Described as “Second Life meets Farmville meets Las Vegas,” Chumba World is a first-of-its-kind social casino sandbox. Players can build their own digital Bellagios, customize their avatars, and even create variations of slot machines and table games, including Blackjack, Roulette, and Video Poker. They can then host other players and share their creations, or embed them into their own websites and blogs, potentially earning real cash through a traffic-based revenue share with the Chumba platform.

In a recent email to GamesBeat, Virtual Gaming Worlds CEO and founder Laurence Escalante explained how the system works. “Players are able to make money off their casinos, yes, even on the virtual money play going through their casinos. As with all social casino games, people are able to purchase currency to play, although winnings can’t be cashed out. But as players get more traffic (friends, followers, etc.) spending virtual currency at their casinos, we are able to calculate the currency flowing through their casinos and pay them a small revenue share as real or virtual money.”

Although the MMO is nearly finished, VGW is asking for $50,000 on Kickstarter to get it over the finish line. “Though we’ve raised money from private investors here in Australia, to complete much of what we’ve done to date, a platform/MMO/casino undertaking of this size is pretty ambitious and requires a lot of resources,” said Escalante. “The Kickstarter campaign will help us with some tangible financial support to help us finish it (which is always welcome of course, being a relatively thinly funded startup in this space), and help us build community momentum.”

More importantly to Escalante, the crowdfunding campaign will allow his team to get feedback from a potential player base on what content they’d like to see in the MMO. There are currently eight games available, according to VGW, and more are in development, including Poker, Bingo, Keno, and Baccarat.

If the developer reaches its Kickstarter goal, it says it will release Chumba World within six months of the campaign’s close.

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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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Koolbit has flipped the switch on its mobile casino games, and they are now available as real-money online and mobile-gambling titles in the United Kingdom.

The company released its first social mobile casino games — where players can purchase virtual chips but can’t cash them out — last year and grew an audience. But it sees more disruption and financial gain in adding the ability for players to bet real money and cash out their winnings. As such, it is a part of a growing number of game startups that are breaking down the walls between social-networking games and online gambling.

Gerard Cunningham (pictured right), chief executive of San Francisco-based Koolbit, said in an interview with GamesBeat that his company has launched a full suite of gambling casino games at a new website, iGoSlots.com, accessible via the Web or mobile devices. The offerings feature an HTML5 foundation, the lingua franca of the Web. Koolbit made the site in partnership with Cozy Games, and it has a license for gambling on the Isle of Man.

“We’ve taken a mobile first approach with the design, but you can play it in a Web browser anywhere,” Cunningham said. “We’ve had virtual goods casino games running for nine months now, and we’re now going to have the biggest real-money mobile casino network with 25 games.”

Koolbit will continue to operate City Slots, its flagship suite of casino games, as a separate virtual-currency mobile and Web experience. City Slots is regularly ranked in the top 20 on Google Play’s Cards and Casino Games page. That is part of a $3 billion social casino games market. But with iGoSlots, Cunningham said his company will move into the $44 billion real-money online-gambling market.

The iGoSlots.com site is open for registration in the U.K. today. It has 25 titles, including slot machines, scratchers, roulette, blackjack, video poker, and bingo.

Cunningham, a former executive at online horse-race betting firm Betfair, founded Koolbit in 2011 to focus on mobile casino games. He will give a talk at the ICE real-money online gambling conference this week.

Koolbit has 12 employees. Rivals in online gambling include William Hill, Bwin.party, Betfair, and Paddy Power. In social casino games, Koolbit has lots of competitors, such as Big Fish Games and Zynga.

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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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The French don’t want to be left out of the real-money online gambling opportunity. French social casino game startup Mandala Games said today it has teamed up with gambling startup Betable to offer real-money gambling versions of Mandala’s social casino games.

The San Francisco-based Betable previously announced 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.

“We believe that real-money gaming will help us grow to become one of Europe’s largest social gambling game developers,” said Nadya Jahan (pictured below), founder of Mandala.“Thanks to our partnership with Betable we will be able to tap into this opportunity quickly, allowing our team to stay focused on what we are dedicated to: designing cutting-edge games.”

