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Australia vows smackdown on social casino apps; JP Morgan cuts Zynga losses

TAGs: Australia, Mitch Garber, Nick Xenophon, Playtika, slotomania, social gaming, Zynga

australia-slotomania-social-casino-doubledown-zyngaIn a recent interview with Marco Valerio for OnlinePokerReport, Caesars Interactive Entertainment CEO and former PartyGaming sockpuppet Mitch Garber said that unlike many in his position, he didn’t view social gaming as a feeder system for real-money gambling. “It’s got, I believe, a different type of customer than the real-money gambling business … I’m quite unsure that, if you wanted to convert those social players into real-money gambling players, I’m quite unsure that the percentage would be great.”

No doubt Garber’s sentiments were at least partly intended to fend off moves by gambling regulators to take a closer look at social casino games, which made great strides in popularity last year. Playtika, which Caesars acquired in 2011, is the company behind Slotomania, which turned out to be Australia’s highest grossing app in 2012. That news has perennial gambling scold and Independent Senator Nick Xenophon promising to introduce legislation to curb the spread of apps like Slotomania, which Xenophon believes are too similar to Australia’s infamous video poker (pokies) machines.

Xenophon says apps like Slotomania are “grooming” children to graduate to real world pokies when they hit legal age but are already shaking kids down for their lunch money via the purchases of virtual credits. “It is laughable to say it’s not gambling because you can’t take your winnings out … If you can lose real money playing online pokies, surely that should be covered [under the Interactive Gambling Act].” Xenophon says he’ll introduce a private member’s bill reclassifying social gaming apps as gambling apps when Parliament reconvenes. Given that Interactive is (allegedly) the only aspect of Caesars Entertainment that turns a profit, them’s fighting words.

Xenophon’s social gaming antipathy goes back to November 2011, when he was complaining about DoubleDown Casino doubling down on poisoning young children’s minds. Speaking of, IGT’s social gaming division just launched a new slot game on Facebook and mobile featuring branded characters from long-running television medical show House M.D. Yes, because when one thinks Hugh Laurie, the first word that comes to mind is social.

Social gamers Zynga may be just weeks away from popping their real-money gambling cherry in the UK thanks to their tie-up with Bwin.party, but the money mirage on the horizon wasn’t enough to keep financial titan JP Morgan from holding onto its Zynga shares any longer. JP Morgan revealed last week in a Securities Exchange Commission filing that it now owns just 2.6m Zynga shares, down from 6.7m in January 2012. It’s not clear when JP Morgan cut its losses, but All Things Digital suggested it was fairly recently, as financial institutions typically file updates with the SEC when their stock in a company dips below 5%, and JP Morgan’s 6.7m shares last January represented a 6.7% stake in the company.

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