’t perfect as documented on numerous places across the web, but they do already have a starting point that a lot of rooms do not.  Further, with a clean past, they can really trumpet how they care about the player and are looking out for everyone’s best interest.  This gives them a unique advantage of other sites that operated in the US, but also casinos which are still looked at with a much lower approval rating.

Some analysts are saying that Zynga made the correct move, because there are players in the industry that have an advantage.  They cite Las Vegas casinos knowing the industry better, but this proves how little they actually know about online poker.  Having a brick and mortar room doesn’t mean you will have any kind of success in the online poker realm.  Also, as has been proven already, the software that these new sites are using isn’t great, so a company like Zynga wouldn’t really be behind by any means in that respect. Anyone who is familiar with the industry can easily see that Zynga wouldn’t be at a huge disadvantage, especially because whoever has the largest pool of players will be able to ride that to the top.  Many times it’s just getting that initial smattering of players to join your site, but Zynga has more than just a little smattering.

The other part that many analysts aren’t looking at and even many industry insiders aren’t looking at is the social nature of Zynga games.  Pokerstars has tried to capitalize on this by developing and using Home Games, and they have been able to do a fairly good job with it. However, seeing as Zynga is built on social interaction they can take this to the next level with many offerings that enhance the game for everyone playing.  Making players have more fun at the tables and interact more with one another along with their friends could really take the industry in a new direction and add something that the other sites simply haven’t offered, or at least not implemented near as well as Zynga Poker could.  This new offering could be opening a new door and could possibly appeal to a much wider audience of people who think the game is boring now, and that everyone is just robot sitting in front of their computer screen completely emotionless and faceless.

This might seem like a pure gimmick to a lot of serious players, but trying to keep the grinders happy is less important than trying to get new money deposited onto the site.  The grinder will put up with a lot of things in order to play softer competition, but the weaker competition wants to have fun no matter what.  Allowing players to easily chat, buy things for the table, or have animations on the tables adds that element of fun that other sites don’t have.  It’s not a conventional way of looking at a poker site, but it might just be the right way to look at a site in today’s environment that is laced with negativity and doom.

As for what Americans can hang their hat on now for the next poker boom; no one knows.  With Zynga not pursuing a license, and regulation going much slower than anticipated it’s going to be a long time before something really happens, unless a very surprising turn of events crops up in the coming months.  Until we know though, all players can do is try to rally legislators to make changes, and rally sites to offer what you want to see in a site.

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Andrew Schupick