Zynga Wants to Get into the Gambling Business

Zynga recently filed a preliminary application for a gambling license in Nevada. We’re not talking about gambling with Farmville credits, either. We’re talking cold hard cash.

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Getting a gaming license is no easy task in Nevada. The paperwork that Zynga filed this week is just the beginning of a process that the company’s executives expect to take between a year and 18 months. During that time, the state will review Zynga’s financial records and decide whether or not its fit to hold a license. Even then, it’s unclear exactly what the world of real money online gambling will hold. Only this year did the Justice Department lift its ban on online gambling, and so far, Nevada is the first and only state to begin issuing licenses to companies offering online poker games. And even then, the license is only good inside the state of Nevada, where there’s more sand than people.

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Zynga’s willing to take its chances. A lot could happen in the next year or so, and there’s been talk of some sort of agreement between states that would open up the market significantly. And new openings in the market is exactly what Zynga really wants. “As we’ve said previously, the broader U.S. market is an opportunity that’s further out on the horizon based on legislative developments, but we are preparing for a regulated market,” said Zynga Chief Revenue Officer Barry Cottle in a statement.

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This could be really good for Zynga. The five-year-old company has been on a bit of downward spiral, lately. With its earnings per user on a steady decline, Zynga’s stock price has plummeted by more than 75 percent, and a number of key executives have left this year. It’s hard to say exactly why people have cooled on Zynga’s games, most of which live in the Facebook ecosystem, but if the company didn’t do something soon, there was a chance that it could be in real trouble, real soon. And what’s the best way to get out of financial trouble? Gambling. At least if you’re on the right side of the table, it does.

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Celebrations planned as Wash. legalizes marijuana

SEATTLE (AP) — Legal marijuana possession becomes a reality under Washington state law on Thursday, and some people planned to celebrate the new law by breaking it.

Voters in Washington and Colorado last month made those the first states to decriminalize and regulate the recreational use of marijuana. Washington's law takes effect Thursday and allows adults to have up to an ounce of pot — but it bans public use of marijuana, which is punishable by a fine, just like drinking in public.

Nevertheless, some people planned to gather at 12:01 a.m. PST Thursday to smoke in public beneath Seattle's Space Needle. Others planned a midnight party outside the Seattle headquarters of Hempfest, the 21-year-old festival that attracts tens of thousands of pot fans every summer.

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

That law also takes effect Thursday, when gay and lesbian couples can start picking up their wedding certificates and licenses at county auditors' offices. Those offices in King County, the state's largest and home to Seattle, and Thurston County, home to the state capital of Olympia, planned to open the earliest, at 12:01 a.m. Thursday, to start issuing marriage licenses. Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

The Seattle Police Department provided this public marijuana use enforcement guidance to its officers via email Wednesday night: "Until further notice, officers shall not take any enforcement action — other than to issue a verbal warning — for a violation of Initiative 502."

Thanks to a 2003 law, marijuana enforcement remains the department's lowest priority. Even before I-502 passed on Nov. 6, police rarely busted people at Hempfest, despite widespread pot use, and the city attorney here doesn't prosecute people for having small amounts of marijuana.

Officers will be advising people to take their weed inside, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress" — a non-issue, since the measures passed in Washington and Colorado don't "nullify" federal law, which federal agents remain free to enforce.

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Colorado's measure, as far as decriminalizing possession goes, is set to take effect by Jan. 5. That state's regulatory scheme is due to be up and running by October 2013.

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Johnson can be reached at https://twitter.com/GeneAPseattle

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Egyptian army orders protesters out of palace area

CAIRO (AP) — Egypt's Republican Guard has ordered protesters supporting and opposing President Mohammed Morsi to leave the area around the presidential palace that has been the site of fierce clashes.

The guard, an elite army unit, gave protesters on both sides until 3 p.m. (1300 GMT, 8 a.m. EDT) to clear the vicinity.

At least five people were killed in fighting between Islamist supporters of Morsi and opponents calling on the leader to rescind decrees giving himself near-absolute power and cancel a disputed draft constitution that is to be put to a Dec. 15 referendum.

Thursday's ultimatum comes in an official statement that also announced a ban on protests outside any of the nation's presidential palaces.

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World's tallest woman dies in China at age 39

BEIJING (AP) — The world's tallest woman has died in eastern China. She was 39.

