Mobile-social game companies are moving fast into real-money gambling by signing up as beta partners with gambling startup Betable.
The San Francisco-based Betable announced today that it has signed partnerships with Slingo, Digital Chocolate, and Murka Games. The news comes two days after Big Fish Games announced that it had launched a real-money gambling version of its Big Fish Casino game in the United Kingdom.
Betable makes it easy for companies to offer real-money gambling, helping them get around years of complicated legal and technical challenges. It offers a license so that they can offer real-money gambling to players on mobile devices or the web, provided the players are in territories where real-money gambling is legal.
“The real-money gaming space is moving faster than anyone could have predicted, and it’s exciting to have industry leaders implementing real money into their games through Betable,” said Christopher Griffin, the founder and chief executive of Betable. “Unlike recently announced IP licensing partnerships, Betable’s developers have the unique advantage of launching their own real-money games that they control. The freedom that Betable provides will be the backbone for innovation in real-money gaming and will allow developers to do what they do best: build great games and acquire users.”
Slingo makes a slots-bingo combination game that is a hit on both the web and in casinos. CEO Rich Roberts said, “Slingo was the first social game to successfully move to real-money wagering in casinos more than 12 years ago. Our agreement with Betable puts us again at the forefront of iGaming by offering immediate engagement with the more than 30 million users outside the U.S. who have played Slingo on Facebook. Most notably, 20 percent of the players who have interacted with Slingo have wagered around the brand, and Betable will enable us to maximize that dynamic.”
“We are already seeing very positive signs that betting mechanics will play a major role in the future success of our social games and Betable lets us get out ahead of the pack,” said Jason Loia, Chief Operating Officer of Digital Chocolate. “The ability to control our own development without needing to get a gambling license made a partnership with Betable the best fit for our real-money gaming strategy.”
“With more than 20 million monthly active users playing Murka’s casino-style games, we know how hungry players are for real-money games,” said Max Polyakov, the CEO of Murka Games. “Partnering with Betable is the best way for us to implement real-money play into future blockbuster titles, as well as existing ones including Slots Journey. We believe that our partnership with Betable will give Murka’s games the best average revenue per user in the industry.”
Founded in 2011, Betable’s investors include Bullpen Capital, CrunchFund, FF Angel LLC, Greylock Discovery Fund, Morado Ventures, Start Fund/DST, Tekton Ventures, True Ventures, Venture51 and a bunch of individual investors.
Here’s how we described Betable in a previous story:
In the U.K., Betable has a license to operate online gambling on a worldwide basis. It has the technology to verify where a user is, and it has antifraud technology that can overcome someone who “spoofs” their Internet protocol address to fake their location. It does so by checking into a variety of records, such as credit reports, bank accounts with real addresses, and voting records. If the location is spoofed, it rejects the user for real-money gambling. But if the user passes and it is legal to gamble in their actual location, Betable permits the gambling to take place.
Here’s one of the clever tricks in dividing the gambling process: The developer creates and builds the front end of the game. Betable’s servers handle the back-end processing. The user sees the front end, such as a slot machine. They bet money and play the slot machine. The game turns over this information to Betable, which then calculates the result of the slot machine play. If the user wins, Betable informs the game and credits their account. If the user loses, Betable deducts money from the their account. Betable handles the payment processing by itself, Griffin said.
This makes Betable’s platform universal. Any game can be plugged into its API and converted into a real-money gambling game. Betable can handle all sorts of games, including bingo, card games, and slots. The game developer simply tells Betable what type of game it has built, and then Betable spits out the right result. Betable can also create new kinds of gambling games through custom mechanics. An example: In a horse-racing game, you could pay real money for virtual goods to raise a proper horse. Then you could enter that horse in competitions and bet real money it would win. If it does, you collect real gambling winnings.
The significance of Betable’s system is huge. As of now, no other company has both a license and the technology to help the entire social casino game industry convert its titles from virtual currency games into real-money gambling games. The conversion process is painless, and the game companies can use Betable to stay within the constraints of territorial gambling laws.
Here’s where the economics matter: Typical social game companies make 10 cents to 20 cents on average per paying user in a month. For Zynga, about 2 percent of its users pay real money for virtual goods, and those paying users spend around a couple of bucks a month. That is why Zynga needs a massive number of users to make decent profits. But real-money gambling players spend $99 to $200 a month on poker games, according to market researcher Playtech. The lifetime value of one of these poker players is about $1,800. That’s a huge difference.
If the social casino game companies can convert some of their players to real-money gambling — in the areas where it is legal — then they could make a huge windfall. Zynga is already a billion-dollar company with virtual goods revenue. If it converted to real money gambling, its revenues could shoot upward.
[Image credits: Fellow Gamblers, Betable]