Play-money poker giant Zynga hinted last week that it conceivably could enter the real money gaming world (i.e. gambling).

The Facebook-facing poker site’s interest might seem reasonable in light of the Department of Justice’s recent re-interpretation of the 1961 Wire Act, limiting the scope of its prohibitions to sports betting. But there is also a more cynical interpretation of Zynga’s announcement.

With its stock price languishing after its initial public offering, Zynga needed a growth storyline that shareholders might believe. I could write more about why Zynga’s announcement may be more of a semi-bluff than a made hand, but an online gaming insider has done that already. Bill Rini asks Zynga Ready For Real Money Gaming or Trying to Hide Failures? 

CZR FTW?
“Poker Poker!”

It feels like we’ve been talking about Caesars going public since before they were Caesars (we have) … but their latest S1/A filing with the SEC suggests not only that CZR really is might be ready to kick it Zynga-style with a big fat IPO … but also that any public offering from the worldwide gambling empire may be in preparation for imminent legalization of US online poker.

While such hefty levels of high finance are still probably a little beyond my ken … you can read the nearly 300 pages of Big Casino corporate speak and decide for yourself. Somewhere in here, I’m pretty sure, is a blueprint for the future of poker and/or online gambling.

At a minimum, I found this snippet on page 7 suggesting that Caesars is getting ready for something big related to online gambling poker:

We believe that additional jurisdictions will legalize online gaming due to consumer demand, a broader understanding of the need to regulate the industry and to generate income through taxes on gaming revenue. As such, we support efforts to regulate the online gaming industry to ensure that consumers are protected. We believe that the potential for online gaming is substantial and believe that we will command, at a minimum, our fair share in any legal jurisdiction. An H2 Gaming Capital study conducted in 2010 projects that the global online gaming market will grow to $36 billion in revenues by 2012. We believe that the largest opportunity in online gaming in the near term is the legalization of online poker in the United States. [emphasis added]

There’s tons more in this document worthy of perusal … some of which I’ve already skimmed. And it doesn’t take much to see how an actual Caesars IPO — not just talk of it — could-well coincide with legalized American online poker hubbub (finally!) reaching critical mass.

Caesars, after all, formerly known as Harrah’s, was a publicly traded company until going private shortly after passage of the UIGEA in 2006. Changed their name to Caesars in November 2010 — the last time they prepped seriously for an IPO (right after their boy Harry Reid won re-election and owed them a favor) only to withdraw plans for a public offering of stock shares right after someone told them the lame-duck online poker Reid bill was just a farce for other political purposes a couple weeks later.

POKER CON? Lo Toney plays his cards close to the vest when questioned about Zynga’s entrée into casinoville and supposed disinterest in the future of real-money online play.

Wall Street is buzzing about a coming Zynga IPO — set for December 15, according to the Huffington Post — and what it may or may not say about social gaming industry valuations and overall US economic health in a more-global internet age. Expected to raise at least $10 billion, this hotly anticipated initial public offering (one born of poker, mind you) could well be the biggest financial news in the history of our beloved little game.

Big Casinos are paying close attention, of course. It’s a fine line these days between social gaming and online gambling, particularly in a multinational economy built on virtual currency. I spoke with Zynga Poker General Manager Lo Toney a couple weeks ago … he wouldn’t make “forward-looking statements” about the IPO, and as per usual denied any interest in the future of legalized real-money online gambling … even as the company announced further steps into the casino world.

Toney had just two big developments to push — Zynga’s second live tournament event (he was really excited about Zynga players getting to compete against newly crowned WSOP champ Pius Heinz) and the opening of the new Zynga Casino … starting with Bingo, remade to appeal to grandmothers and the “younger generation” alike, he says.

But beyond the promo that usually would have little appeal to a grizzled old Poker blog like Pokerati, we did at least get to touch on the recent removal of tobacco (and water bongs) from the Zynga gift shop, my personal addiction to the Zynga Poker iPhone app, and the advantages, challenges, and social responsibilities that come with being able to market your poker (and now casino) games to 13-year-olds.