Chinese state media say Yao Defen died on Nov. 13 at her home in China's eastern province of Anhui.

Guinness World Records in January 2010 had certified her as the world's tallest living woman at 7 feet and 7 inches (233.3 centimeters).

The local Xin'an Evening News did not give the cause of death but said in a report that Yao suffered from gigantism, with a tumor on her pituitary gland disrupting her levels of growth hormone. A government official in her county who gave only his surname, Liu, confirmed Yao's death on Wednesday.

The Xin'an newspaper said Yao learned to play basketball when young, and that she was 6 feet and 7 inches (200 centimeters) tall by the age of 15.

In a Chinese-language video from three years ago, Yao expressed anguish at her unusual height. "I am very unhappy. Why am I this tall?" she said from her bed. "If I were not this tall, others would not look at me like this."

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Cashing in on Gangnam Style's YouTube fame

SEOUL, South Korea (AP) — As "Gangnam Style" gallops toward 1 billion views on YouTube, the first Asian pop artist to capture a massive global audience has gotten richer click by click. So too has his agent and his grandmother. But the money from music sales isn't flowing in from the rapper's homeland South Korea or elsewhere in Asia.

With one song, 34-year-old Park Jae-sang — better known as PSY — is set to become a millionaire from YouTube ads and iTunes downloads, underlining a shift in how money is being made in the music business. An even bigger dollop of cash will come from TV commercials.

From just those sources, PSY and his camp will rake in at least $7.9 million this year, according to an analysis by The Associated Press of publicly available information and industry estimates. But for online music sales in South Korea, he'll earn less than $60,000.

Here's how it works.

YOUTUBE

"Gangnam Style" with its catchy tune and much imitated horse-riding dance is the most-watched video on YouTube ever.

The viral video has clocked more than 880 million YouTube views since its July release, beating Justin Bieber's "Baby," which racked up more than 808 million views since February 2010. PSY's official channel on YouTube, which curates his songs and videos of his concerts, has nearly 1.3 billion views.

TubeMogul, a video ad buying platform, estimates that PSY and his agent YG Entertainment have raked in about $870,000 as their share of the revenue from ads that appear with YouTube videos. The Google Inc.-owned video service keeps approximately half.

PSY and YG Entertainment also earn money from views of videos that parody his songs.

Google detects videos that use copyrighted content. Artists can have the video removed or allow it to stay online and share ad revenue with YouTube. In the last week of September when "Gangnam Style" had around 300 million views, more than 33,000 videos were identified by the content identification system as using "Gangnam Style."

But since YouTube can be accessed from all over the world, wouldn't Asia be responsible for a significant chunk of the $870,000? The countries with the second and third-highest views of the video are Thailand and South Korea.

"Ads rates vary depending on which country the video is played. Developed countries have higher ad rates and developing countries lower," said Brian Suh, head of YouTube Partnership in Seoul.

And the country with the most views of "Gangnam Style?" The United States.

LEGAL DOWNLOADS, CDs

"Gangnam Style" has been downloaded 2.7 million times in the U.S. and has been the No. 1 or No. 2 seller for most weeks since its debut, according to Nielsen SoundScan.

The song sells for $1.29 on Apple's iTunes Store, the market leader in song downloads. Apple generally keeps about 30 percent of all sales, so the PSY camp could be due more than $2.4 million.

How much PSY keeps and how much goes to his managers, staff and record label is unclear. South Korean industry insiders said PSY likely gets 70 percent and YG Entertainment 30 percent for U.S. downloads.

But earnings from downloads in PSY's homeland are far from an embarrassment of riches.

South Koreans pay less than $10 a month for a subscription to a music service that allows them to download hundreds of songs or have unlimited access to a music streaming service. That makes the cost of a downloaded song about 10 cents on average. The average price for streaming a song is 0.2 cent.

PSY's cut for downloads is 14 percent. That falls to 7.5 percent for streamed songs. Yes, 7.5 percent of 0.2 cent. And that's before PSY's "Gangnam Style" co-composer take his share. The biggest cut goes to his agent and online retailers.

According to South Korea's national Gaon Chart, "Gangnam Style" was downloaded more than 3.6 million times and streamed around 40 million times as of November. That adds up to a little more than $61,000.

