Zynga 2012 Annual Report Download - page 18

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Some of our games are based upon traditional casino games, such as poker. We have structured and operate
our casino-themed games, including, Zynga Poker, with the gambling laws in mind and believe that playing such
games does not constitute gambling. However, we have begun efforts to expand our business to include RMG.
We recently announced a partnership agreement with bwin.party to develop, test and operate certain real money
online poker and casino games in the United Kingdom. The real money games will be powered by the established
operating platform and software of bwin.party and will operate under bwin.party’s gambling licenses in the
applicable jurisdictions. In addition, in December 2012 we filed an Application for a Preliminary Finding of
Suitability with the Nevada Gaming Control Board. RMG is subject to stringent, complicated and rapidly
changing licensing and regulatory requirements, both federally and in each state, as well as internationally.
Regulatory and legislative developments, including excessive taxation, may prevent or significantly limit our
ability to enter into or succeed in RMG. Becoming familiar with and complying with these requirements will
increase our costs and subject our business to greater scrutiny by regulators in many different jurisdictions.
We also sometimes offer our players various types of sweepstakes, giveaways and promotion opportunities.
We are subject to laws in a number of jurisdictions concerning the operation and offering of such activities and
games, many of which are still evolving and could be interpreted in ways that could harm our business. Any
court ruling or other governmental action that imposes liability on providers of online services could result in
criminal or civil liability and could harm our business.
In the area of information security and data protection, many states have passed laws requiring notification
to users when there is a security breach for personal data, such as the 2002 amendment to California’s
Information Practices Act, or requiring the adoption of minimum information security standards that are often
vaguely defined and difficult to implement. The costs of compliance with these laws may increase in the future
as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may
subject us to significant liabilities.
We are also subject to federal, state and foreign laws regarding privacy and protection of player data,
including the collection of data from minors. We post our Privacy Policy and Terms of Service online, in which
we describe our practices concerning the use, transmission and disclosure of player data. Any failure by us to
comply with our posted privacy policy or privacy related laws and regulations could result in proceedings against
us by governmental authorities or others, which could harm our business. In addition, the interpretation of data
protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these
laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to
region, and in a manner that is not consistent with our current data protection practices. Complying with these
varying international requirements could cause us to incur additional costs and change our business practices.
Further, any failure by us to adequately protect our players’ privacy and data could result in a loss of player
confidence in our services and ultimately in a loss of players, which could adversely affect our business.
In addition, some concern has been expressed in Europe and in certain countries that social gaming should
be regulated to protect consumers, in particular minors and persons susceptible to addiction to social games. This
concern could lead to the adoption of legislation or regulations that may impose additional burdens upon us,
prohibit the offering of our games to certain users or territories, increase our costs or require changes to our
games.
Also, because our services are accessible worldwide, certain foreign jurisdictions have claimed and others
may claim that we are required to comply with their laws, including in jurisdictions where we have no local
entity, employees or infrastructure.
Available Information
Our website is located at www.zynga.com, and our investor relations website is located at
http://investor.zynga.com. The following filings are available through our investor relations website after we file
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