Have a listen …

Pokerati Interviews Lo Toney
November 16, 2011

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download

Even if Toney is totally sincere about Zynga’s indifference to the possibility of legalized online gambling in the future, brick-and-mortar casinos are still actively trying to emulate Zynga’s social gaming success. No wonder the company appears so well-suited for such a big investment in the next generation of poker player and casino patrons as they come of age.

A lot of people have been wondering where I’ve been this WSOP. I’m ready to admit it — I suffer from an addiction … one that snuck up on me when I least expected, but I can no longer deny. I’m addicted to Zynga Poker. I’m at level 43.

Seriously, not lying when I say I’ve played virtually EVERY DAY of this Series, probably not going longer than 36 hours without logging on — at least to redeem a gift that expires in 1 hour. I’m too embarrassed to be seen playing at the Rio, which is why I stay home … But still, when I am playing, I can’t help but think about the World Series of Poker going on just down the road, on Twitter, on Facebook, on iPhones, via livestream … not to mention the personal text messages and deluge of PR emails … pretty much anywhere with wifi there is Zynga — er, I mean WSOP. To play Zynga you only need 3G.

More…

Just to be clear, Pokerati does not currently work for Zynga (though we’re wondering if maybe we should) …

Zynga should soon be well aware of my sick rungood in their $5/$10 “cash” games.

Continuing its rollout as serious new kid on the online poker block that is simply too big to be ignored … Zynga has acquired Poker Table Ratings, a Texas-based web-op that challenges current online poker Terms of Service with what technology and a legally enforceable free flow of information allow them to do.

PTR has also proved a key player in issues of online poker security for what their database can reveal not just about individual players, but site trends overall. According to Zynga:

The team’s experience and deep knowledge of the online poker industry will be invaluable as we work together to build out cutting-edge features and further enhance Zynga Poker.

However, Zynga goes on to specify that this acquisition of PTR parent company, MarketZero, a 16-person company in Austin, is not about taking over PTR, but rather about hiring their talent, who apparently will still own and operate MarketZero’s main website, PokerTableRatings.com.

Zynga has been on a hiring and acquisition spree of late — 11 acquisitions in the past 11 months — having obtained massive financing for expansion in the social media and gaming sectors, with estimates ranging from $180 million to $500 million.

Meanwhile, in presumably unrelated political news that may well someday be very related … a California state senator unveiled a “Do Not Track” bill yesterday — which would require all internet companies doing business in that state to allow users to opt out of any tracking or datamining capabilities.

Sexton: Ever-gracious ambassador.

I’m pretty sure you’re gonna be hearing about Zynga for awhile … not just because I still have lots of pictures and audio to unload from Zynga’s inaugural PokerCon at the Palms last weekend … but because, imho, as plenty of industry stalwarts seemed to recognize, this company that didn’t even exist in 2006 (that oh-so-glorious year of Jamie-Gold-boom-and-UIGEA-bust) has something that every other big-idea “revolutionary” poker undertaking has lacked since, well, PartyPoker.

Have a listen to Hall-of-Famer Mike Sexton, invited to simply share his brand of poker lore while mingling with Zynga players, give his quick take on the relevance of this relatively small little event and the booming company behind it:

Mike Sexton at Zynga Pokercon 2011

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pic by Michele Lewis

Hellmuth: Party crasher?

Phil Hellmuth musta seen something more than just a $100k freeroll going on, too. Whether delivering a “bonus” to Pokercon attendees out of the kindness of his heart or just because his feelings were hurt for not being asked to take part in Zynga festivities, the “poker brat” slipped in as an uninvited (but presumably still welcome?) guest and revealed his presence at the Pokercon final table to a smattering of gasps and boos. When poker’s self-proclaimed badboy tried to educate the fans that they were supposed to boo him, the nice Zynga people didn’t exactly oblige — giving him instead a polite round of applause. You can tell, however, at least a few in the crowd understood the subtext of his unscripted exchange with host Ali Nejad — effectively trying to put PokerStars back in its (2nd) place.

Phil Hellmuth at Zynga Pokercon 2011

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Online baller and live-action unballer Shaun Deeb apparently has heard about my prowess at Zynga Texas Hold’em… where I’ve been killing the 5/10 game on their Las Vegas server. Yep, after giving up on Tilt and Stars back in ’08, I’m back on the online poker horse; and now Deeb apparently thinks he can turn me into a real player. Or maybe a playa?

