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International Game Technology, which makes real-world casino games and gambling systems, has agreed to pay as much as $500 million to buy Seattle-based Double Down Interactive, a developer of casino-style Facebook games that don’t involve any actual gambling.

It’s a major deal that underscores the increasingly blurry line between those two worlds. The U.S. Justice Department recently signaled a possible reversal of its long-held position on Internet gambling, raising the possibility of online wagering in some states.

[Follow-up: Real gambling on Facebook? Double Down CEO says IGT deal could make it a reality]

The acquisition by Las Vegas-based IGT is also a big outcome for Double Down, a Seattle-based casual-games company that launched its DoubleDown Casino in April 2010, and has since grown to 1.4 million daily active users. Facebook listed DoubleDown Casino as the No. 4 most popular game on the social network in 2011.

Double Down president Glenn Walcott and CEO Greg Enell.

Double Down, which had about 80 employees as of the end of last year, grew without any substantial outside investment, which means that the deal translates into a windfall for employees and founders.

“Today is like every birthday and Christmas rolled into one for me personally,” co-founder and chief creative officer Cooper DuBois tells GeekWire. “And for the company itself, it is a serendipitous day.”

The companies confirmed the deal in a news release, saying that it will comprise $250 million in cash, $85 million in retention payments and another $165 million cash payable over the next three years, if DoubleDown meets financial targets.

It’s expected to close by the end of March. Double Down will remain headquartered in Seattle after the deal is completed, according to the companies. It’s expected to continue hiring.

IGT reported $1.96 billion in revenue last year and says it will fund the transaction from cash on hand.

The cultural fit with Double Down should be interesting to watch. In an interview with GeekWire last year, Double Down president Glenn Walcott said it didn’t matter to the startup whether or not Internet gambling becomes legal in the United States.

“We’re a social gaming company. We aren’t a gambling company,” he said at the time. “Our games aren’t built to be bulletproof like you’d need to be if you’re a real gambling company. We can do things to make our games more phone that if you were an operator in Vegas you’d go to jail for, because we change the odds just for fun.”

In the news release announcing the deal, Double Down CEO Greg Enell said the company and IGT “share complementary cultures focused on innovation and creativity.”

He continued, “Both companies are committed to providing unrivaled quality, service and entertainment to millions of players. Leveraging IGT’s Research and Development, global reach, and best-in-class content will provide our loyal player base with an even more robust experience and is expected to augment Double Down’s growth trajectory.”

Enell will continue to lead Double Down after the deal closes, according to the companies.

It’s the second major acquisition of a Seattle-based casual games company over the past year. Electronic Arts acquired PopCap Games in 2011 for a much as $1.3 billion.

One of PopCap’s founders, John Vechey, tells GeekWire via email today that he’s pleased to hear the news of the DoubleDown acquisition.

“I think Double Down is a great company and the partnership makes a lot of sense for both companies,” Vechey says. “IGT has great slots and great brands, and Double Down has done an amazing job creating a Facebook slots game and getting a good audience. I’m pretty stoked for both companies and really happy to see a Seattle company with great founders and employees doing well!”

DoubleDown said at the end of last year that it was working on new slot-style and poker games, with plans to expand to tablets, smartphones and smart TVs. Walcott said at the time that the company was positioned to grow its base of DoubleDown Casino players to more than 10 million per month over time. The company currently has 4.7 million monthly active users, up from 3.3 million in October, according to

Even in its short lifespan as an independent company, DoubleDown established a unique culture. When the site hit 1 million daily users last year, executives brought in a mariachi band to celebrate, and then announced that the entire company would be going to Mexico in March to celebrate the achievement.

DoubleDown shares a building with Microsoft co-founder Paul Allen’s investment company, and as the mariachi played on, security guards came up to tell the startup that they needed to quiet things down.

GeekWire’s John Cook contributed to this story. 

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