Will Zynga Go All In for Online Real-Money Gambling?

Beleaguered game publisher Zynga (NASDAQ:ZNGA) received some love from investors on Friday. Shares climbed over 6 percent in morning trading on relatively heavy traffic following news that Nevada legalized online gambling within the state. Governor Brian Sandoval described the measure as “the framework that will usher in the next frontier of gaming in Nevada,” and added that it was “critical to our state’s economy and ensures that we will continue to be the gold standard for gaming regulation.”

Nevada’s treatment of online gambling will be critical to the long-term success of Internet gaming companies like Zynga and Glu Mobile (NASDAQ:GLUU), which also climbed over 6 percent on the news. Zynga has pursued online real-money gambling for over a year, and recently announced a partnership with bwin.party to launch real-money games in the U.K. in October.

Many investors see the real-money gambling market as one of the few reasonable roads to prosperity left for Zynga, which has seen its share price collapse 76.6 percent year over year. In December, Zynga filed paperwork with Nevada, seeking permission to conduct real-money gambling within the state, and legalization ostensibly brings the company one step closer to profitability…