GamesBeat

Delaware’s approval of online gambling will make social game companies perk up

Delaware authorized online gambling today, as the state Senate approved a bill by a 14-6 vote to allow online betting in the state.

The bill narrowly passed the required three-fifths majority. The measure heads to Gov. Jack Markell for his signature. The law is one of the first that shows a turnabout in sentiment about the legality of online gambling, and this change might prove to be interesting to companies such as Zynga that make online casino games such as Zynga Poker, where players cannot bet and win real money, for now.

In December, the Justice Department reinterpreted an online gambling law to allow skill-based gambling games played online. That prompted Nevada to allow it, and it has now led to the Delaware law. The trend could sweep across the nation and make nationwide online gambling legal at some point across the country. That would put the U.S. on part with Europe and generate a lot more tax revenue for states. Federal law limits online gambling to players within states for now.

It could also be a shot in the arm for social casino games, played with real money or with virtual currency. Markell is expected to approve the big since it could lead to the creation of a couple of thousand games. But some are concerned about the social ills that come with online gambling, such as extreme addiction. So the anti-gambling forces could still arise and stop laws in from being enacted in other states.

But the Delaware law could help bring more attention to the legalization of online gambling and that could ultimately lead to more acquisitions of social casino game companies, since land-based casinos are likely to jump into the online gambling market, both for real-money gambling and virtual currency gambling.

Even if online gambling is legalized across the nation, it won’t be a cake walk for social casino game companies, said Sherri Cuono, chief technology officer at PlayScreen, a mobile social casino game startup created in 2010. There are a lot of checks and balances that come into play when states issue licenses to real-money gambling companies. And online gambling companies have to be ready to deal with issues such as fraud.

“You have to treat people’s winnings as if it were money in the bank,” she said.

Lots of companies have moved into the market, and the world shook when slot machine maker WGT bought Double Down Casino, a social casino game developer with 70 employees, earlier this year for $500 million. Even so, Cuono believes we are just at the beginning of interest in both social casino game and real-money online gambling.

“I would put my money on real-money online gambling in 2013,” Cuono said.

[Pictured: screen shot from Playstudios' myVegas free-to-play, virtual currency game myVegas]


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