It's likely the fast fading music CD industry generated even smaller revenue. PSY's 9 percent cut from sales of 102,000 CDs in South Korea would earn him $50,000 or more, according to an estimate by Kim Dong-hyun, a senior manager at Korea Music Copyright Association.

As for many other parts of Asia, illegal downloads and pirated CDS are so pervasive that only a small minority are willing to pay up for the legal versions.

TV COMMERCIALS

PSY has been jetting around the world, performing on shows such as "The X-Factor Australia" and NBC's "Today Show," but such programs usually cover travel costs and not much else, said Gary Bongiovanni, editor-in-chief of concert trade magazine Pollstar.

It is television commercials that are the big money spinner for the most successful of South Korea's K-pop stars. PSY has been popping up in TV commercials in South Korea for top brands such as Samsung Electronics and mobile carrier LG Uplus.

Chung Yu-seok, an analyst at Kyobo Securities, estimates PSY's commercial deals would amount to 5 billion won ($4.6 million) this year.

The money is cool. The products not so much. PSY is now the face of a new Samsung refrigerator and a major noodle company.

THE FAMILY

A fact little known outside South Korea is that PSY's father, uncle and grandmother own a combined 30 percent of DI Corp., a company which makes equipment that semiconductor companies use to make computer chips.

It's a stretch to plausibly explain how the success of "Gangnam Style" will boost DI's profits but that doesn't matter to the South Korean stock market. Perhaps inspired by the pure power of pop, DI shares surged eightfold from July after PSY's hit reached No. 2 on the Billboard Hot 100 and No. 1 on the U.K. singles chart.

It was time to cash in for PSY's grandmother, who sold 5,378 shares for about $65,000.

The share price has fallen since then but is still about double what it was before the release of "Gangnam Style."

PSY's agent YG Entertainment has also done well. Its share price is up about 30 percent since mid-July. The value of CEO Yang Hyun-suk's stake has swelled to about $200 million, making him among the richest in South Korea's entertainment industry.

THE FUTURE

The question now hanging over PSY is whether he will replicate the blockbuster success of "Gangnam Style" or end up remembered as a one-hit wonder.

"When this slows down, what comes next for PSY?" said Nielsen analytics vice president David Bakula. "Is it the evolution of a new musical style, something audiences are going to be craving en masse, or is it something that's just a passing fancy?"

Analysts say "Gangnam Style" alone will not be enough to propel PSY into the ranks of musicians such as Adele and may not even be enough to make him the top-grossing K-pop star. That will depend largely on his upcoming album, which PSY said will be released in March.

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Ryan Nakashima contributed to this report from Los Angeles.

Youkyung Lee can be reached via Twitter: www.twitter.com/YKLeeAP

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Study: Drug coverage to vary under health law

WASHINGTON (AP) — A new study says basic prescription drug coverage could vary dramatically from state to state under President Barack Obama's health care overhaul.

That's because states get to set benefits for private health plans that will be offered starting in 2014 through new insurance exchanges.

The study out Tuesday from the market analysis firm Avalere Health found that some states will require coverage of virtually all FDA-approved drugs, while others will only require coverage of about half of medications.

Consumers will still have access to essential medications, but some may not have as much choice.

Connecticut, Virginia and Arizona will be among the states with the most generous coverage, while California, Minnesota and North Carolina will be among states with the most limited.

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Philippines death toll climbs, hundreds still missing after typhoon

NEW BATAAN, Philippines (Reuters) - Blocked roads and severed communications in the southern Philippines frustrated rescuers on Wednesday as teams searched for hundreds of people missing after the strongest typhoon this year killed at least 283 people.

Typhoon Bopha, with central winds of 120 kph (75 mph) and gusts of up to 150 kph (93 mph), battered beach resorts and dive spots on Palawan island on Wednesday but it was weakening as it moved west.

Hardest hit was the southern island of Mindanao, where Bopha made landfall on Tuesday. It triggered landslides and floods along the coast and in farming and mining towns inland.

Interior Minister Manuel Roxas said 300 people were missing.

"Entire families were washed away," Roxas, who inspected the disaster zone, told reporters.

Most affected areas were cut off by destroyed roads and collapsed bridges and army search-and-rescue teams were being flown in by helicopter.

Power was cut and communications were down.

