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.