From Gaming to Gambling: The Evolution of Social Games

iGamblingOnline gambling, also known as Internet gambling and iGambling, is a general term for playing games using – and with the objective of gaining – real money. Recent years have seen a steep increase in the popularity of social games and browser games, with social media providing a convenient distribution platform for such games but, given the stigma and legal restrictions imposed in some countries, will this pattern be mirrored in the popularity of online gambling?

The company 888 Holdings operates an online portal, offering real-money games such as poker, bingo and sports betting in markets where online gambling is regulated. Thanks to their recent acquisition of Mytopia from Real Dice, was also able to join the social and mobile gaming markets.

CEO Mark Pincus of online social gaming website Zynga has also announced that he is hoping to launch their first real-money gaming products in international markets in the first half of 2013. So it already seems that the next few months will witness an increasing convergence of social and gambling games.

Real Cash it is, Then!

But why are providers of social games so eager to add the cash option? And will it actually meet the wants and needs of players? What do players want? Quality graphics and playability? A social experience? Or just the cash?

The answer seems obvious and, once again, Facebook provides the ideal platform with trust and accessibility. But the advantages of presenting online gambling games on a social platform don’t stop there:

–      Social games do have an addictive factor, but are a lot more enjoyable than playing slot machines in a dark room
–      Social games often feature promotions and bonuses, which can convert to real money
–      The amounts of money placed on social games are usually far smaller, meaning that you get to play more (in terms of hands/rounds) or for a longer period of time

Mo’ Money, Mo’ Problems?

CardsLeading the way as usual, Facebook has now launched online gambling games in the UK. Since September 4th 2012, British citizens who have a Facebook account can play bingo and win – or loose – money thanks to a new app, Bingo & Slots Friendzy.

Julien Codorniou, Facebook’s head of gaming for Europe, the Middle East and Africa, said of the occasion, “Gambling is very popular and well regulated in the UK… for millions of bingo users it’s already a social experience so it makes sense for us to offer that as well.”

While Internet gambling seems to be taking off in the UK, many other markets can pose considerable legal risks, as regulations vary considerably from country to country. However, in April of this year, the French National Assembly followed suit, adopting a bill which officially opened the competition in the online gambling industry.

Very soon, gambling operators established in Malta, London or any other European country will be able to get a license, allowing them to offer online gambling games and sports bets.

In Belgium on the other hand, in order to protect addicted players, the national law limits the loss of cash to a maximum amount of hourly money. This means that when a player has lost this amount, he/she will not be able to place a bet during a certain period. This protection is currently being tested among different operators and it seems like a sensible option for social platforms that include gambling elements, as it allows them to maintain the lighthearted atmosphere.

On the other hand, in the US, where the majority of Facebook revenues are generated, the market for social iGambling is closed, demonstrating that there’s still a high level of resistance to the rise of online gambling and move toward social gaming.

Will Zuckerberg Take the iGamble?

Currently, the top five casino games on Facebook are Texas HoldEm Poker, Slotomania, DoubleDown Casino, Bingo Blitz, and Best Casino which, altogether, account for over 11 million daily users.

Looking at Facebook games overall, we can see that about 20% of gamers have paid for in-game benefits through the network’s virtual currency (introduced in 2011). This means that money made in social games comes from players paying for additional virtual goods and currency to unlock desirable features and demonstrates that these players are already willing to spend money in-game.

Now, considering that Facebook’s social games reach 290 million global active players every month, while the online gambling industry is estimated at a phenomenal $30.3 billion – doing the math is fairly easy.

Gambling on the Future

So what does all this mean? First and foremost it means that over the next year we can expect to see a significant increase in the presence of online gambling games and, with Europe taking the plunge, it’s surely only a matter of time before America begins to dip its toes in the water too.

More interestingly, it seems that online gambling games are being increasingly integrated with social games, making them more accessible via social media platforms. The implication that this will have upon games publishers is huge, changing the way that they make money. No longer will the money change hands on acquisition of the game, but this process will become a part of the actual gameplay itself. This puts more pressure on publishers to develop games that are engaging enough to keep players coming back and spending their money. And who wouldn’t be excited about that?

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