According to tallies provided by the military and disaster agency officials, 283 people were killed.

Thousands of people were in shelters and officials appealed for food, water and clothing. Dozens of domestic flights were suspended on Wednesday.

The governor of the worst-hit province, Compostela Valley, in Mindanao said waves of water and mud came crashing down mountains and swept through schools, town halls and clinics where huddled residents had sought shelter.

The death toll in the province stood at 160. In nearby Davao Oriental province, where Bopha made landfall, 110 people were killed.

"The waters came so suddenly and unexpectedly, and the winds were so fierce," the Compostela Valley governor, Arthur Uy, told Reuters by telephone.

He said irrigation reservoirs on top of mountains had given way sending large volumes of water down to the valleys. Torrential rain often triggers landslides down slopes stripped of their forest cover.

Damage to agriculture and infrastructure in the province was extensive, Uy said.

STUNNED

Corn farmer Jerry Pampusa, 42, and his pregnant wife were marooned in their hut but survived.

"We were very scared," Pampus said. "We felt we were on an island because there was water everywhere."

Another survivor, Francisco Alduiso, said dozens of women and children who had taken shelter in a village centre, had been swept away.

"We found some of the bodies about 10 km (6 miles) away," Alduisa told Reuters. The only building left standing in his village was the school.

Another survivor, Julius Julian Rebucas, said his mother and brother disappeared in a flash flood.

"I no longer have a family," a stunned Rebucas said.

An army commander said two dozen people had been pulled from the mud in one area and were being treated in hospital.

About 20 typhoons hit the Philippines every year, often causing death and destruction.

Almost exactly a year ago, Typhoon Washi killed 1,500 people in Mindanao.

(Additional Reporting by Rosemarie Francisco and Manny Mogato; Editing by Robert Birsel)

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Typhoon pounds the Philippines, killing at least 7

MANILA, Philippines (AP) — One of the strongest typhoons to hit the Philippines this year barreled across the country's south on Tuesday, killing at least seven people and forcing more than 50,000 to flee from inundated villages.

Typhoon Bopha slammed into the Davao region at dawn, its ferocious winds ripping roofs from homes and its 500-kilometer- (311-mile-) wide rain band flooding low-lying farmland. The storm, packing winds of 160 kilometers (99 miles) per hour and gusts of up to 195 kph (121 mph), toppled trees, triggered landslides and sent flash floods surging across the region's mountains and valleys.

In the gold-mining province of Compostela Valley, the fierce wind and rain forced a wall of mud and boulders to cascade down on a house, killing three children. Their bodies were wrapped in blankets by their grieving relatives and placed on a basketball court in Maparat village.

"The only thing we could do was to save ourselves. It was too late for us to rescue them," said Valentin Pabilana, who survived the landslide.

A soldier died and 20 villagers were missing after a flash flood raced down a mountain in Andap town, washing away a truck, according to Compostela Valley Governor Arturo Uy and military officials.

In nearby Davao Oriental, a poor agricultural and gold-mining province about 1,000 kilometers (620 miles) southeast of Manila, an elderly woman was killed when her house was struck by a tree felled by howling wind, said Benito Ramos, an ex-army general who now heads the government's disaster-response agency.

A man died a few hours later when a tree knocked him down while he was traveling on a scooter on a road in Misamis Oriental province. One storm-related death was also reported on central Siquijor island, Ramos said.

He said the death toll was expected to rise once soldiers and police gain access to some far-flung villages isolated by floods, fallen trees and downed communications.

Regional disaster-response officer Liza Maso told The Associated Press by telephone that she was trying to confirm an army report that a flash flood washed away a truck carrying an undetermined number of people in New Bataan town, also in Compostela Valley.

While some 20 typhoons and storms normally lash the archipelago nation annually, the southern provinces being battered by Bopha are unaccustomed to fierce typhoons. A rare storm that took the area by surprise last December killed more than 1,200 people and left many more homeless and traumatized.

Officials were taking no chances this year, and President Benigno Aquino III made an appeal on national TV Monday for people in Bopha's path to move to safety and take storm warnings seriously.

"This typhoon is not a joke," Aquino said after meeting top officials in charge of disaster-response.

"But we can minimize the damage and loss of lives if we help each other," he added.

