IGT Not Deterred by Zynga Scrapping Real-Money Gambling Plans
In its Q2 earnings report earlier this week, Zynga said it has abandoned its plans to pursue real-money gambling in the U.S. But Nevada-based IGT, which makes both physical and virtual casino games, said its plans are unaffected.
“What Zynga’s finding out is that breaking into real-currency wagers is a difficult thing,” said executive VP Robert Melendres, who heads IGT’s interactive division. “They built their business as more of a causal social gaming business. We are well situated to take advantage of [real money], just as we’ve done in Europe.”
Melendres’s goal is “convergence”: Bringing the experience someone might have playing, for example, a Wheel of Fortune slot machine (which IGT develops and manufactures) with the separately branded games of its social casino product DoubleDown Casino. In addition to getting cleared by regulators, he said part of the challenge is in the gameplay itself: Offering the same odds and the same “thrill” (his word) of risking real money that one gets in Vegas.
IGT acquired DoubleDown for $500 million in early 2012, one week before Zynga announced its now-scrapped casino ambitions. The Facebook-integrated site now offers roulette, blackjack, video poker and 37 slots games, which — like many of the innumerable competing social/mobile casino games — encourage users to purchase virtual currency, which is then what’s (legally) wagered.
According to its Q3 earnings report, the company’s social casino gaming revenue is up 105 percent year over year to $61.4 million, and monthly active users increased 28 percent from 5.2 million to 6.7 million in the same time frame. But Melendres said he is confident that IGT will be part of the “first meaningful wave” of real-money gambling for players in states that have legalized it, expecting to have a foot in the door by Q1 2014.
The real-money online gambling market, which H2 Gambling Capital said currently grosses about $30 billion worldwide, already surpasses other forms of social gaming and is expected to keep growing, as shown in this chart from Betable.