Zynga Is A Rumored Ongame Buyer
Just days after Shuffle Master abandoned efforts to acquire the Ongame Poker Network from bwin.party, it appears Facebook social gaming giant Zynga may be interested in acquiring the assets.
EGaming Review is reporting that Zynga is considered the front-runner to acquire the Ongame Poker Network which bwin.party says it views as a “surplus asset”. The Ongame Network is currently the fifth largest online poker room according to PokerScout.com and is home to the poker rooms of Betfair, bwin and others.
In March, Vegas-based gaming group Shuffle Master reached an agreement in principal to pay €19.5 million for the online poker network and another €10 million contingent upon there being legal iGaming in the U.S. within five years. The deal fell through last week when Shuffle Master CEO Gavin Issacs said, “It has become evident to us that Ongame’s operations post-acquisition will not achieve the near-term results we initially expected and will require a larger ongoing investment than anticipated.”
Zynga has been battered in the stock markets recently as doubts exist over whether they have what it takes to evolve into a real iGaming company. An acquisition of the Ongame Network could demonstrate to investors that the company is serious about exposing itself to real-money online gaming in the U.S.
Thus far, the rumors of Zynga’s interest in Ongame have done little to boost its stock price woes. Shares of Zynga (ZNGA) are down nearly 3% today while the overall market is up approximately 1%.
Zynga is still reeling from its decision to buy mobile app game Draw Something for $200 million. That platform lost 5 million daily active users in the month following Zynga’s buyout.
Buying the Ongame Network could prove to be a smart little gamble for Zynga. The company has over $1 billion on hand between cash and equivalents and short-tern investments. bwin.party was willing to sell Ongame to Shuffle Master for about $37 million, so acquiring the asset would not dip too significantly into Zynga’s cash stores.
Just to see how powerful Zynga is, take a look at the chart below:
Zynga has been rumored to be in talks with Wynn Resorts for a partnership in Nevada. It could be possible that Zynga views Ongame’s poker software as a possible asset to be used in the future Nevada online poker market. They may also believe their team of Silicon Valley software engineers could improve upon the product substantially enough to lend the network more of the EU-facing poker market.
Whatever Zynga’s reasons for taking an interest in the Ongame Network, it will be an interesting development to monitor.