Aquino outlined preparations, including evacuations and the deployment of army search and rescue boats in advance. Authorities also ordered small boats and ferries not to venture out along the country's eastern seaboard, warning of rough seas with up to 4-meter (13-foot) waves.

In Compostela Valley, authorities halted mining operations and ordered villagers to evacuate to prevent a repeat of deadly losses from landslides and the collapse of mine tunnels seen in previous storms.

Bopha, a Cambodian word for flower or a girl, is the 16th weather disturbance to hit the Philippines this year. Forecasters say at least one more storm may hit the country before Christmas.

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Associated Press writer Teresa Cerojano contributed to this report.

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Yahoo sees several flaws in $2.7 billion Mexico ruling: source

SAN FRANCISCO (Reuters) – Yahoo Inc believes it has “numerous” grounds to appeal a Mexico City civil court‘s $ 2.7 billion preliminary judgment against the company, including both errors in procedure and in application of law, a person familiar with the matter told Reuters on Monday.

The ruling in the case, which involves allegations of breach of contract related to an online yellow pages listings service, was made by the 49th Civil Court of the Federal District of Mexico City, Yahoo said on Friday.

The case has perplexed many investors and tech-industry observers since Yahoo disclosed it, particularly given the large value of the “non-final” judgment.

The lawsuit was brought by Worldwide Directories S.A. de C.V. and Ideas Interactivas S.A. de C.V. against Yahoo and Yahoo de Mexico, Yahoo said.

The companies could not be reached for comment, although Carlos Bazan-Canabal, who describes himself as a founder of Worldwide Directories, told Reuters via email that he had contracted a U.S.-based law firm to handle the Yahoo case.

He declined to comment further on the matter.

Bazan-Canabal operates a number of web sites. He said on one that he joined Yahoo in 1999, adding that he is a former executive of Yahoo Mexico, and that he helped to launch that company. Yahoo could not immediately be reached for comment on this.

The details of the suit remained unclear on Monday. Documents from local courts in Mexico are not available for public consultation. Yahoo declined to comment.

Yahoo signed a commercial relationship with the two companies in 2002, the person familiar with the matter said. Yahoo terminated the relationship with the companies in 2009, the person said.

Yahoo’s appeal is expected to be heard by a panel of three judges in a superior court in Mexico City, the person said who was not authorized to speak publicly on the matter. It was not clear when Yahoo might file its appeal.

Yahoo’s most recent 10Q filing, which lists major ongoing legal proceedings, makes no mention of the lawsuit.

“We believe the $ 2.7 billion figure appears high based on the seemingly small size of Yahoo’s business in Mexico, but we believe shares could trade off modestly on the news,” wrote JP Morgan analyst Doug Anmuth in a note to investors following Friday’s announcement.

“It’s not clear how the Mexican court arrived at the $ 2.7 billion figure, but it would represent 40 percent of our projected 2012 year-end cash balance for Yahoo,” and equate to about $ 2.30 per share, he wrote.

Shares of Yahoo closed Monday’s regular session down 1.2 percent, or 22 cents, at $ 18.55.

(Additional reporting by Dave Graham in Mexico City and Sarah McBride in San Francisco; Editing by Bernard Orr)

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Court upholds $319M verdict in 'Millionaire' case

LOS ANGELES (AP) — A federal appeals court on Monday upheld a $319 million verdict over profits from the game show "Who Wants to Be a Millionaire" and rejected Walt Disney Co.'s request for a new trial.

A jury decided in 2010 that Disney hid the show's profits from its creators, London-based Celador International. The ruling Monday by a three-judge panel of the 9th U.S. Circuit Court of Appeals found no issues with the verdict or with a judge's rulings in the case.

"I am pleased that justice has been done," Celador Chairman Paul Smith said in a statement.

Disney did not immediately comment on the decision.

The ruling comes more than two years after the jury ruled in Celador's favor after a lengthy trial that featured testimony from several top Disney executives. The company sued in 2004, claiming Disney was using creative accounting to hide profits from the show, which first ran in the United States from August 1999 to May 2002 and was a huge hit for ABC.

The jury found that Celador was owed $269.2 million, and a judge later added $50 million in interest to the judgment.

The appeals court determined the verdict was not "grossly excessive or monstrous" and that it was not based on speculation or guesswork.

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