Zynga gambles IPO cash will last until real-money gaming is legalized

Biz Break: Zynga layoffs may be gamble that IPO cash will last until real-money gaming is legalized - SiliconValley.com: "The San Francisco company is seen as the most ready of Silicon Valley companies to jump into the market for real-money gaming, which is beginning to gear up with bills in Nevada and New Jersey. Zynga applied for a license in Nevada at the end of last year and has begun operating gambling games in the United Kingdom, where such practices are legal. The need for gambling as a cure for Zynga's financial ills was already a topic of conversation when its last quarterly earnings disappointed analysts, with Sterne Agee & Leach analyst Arvind Bhatia telling Reuters then that "We continue to think that any hope for real growth for this nebulous company really depends on what it can do in real-money gaming." That theme continued Monday, when Macquarie Securities analyst Ben Schachter wrote in a note that "beyond some residual value of current franchises, much of Zynga's value is based on the potential for real-money gambling (which is still speculative and the timing uncertain)," along with hopes for big mobile breakthroughs."

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