Clearly I’ve got skillz … But I’m still headed to Deeb’s boot camp this weekend … because as anyone who’s played 1/2 with me recently in 2008-11 can attest, my live-action game might-could benefit from a little tweaking.

Gotta do something so I can hang at the real tables (without needing multiple rebuys) right? Check out the details at LivePokerTraining.com. (Scroll down to get to the goods.)

Laurence Toney didn’t make the Bluff Power 20 even though he runs the largest online poker site in the world. (38 million active players, they say, 7.5 million a day!) I know I know … I didn’t vote for him either … but spoiler alert: probably will next year.

Lo, as he’s known, Zynga Poker’s General Manager, aka @lo_toney, is quite the new mystery man in poker. He doesn’t come from a poker background, he comes from YoVille … one of the original Zynga games (and before that art.com, and before that eBay-Collectibles). While YoVille in and of itself is rather fascinating — seriously, they actually have a YoVille media, and do real-life biz with companies the WSOP could only dream about some day seeing on its felts — what that understanding of true social gaming brings to poker remains to be seen.

Check out the RawVegas interview with Lo …

… via Wicked Chops

I knew early on that Zynga was gonna be kinda a friggin’ big deal, with plans to get even bigger. While just about every other online poker entity has struggled with receding revenues of late, Zynga has seen theirs take off. But how? You don’t even play for real money there (yet) …

In an effort to better understand the secret to Zynga’s success, I went to the Texas Hold’em Poker Facebook fan page for preliminary research, and omg, here’s what I found:

Zynga Poker fans: It’s a good bet that the majority of commenters and likers here aren’t familiar with the phrase “don’t tap the aquarium”.

Yeow. Is this what poker has been missing all along? Power Hours and Free Kitties!?!

So simple, so brilliant … how did PokerStars or Full Tilt not think of it? Forget rakeback, black cards, rush poker, final-table patches, re-entry and cashout tournaments … just give away a few cartoon images and let the people play! And that’s when they rebuy?

OK, maybe I don’t have the Zynga equation down exactly yet, but that’s some of what I’ll be looking into as Zynga’s inaugural PokerCon comes to Las Vegas, March 18-19, at the Palms. I’ll be part of a team covering Zynga PokerCon with Michele Lewis and BJ Nemeth.

More…

Gah, another juicy newsbriefable thingy to speculate wildly on with little information or context when we all could just make a phone call or send an email to find out what’s up) … yet no Poker Beat to break it down.

Anyhow, check it out and decide with minimal information for yourself … Daniel Negreanu, “caught” on webcam via screencap … playing on a site that isn’t PokerStars?

It’s something new called PokerView — which looks like just about any other online poker site except instead of avatars you have webcam video. Very tell-revealing you might think in straight-up play. And Negreanu obviously isn’t making any effort to hide his identity any more than he’s actively trying to promote this new endeavor.

So many stories potentially in play here. Is Negreanu going the way of Hellmuth, Duke, Raymer, and Maven … seeking a new poker home? Does this new site have any connection to PokerStars (the biggest online poker company in the world, save for maybe Zynga)? Could this technology be a major step forward in TOS security, giving a real-time glimpse of who’s really playing and what else might be going on in their seat. Could you mix it with Rush Poker to create online poker’s version of chat roulette? And with that in mind, serious question … how long before people start showing their junk and contend it’s merely a strategic maneuver if your schlong got the other guy to fold?

ALT HED: Show Me Your Nuts

(Thanks, DL, for the tip!) (Shame on you, DL, for trying to play me a chump!)

CONFIRMED: Not a real Daniel Negreanu endeavor.

