Zynga Deals Another Bad Hand


Kenny Rogers sings about knowing when to fold 'em in "The Gambler," and Zynga (NAS: ZNGA) executives are listening.

The social gaming giant lost another key employee this week. AllThingsD's reporting that former Zynga Poker manager Laurence Toney has left the company. Toney is just the latest in a long line of executives and general managers to leave Zynga.

Toney headed up Zynga Poker for two years before moving over to serve as a general manager in mobile publishing earlier this year.

This is important. As many of Zynga's flagship titles begin to peak in popularity on Facebook (NAS: FB) -- leading key hires to sour on the company -- mobile and gambling would seem to be growth areas at the company.

Zynga Poker -- an online version of Texas Hold 'em -- currently attracts a whopping 39.3 million active monthly users on Facebook. It's the biggest casino game on Facebook. If and when the U.S. eases restrictions on online wagering, Zynga could make a killing. After all, right now it's just virtual coins being bet.

Naturally it won't be that easy. There are plenty of overseas heavies attracting cash players in PokerStars, PartyPoker, and more. Any easing of stateside restrictions would also be a dinner bell to established casino operators and gaming companies that have been gun-shy in the past.

Wynn Resorts (NAS: WYNN) struck the framework of a deal with PokerStars last year -- essentially agreeing to a joint venture if online poker for real money was legalized in this country -- only to terminate the deal a few weeks later. Slot-machine maker IGT (NYS: IGT) killed its online poker operations in Europe last month.

However, all of this will change if the tax-revenue-hungry U.S. changes its stance. It would certainly make Zynga Poker far more lucrative as either a stand-alone operator or a major casino partner. Then again, if those in the know at Zynga thought that this stock-boosting moment was close, would they still be leaving in droves? Of course not.

Zynga, it's time to double down, reprice those stock option grants, and move on before more executives beat you to it.

Playing to win
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The article Zynga Deals Another Bad Hand originally appeared on Fool.com.

Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Facebook and has the following options: long JAN 2014 $20.00 calls on Facebook. Motley Fool newsletter services recommend Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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