That was one of the topics debated at the Social Gambling Conference in London on Friday. The discussion put the real-money online-gambling companies at odds with the makers of non-gambling social casino titles, where users pay for virtual goods (such as poker chips) but are not allowed to cash out their winnings.

The panel, moderated by Stuart Tilly, director of a new group dubbed the Social Gaming Association, produced some fireworks at the first-time summit in London on Friday. Tilly’s group is a new association representing the non-gambling social-casino-game companies.

Jez San, president and founder of real-money gambling firm PKR, said he does not believe that gambling regulators should force social-casino-game enterprises to comply with responsible-gaming regulations.

But San (pictured above in blue on the far left), who spent two decades in the non-gambling video-game business and participated in the real-money gambling industry for the last six years, said that the social-casino-game industry should voluntarily submit itself to its own self-regulation.

“I don’t believe social games should be regulated. But I do believe the providers of the social games should take a more responsible attitude than they are currently taking,” San said.

He said the most important thing is that the social-gaming outfits should allow individuals to impose their own limitations on how much money they can spend in a month. The people behind real-money online gambling experiences must currently do so in order to show they are taking responsibility for the possibility that addicted players might overspend.

San said that he doesn’t want to see a newspaper like the (tabloid) Daily Mail write a profile of a single mother who lost all of her money playing casino-like social pastimes on Facebook. If the industry doesn’t impose its own regulations, it will inevitably face more strict government regulation in the future. If social-game companies (such as Zynga) do not self-regulate, they could make the whole industry look bad when the inevitable addiction problems surface.

“We don’t want to be profiled as having ruined someone’s life or bankrupted a single mother who can’t pay the bills,” San said. “We act in a very responsible manner. We don’t allow minors to play, and we don’t allow the vulnerable to play. The social gaming world doesn’t acknowledge such problems and would like to put its head in the sand and pretend that it’s a free world and people can spend whatever they want.”

Andrew Hughes (pictured left), chief executive of social-casino-title firm AbZorba Games, was on the other side of the discourse.

“There is a lot of debate still to be had,” he said. “I don’t think regulation should happen now. It’s too confusing … First, it is entertainment. You do not have to play. About 98 percent of my gamers never pay a single cent. They can earn chips looking at advertisements. Nobody can take the monetary value out of our game.”

Consumers can self-regulate now, and Hughes said voluntary self-regulation is fine. So in that sense, he agreed with San. But he would not grant that the social-game companies try to get people addicted. He noted that, among paying players of social casino titles, only 7 percent of them ever buy anything.

San said that average revenue per paying person is misleading, given that a small amount of gamers account for a large amount of sales. Hughes returned to the fact that it is clear in his releases that the play is just for fun.

San added, many of the social-game firms will not impose limits because “their job is to find whales” (people who spend a lot of money on social casino efforts, sort of like high rollers in Las Vegas) and then get them addicted.

“Can we keep it to social gaming,” Hughes asked. “We are not talking about social gambling. Social gaming is about a free experience.”

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Real-money online gambling is illegal in most states in the U.S. — except when it comes to live horse racing. Gamblers can bet on the horses via online web sites. But now Churchill Downs’ Luckity.com subsidiary has started a number of casino games — such as daily jackpots and slot machines — in which players can put down real bets and win cash prizes.

They do so by placing bets on horse races that are disguised as casino games. You are really making a bet on a horse race, but Luckity may have reskinned that contest to look like a a slot machine game.

The Luckity.com games are legal because federal law allows interstate gambling on horse races. When you place a bet in a game on Luckity.com, it is put into a wagering pool on one or more live horse races that are occurring (24 hours a day, all over the world). The outcome of a horse race becomes the way to resolve how a particular bet turns out, either as a win or a lose.

“The horse race is our random number generator,” said Eric Hartness, the vice president of marketing at Luckity.com, in an interview with GamesBeat.

