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Last week, social gaming company Zynga (ZNGA) announced it had filed papers with the Nevada Gaming Control Board in a step towards online gambling. News of this event sent shares up over seven percent, as investors began to focus on revenue potential from a gambling experience.

While Zynga is waiting on the United States to decide its internet gambling fate, it heads to the United Kingdom. In the first half of 2013, Zynga launches its real money games with a partnership from bwin.party. The launch will include Texas Hold'em Poker and Farmville Slots.

Zynga does have the most popular free to play poker game in the United States. Over 33 million people play Zynga Texas Hold'em Poker on Facebook alone. The biggest competitor to Zynga's potential huge online poker revenue could be a familiar one. Pokerstars, which was shut down in the United States, is working on buying a physical casino. The company also plans on launching an online poker site. Pokerstars bought Full Tilt Poker and has a large database of names and should be able to win back players in the United States with legalization of online poker.

The online gambling process for Zynga in the United States could take between 12 and 18 months and means any positive movement shares saw last week is likely to go away. Analysts have been cautious to recommend shares of Zynga as the company's popular games have less users playing and spending virtual cash.

Of the 33 million players on Zynga Poker, it is unknown how many are of legalized gambling age or located in the United States. Zynga will likely have to partner with a US casino to have a smooth launch of its gambling platform.

I see Zynga shares undervalued if it can get approved for online gaming. However, the big question is if Zynga can get approval. Look for Zynga to announce a partnership in the next twelve months. Zynga could make millions of dollars in revenue from its Bingo and Poker games. I think the submittal with the Nevada Board was a huge step and is being undervalued by Wall Street.

Rival company Bash Gaming recently said they made $55 million in revenue from its Bingo Bash game through the sale of virtual coins. Zynga's Bingo game could easily make more than that if players are able to cash out their winnings. Pokerstars will be a huge competitor, but at one time several companies were making millions of dollars from poker players through table games and tournaments.

The other positive news for Zynga last week was a new partnership with Synacor (SYNC). Zynga gains access to 24 million subscribers that Synacor has. Synacor has partnerships with Verizon (VZ) and Charter. Subscribers will see Zynga games directly on their television. The company also launched a new social game in Coasterville, which gives players the ability to design their own theme park with more customizable controls than normal. These two announcements came after Facebook (FB) announced it was loosening a partnership with the gaming company, which sent shares down over 10%.

Shares of Zynga trade at $2.42, and remain down significantly from their December 2011 IPO. In a year's time, shares have lost over 75% of their value. Shares of Zynga priced at $10 in their IPO and actually traded below the double digit mark for several days. In the last year, shares have traded as high as $15.91 and as low as $2.09.

Analysts on Yahoo Finance expect the company to post a loss of $0.03 in the current December fourth quarter. For the fiscal year, analysts see the company earning $0.03, down from last year's $0.05. In the first three quarters of this fiscal year, Zynga has posted a profit of $0.07. In 2013, analysts see the company making less of a profit, with $0.02 expected in earnings per share. At less than $2.50 a share, consider buying shares of Zynga and leaving them untouched for a year. If you're looking for a quick return, the company is not the pick.

Source: Are Zynga Shares Worth Buying For Online Gambling Prospects?