Here are my thoughts on the most interesting stories in the gaming sector over the past week or so:

1. New Jersey Moves Forward on Intra-State Gaming - Yesterday, Monday, November 22^nd, the New Jersey State Senate passed S490, the succinctly-named “An Act permitting Internet wagering at Atlantic City casinos under certain circumstances and amending and supplementing the Casino Control Act.”The vote was 29-5 in favour. This bill authorizes Internet wagering at AC casinos; it would allow New Jersey residents and persons located outside of the US to place wagers on casino games by means of the Internet. All games that are permissible in a bricks and mortar AC casino could be offered over the Internet under this bill. S490 also provides for the imposition of a tax on such intra-state Internet wagering, monitoring and regulating the Internet offerings, and licensing fees. Now the bill will be taken up by the State Assembly’s Regulatory Oversight and Gaming Committee. New Jersey has elections in November of each odd-numbered year, so there is still considerable time to see this bill through to passage by the Assembly. It is looking more and more like the legislative i-gaming action in the US for the next little while will be at the state level and perhaps not in Congress. [NJLeg.state.nj.us]

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2. Quebec Launches Government Gaming Site - Loto-Quebec’s new Internet gaming site, www.espacejeux.com, went online last week. (It looks terrible, which is to be expected of a government-run casino site.) as of next week, Quebecers will be able to wager up to Cdn$9,999 per week on sundry interactive games. The poker offering will eventually share liquidity between Quebec and British Columbia, but only Quebecers are supposed to be permitted on Loto-Quebec’s site. [Montreal Gazette]

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3. New Zynga Game - Zynga, the popular social gaming developer, released CityVille. I haven’t played yet, but apparently it’s SimCity meets FarmVille. It will go live globally in the next few weeks. More proof that Zynga (and the social gaming sector, more generally) are key things to watch in the gaming industry as we go forward. [TechCrunch]

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4. The Status of Congress – Congress is currently in the lame-duck session between election day and the start of the 112^th Congress in January. Frank Fahrenkopf, President of the American Gaming Association and as keen an observer of the gaming industry in the US as anyone, said during G2E in Las Vegas last week that he doesn’t see online gaming legislation passing during the lame-duck session, but he left open the possibility that Internet gaming legislation could pass. No surprise, but Rep. Shelley Berkley (D-NV) thinks that, if anything passes during the lame-duck, it may be limited to legalizing Internet poker only: [Las Vegas Sun; Las Vegas Review-Journal]

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5. Las Vegas Cut-and-Paste Lawsuits - Righthaven LLC is a firm in Nevada that has sued dozens of parties over posting content on the Internet from the Las Vegas Review-Journal. Some have alleged that Righthaven’s actions have been abusive. Comes now Righthaven with an indication that it will narrow its litigation campaign after a Nevada judge ruled that a realtor’s use of part of an LVRJ article constituted fair use. (The realtor reproduced 8 sentences of a 30 sentence news article on his blog.) See: http://www.scribd.com/doc/39767798/Righthaven-v-Realty-One-Order This is fascinating enough by itself, but the Nevada attorney who is a principal of Righthaven (Steven Gibson) is the same lawyer that is a member of the law firm Dicknson Wright PLLC, an international law firm with a respected gaming practice and now with a Las Vegas office. [Wired]

Attorney Stuart Hoegner regularly follows international gaming law; you can follow him @GamingCounsel on Twitter.

I know that these past few days everyone’s been talking about Jonathan Duhamel’s triumph in the November Nine. Sadly, I wasn’t in Las Vegas for it and it has been covered much better than I ever could elsewhere. In lieu of that, here are my thoughts on some of the interesting legal developments in gaming over the past week:

1. American Midterms (Part I) - Top story last week & top 2 stories this week. As expected, the Democrats lost control of the House of Representatives, Representative Boehner will be the next Speaker, and Senator Reid kept his seat and his job as Senate Majority Leader. (Aside: great article here on how Reid pulled it off.) What does it all mean? It’s too soon to say. I continue to think that the general trend towards legalization in the US will continue and that, if nothing passes during the lame duck session of Congress, there may be more going on in intra-state gaming in the coming year than in Congress. However, it may be that a new bill (sponsored by Senator Reid) could be passed during the lame duck and legalize poker. Keep watching. [Examiner; Poker News Daily]

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2. American Midterms (Part II) - During the midterms, there were many races and referenda addressing local gaming issues. There’s a great summary of many of them by Sarah Klaphake Cords at Casino Enterprise Management here.