Technically, you’re still betting on horse races through Churchill Downs’ online horse racing gambling site, twinspires.com, based in Mountain View, Calif. That’s how Luckity.com stays within the law. But it dresses the bets up by disguising them as casino games, which have wider appeal. The online gambling business is licensed and regulated in the state of Oregon. With this kind of betting, bettors have to put down money in advance, known as advanced deposit wagering.

Players can bet real money and win cash prizes. It may sound illegal, but it’s not, Hartness says. The idea of Luckity.com is to extend online gambling beyond those interested in horse racing to a broader market. While horse racing is more interesting to males, the broader games on Luckity.com are targeted at older women and others who like casual games.

Horse racing is popular, with races taking place around the world at all hours. But sometimes you’ll have to wait for another race to start. So the experience of playing games on Luckity.com is not like an instantaneous slot machine. In that sense, Luckity.com may have trouble satisfying players who want instant gratification. On the other hand, you can bet real money on it — something that you can’t do in most states.

The payouts can vary widely. Right now, the challenge is convincing gamers that the gambling is legal. The site has 24 cash-based games, with more on the way. Churchill Downs Interactive president Ted Gay said the company has worked on the technology for months.

Churchill Downs has about 2,000 employees, while the Louisville, Ky.-based Luckity division has six dedicated employees. While Zynga wants to enter the real-money gambling market, it cannot yet legally do so. But if the online gambling laws are changed, as some in Congress want to do, then Luckity will have a lot of new competition. Luckity has pplied for a patent on the technology.

Check out Luckity’s videos below.

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Online casino games are hot. So much so that we’re renaming our site Casino GamesBeat. Just kidding, but The United States Playing Card Company (owner of the Bicycle playing card brand) and Digi117 aren’t. Those two companies are partnering to form Zeniz, a mobile social casino game platform.

Together, they will launch the Zeniz Social Casino platform for iOS (iPhone, iPad, and iPod Touch) and Android this spring. Casino games are the rage, according to a first-quarter acquisition and investments report by Digi-Capital. Just yesterday, Playsino announced it had raised $1.5 million.

The United States Playing Card Company is based in Erlanger, Kentucky, and is a subsidiary of Jarden. Vancouver, Canada-based Digi117 is a mobile strategy agency. Their Zeniz Social Casino will operate under a freemium model, where you can play casino games for free and pay real money for virtual goods such as virtual currency.

They plan to launch a new casino game for the platform every two months, eventually creating a full suite of casino games. Zeniz will be a social gaming network that is like a shell, with a Main Stage, where players can engage with mobile games before entering branded game rooms.

“Our product is more than just another poker app, it’s a virtual casino: one lobby with digital entertainment as well as many games,” said Marc Hill, president of USPC.  “The platform is targeted to social gamers with high-end graphics optimized for mobile devices and tablets that bring together critical game attributes and branding opportunities that don’t exist in any other mobile game application. Our platform introduces new technology and exciting new ways to play casino games in both single-play and social-play modes. ”

USPC is the largest provider of playing cards in North America and owner of the Bicycle, Bee, and Aristocrat playing card brands. The company is moving into digital and repositioning itself for a new generation of consumers. That’s a big step for a company that has been in business for 125 years.

“We are excited to be partnered with USPC and feel lucky to be involved with a visionary like Marc helping to implement the USPC digital strategy,” said Vadim Chernega, president of Digi117.  “After designing, developing, and promoting over two hundred mobile applications with millions of downloads, we feel confident our experience will make this game a winner.  We have some of the most talented designers, and we have launched a new-to-the-world social gaming concept.”

The company isn’t yet describing any of the digital games.

“As entertainment becomes centered on digital, we know we have to offer our customers a new way to play,” said Hill. “Our vision is to leverage our heritage and develop a revenue-generating social gaming company to compete in the mobile application space.”

[Photo credit: Andreas Rueda, Flickr]

Mobile Deluxe is launching its Big Win Blackjack game today on the iPhone, iPod Touch, and iPad. In any other time, that wouldn’t be very exciting, and game developers would scoff at it.

But anything that has to do with online casino games these days is hot, and it might be possible for Mobile Deluxe to cash in on this trend. By layering a new business model (free-to-play games where users play for free and pay real money for virtual goods such as casino chips) and a new broad-reach platform (Apple’s iOS), casino game makers are going through a renewal.

Stranger things have happened. Who would have thought, for instance, that a social poker game would put Zynga on the path to a billion-dollar initial public offering and a $10 billion valuation? And the Justice Department’s reinterpretation of a law in December paved the way for the legalization of online gambling. That pumped up Zynga’s stock and led to some interesting deals, such as International Gaming Technology’s $500 million purchase of Facebook casino game maker Double Down Interactive.

Mobile Deluxe, based in Santa Monica, Calif., has been making games since 2003 and has grown to 30 employees without any outside money. The Big Win Blackjack game is a free-to-play title with touchscreen controls and tournament play. Players can take on multiple hands at a time, and the app teaches you how to improve your skills. With the Professor Blackjack mode, for example, you can learn the basics of the game and how to count cards.

“With Big Win Blackjack, we’ve created a game that will captivate the most experienced players and those playing for the first time,” said Josh Hartwell, the company’s chief executive. “It teaches users everything they need to know about the game with premium graphics and fluid game play.”

The casino is ad-sponsored. Players can spend real money on additional chips and pay their way into high-limit rooms. Mobile Deluxe’s Solitaire Deluxe game has been downloaded 6 million times.

Game developers can laugh at this simpleton game creation. And there are tons of rivals out there, all of them copying each other in some fashion. On mobile platforms, Playtika has risen to prominence with Slotomania, and FishSticks Games has gathered an audience for Slots Journey.

But what if Mobile Deluxe uses this casino game frenzy to earn itself a big valuation and then climb up the food chain, using the casino game money to finance higher value games? Who would be laughing then?

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Seattle-based Big Fish is girding itself for a battle in the casual casino gaming market, where the combatants include Zynga (which is launching a number of casino games such as Zynga Slingo and Zynga Bingo to supplement its Zynga Poker game) and International Game Technology, which paid $500 million for Facebook casino game maker Double Down Interactive.Electronic Arts’ PopCap Games division also entered the fray with its Lucky Gem Casino collection of games.

Self Aware’s 23 employees will join Big Fish Games’ more than 500 employees. The value of the deal wasn’t disclosed. Bill Lee is the founder of Social Concepts, and Self Aware’s founders are Colin Liotta and Seppo Helava. Oakland, Calif.-based Self Aware is the creator of Card Ace: Casino (pictured at top). the No. 1 grossing casino game on the App Store. The newly acquired studio will remain where it is and will become the first outpost of Big Fish Games in the San Francisco Bay Area.

Self Aware Games is working on a new location-based mobile online game platform. Its initial iPad title is called Fleck Touch. Self Aware is focused on free-to-play mobile games, where users play for free and pay real money for virtual goods.

In an interview, Big Fish Games founder and chief strategy officer Paul Thelen said that the casino market is booming because such games are a lot more social than other titles and that makes them popular on the fast-growing mobile and social networks. He said that Self Aware has developed its own Card:Ace game for Facebook and will launch it in the second quarter. Lee said in an interview that the hookup with Big Fish Games will allow Self Aware to become a much bigger player in social and mobile games, which he said are still in an early stage.

The unspoken part is that the game publishers are also positioning themselves for an opportunity in online gambling. Interest in the topic has been brewing since the Obama administration’s Justice Department ruled in December that online gambling was legal, as long as it was not sports-related, which was specifically prohibited in prior law.

The ruling reversed a long-standing position that said the 1961 federal gambling law extended to Internet gambling; now the Justice Department has given states the green light to create intrastate online gambling systems that don’t include sports betting. And states, such as Nevada, are starting to take steps to explicitly legalize online poker and possibly other games. That gives online gambling companies the right to set up poker games for players in Nevada, but the states need to create interstate agreements to allow gambling across state lines. The ball is rolling on that front, but there may be a patchwork of states for a while where online poker gambling is legal. So there is some renewed hope among the companies eyeing this market that country-wide online gambling might happen at some point in the future.