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3. Tzvetkoff Squirrel Funds - This is a story that’s been followed by those in online poker for months. Daniel Tzvetkoff created a payment processor in Australia called Intabill. He is alleged to have defrauded several Internet poker operators and was arrested in Las Vegas earlier this year on money laundering charges, among others. Most seem to think that he’s co-operating with federal authorities. Now come allegations that funds from the payment processing business were squirreled away in a payday lending company in Las Vegas called Hugo Services. Apparently some $50 million are at stake. If true and if the federal government hasn’t already seized it, Daniel’s and Intabill’s creditors can be expected to make a move against it to try to recoup some of their losses. [Courier and Mail]

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4. Increase in Polish Internet Gambling - In case any more evidence were needed that banning Internet gambling doesn’t reduce its incidence, apparently Poles will have gambled away 20% more by the end of this year than they did in the year in which Internet gambling and advertising was outlawed in Poland. [Warsaw Business Journal]

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5. Zynga on the Go - These guys have been in the press a lot lately, and especially in the past week. First came news that Zynga Game Network’s estimated worth exceeded video gaming giant Electronic Arts’s market value. (Apparently, Zynga is worth $5.5 billion.) Now Zynga is being touted as a player in mobile gaming. It already has a Texas Hold’em game available on Facebook that supports 6 million users daily. More proof that the next wave of gaming is already underway and will involve social media and mobile gaming. Watch these guys and other players in this developing market. [Online-Casinos.com]

Attorney Stuart Hoegner regularly follows matters of international gaming law; you can follow him @GamingCounsel on Twitter.

In last Friday’s twitfeed, my favorite tech-biz site Tech Crunch tweeted about their post  “Is Zynga Trying To Patent Virtual Currency?” Apparently, the leviathan of multiplayer gaming networks — and big wildcard in the future of real-money online poker — filed a US Patent Application in March of this year in an effort to corner the virtual currency market.

At least that’s my take. After reading the actual legal document, “Virtual Playing Chips in a Multiuser Online Game Network”, I gather what they are really trying to do is define and patent the purchase and flow of “Non-Redeemable Virtual Currency” as it pertains *specifically* to gambling on social networks.

 

click to enlarge

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Internet super-behemoth Google seems to be wasting little time positioning themselves to profit from licensed internet gambling in the United States by investing in “social gaming”.  Both the New York Times and Techcrunch are reporting that Google has agreed to purchase “Slide”, a software development company specializing in Facebook apps involving the exchange of virtual money.

Sale price estimates range from $182 million to $228 million (in real money). Supposedly, Google will officially announce the acquisition tomorrow.

This follows last week’s quiet confirmation from Google CEO Eric Schmidt about their partnership with Zynga – clarifying speculative reports in July that Google had “secretly” invested $150 million or so in the enormous play-money poker site.

With a current user base of 28 million budding poker degens at the ready, Zynga is primed for real-money poker with their popular Facebook app Texas HoldEm Poker. You can read more about Zynga’s interest in HR 2267 from Business Insider: JACKPOT FOR ZYNGA: Congress Wants To Legalize Online Gambling.

Conveniently, Zynga uses PayPal for a method of payment (and happens to be PayPal’s biggest client).  This method of payment — turned off years ago for anything related to gambling — could be ideal for a would-be internet gambling licensee under HR 2267 with Barney Frank’s Manager’s Amendment, which prohibits credit card transactions for gambling should his bill become law.

It’s here … the debate we all wanted in 2007, 2008, and 2009 is finally happening. And all signs point to good-for-poker. But we might wanna be careful what we wish for … not sure exactly how it’s gonna play out, but even if the laws we champion get passed post-haste it won’t be like we’re suddenly back in 2006, time-warped to an era when Jamie Gold was the only thing bad about poker. Ahh, the innocence …

Even as online gambling legislation that would effectively make online poker fully legal moves forward, so many different interests will be fighting to have things worded their way …

ABCNews.com gave today’s hearing in the House Ways and Means Committee some significant real estate … and in general the mainstream media has been chirping. Expect the chatter to increase as June 1 approaches. We’ll see if and when online gambling — and specifically poker — become something more than a side-snippet across the multiple channels of CableTalk TV.

Still, with this most recent movement on the McDermott bill — a little 2-hour committee hearing — we got one big step closer to the day when all those 10s of millions of Zynga poker players suddenly begin to play for real money.