Thelen said that might be an interesting future opportunity, but the laws in various states and on the federal level are still not entirely clear. Once it becomes clear, then Big Fish Games will weigh the opportunity. In the meantime, the non-gambling social gaming market is plenty interesting to Big Fish Games, he said.

That was enough to lift Zynga’s stock price in January, and the company’s stock price closed on Monday at $13.97 a share, up from its IPO price of $10 a share. Zynga has said that it is in active conversations with potential partners to better understand and explore the new opportunity.

Big Fish Games was founded in 2002 and it saw organic growth of 30 percent in 2011, which was its ninth consecutive year of record revenue. The company has more than 2,500 games across PCs, Macs, smartphones, and tablets. Big Fish Games owns more than half of the titles, while the rest are produced by third-party developers.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Ever since the Justice Department opened the door to the legalization of online gambling, the leading creators of social games are feeling increasingly lucky. PopCap Games just launched Lucky Gem Casino with a collection of seven slot machines themed after its brands such as Bejeweled and Zuma. It marks the entry of the Electronic Arts subsidiary into the increasingly active casino game market.

Leading Facebook game publisher Zynga is adding Bingo and Slingo to its Zynga Casino family, which already features the most successful Facebook Poker game with more than 30 million active monthly users. Traditional gambling companies are quickly moving into the market as well. In January, slot machine maker International Game Technology acquired Facebook casino game publisher Double Down for $500 million.

The current crop of luck-based Facebook games are legal in the US because there is no way to cash out the virtual earnings. In Lucky Gem Casino players can purchase additional coins for real money, using the Facebook Credits system. But even if they hit the jackpot, payouts occur only in virtual currency and can’t be converted back into cash.

The big prize for social game makers could arrive when more states follow Nevada’s example and legalize online gambling, a move made possible after a Justice Department ruling in December that allows online betting as long as it does not involve sports. Companies who have already gathered large player communities could see revenue boosts if social game platforms allow money payouts.

Though the initial release version is limited to slot machines, PopCap pledged “to evolve Lucky Gem Casino to enhance the experience, add more games [and] community features” — which sounds a lot like the ideas behind Zynga Casino. PopCap VP Dennis Ryan also promises they will be “enlivening traditional casino games with our franchises,” as seen in the Bejeweled Spin slot machine. All of a sudden, a Plants vs. Zombies poker table doesn’t seem quite such a far-fetched idea.

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GamesBeat 2013 is our fifth annual conference on disruption in the video game market. You'll get 360-degree perspectives from top gaming executives, developers, and analysts on what’s to come in the industry. Our theme this year is “The Battle Royal.” Check out full event details here, and grab your early-bird tickets here!

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Slot machine maker International Game Technology said Thursday it will buy Double Down Interactive for $500 million in cash. Double Down, based in Seattle, makes Facebook games such as the DoubleDown Casino.

Publicly-traded IGT is branching out into new types of casino gaming. DoubleDown Casino had more than 1.4 million active daily players at the end of 2011 and was No. 4 in terms of the most popular games on Facebook in 2011. DoubleDown Casino, launched in April 2010, has 4.7 million people playing games each month, up from 3.3 million in October.

With money from IGT, DoubleDown Casino plans to release more social and mobile games. Double Down Interactive has 70 full-time employees and 10 positions open. IGT said the move will propel it into the leadership of social gaming, and it comes at a time when Zynga is beefing up its own casino game business on Facebook.

NVPR introduced the two parties, with the Raine Group and Davis Wright Tremaine finalizing the transaction. The deal includes $250 million in cash, $85 million in retention payments over the next two years, and $165 million in bonuses if Double Down hits financial targets.

Greg Enell is chief executive of Double Down and he will continue to lead the business, which will stay in Seattle. IGT had sales of $1.96 billion las year.