Mandala will launch its Slots by Mandala social game with Betable integrated into it in the coming weeks. That will enable players to play Mandala’s slot game for real money in the United Kingdom.

“Our partners can be based anywhere in the world, and we’re happy to welcome Mandala Games as the first European developer on the Betable platform,” said Christopher Griffin, the founder and CEO of Betable. “The quality of Slots by La Riviera is impressive and appeals to a demographic that we believe will make their game a huge
success.”

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.

Mandala recently launched its La Riviera slot machine game on Facebook. Jahan has become something of a celebrity in France, where she was in the first season of the reality web Les Influencers (The Influencers). The show will air on a weekly basis and follow seven online entrepreneurs.

Jahan founded the self-funded company in 2010 with a goal of bringing the “French touch” to social games with high-quality visuals. The company has around 12 employees.

Rivals include Playtika-Caesars, Double Down Interactive-IGT, Zynga, and others. This genre market is hot in part because of expectations that the legal barriers between online gambling and social casino games will come down in the U.S. in the future. On top of that, such titles with a free-to-play business model are proving to be very popular on Facebook.

As an fyi, I’m going to give a talk at the Social Gambling Conference in London on Nov. 16.

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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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It’s about time somebody fused the worlds of games and casinos.

Betable hopes to disrupt a hot segment of the game business by breaking down the walls that currently separate real-money online gambling and social casino games. If it works, the San Francisco startup could resuscitate the slumping social game industry and fuse it with real-money online gambling, which has a much larger market.

London-based Betable’s “bet” is to create all of the infrastructure, payment system, licenses, anti-fraud procedures, and verification needed to prove whether a given consumer can legally play an online gambling game in given location. Then it will make that platform available to developers through an applications programming interface (API) so they can embed it in their new or existing social casino games. And presto, Betable’s online gaming system will automatically be integrated into a game.

“We’ve found a way to get the social game companies into the gambling market in a way that is disruptive,” said Christopher Griff (pictured above), the chief executive and founder of Betable, in an interview with GamesBeat. “This is a tectonic shift.”

If you play an online social casino game, for instance, you’re not allowed to win real money in the game if you live in the U.S. You can pay real money for virtual currency, but you can’t win real money because you are physically in a location that does not allow it. The problem for most online casino game companies is that it is hard to verify someone’s location. As a result, most of those companies don’t try to skirt the law and simply avoid real-money online gambling altogether.

But Betable has figured out how to solve this problem. Its chief technology officer is a location expert. So the company can verify a person’s exact location. When that person plays a social casino game on the web or on a mobile phone, Betable asks them if they want to play with real money. If the person says yes, then the company takes over and moves the game session to its servers, which are in territories where gambling is legal, such as the United Kingdom.

In the U.K., Betable has a license to operate online gambling on a worldwide basis. That’s an important detail that we’ll explain in a bit.

Betable has the technology to verify where a user is. It has anti-fraud technology that it can use to overcome someone who “spoofs” their Internet protocol address, or fakes their location. It does so by checking into a variety of records such as credit reports, bank accounts with real addresses, voting records, and other information. 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, then Betable allows 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 of that 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 applications programming interface (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 also makes it possible to 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 territories 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.

Social games generate around $7.3 billion in annual revenue, Playtech says, while online gambling companies generate $32 billion worldwide, and the casino industry generates $426 billion. By poking holes in the barriers between those industries, Betable enables social game companies to get access to the revenues in the much larger markets.

That’s why Zynga’s stock price rose earlier this year. That’s because there’s a chance the U.S. will legalize real-money online gambling, which has been banned here since 2006. In December, the Justice Department reinterpreted a law to allow skill-based online games, so long as states specifically allowed it. Nevada has passed a law to that effect, and Delaware is on the verge of doing the same. The promise of tax revenues from online gambling will likely spur other states to act. That means that U.S. consumers, who have a lot more money to spend than other consumers around the world, may one day be able to play real-money online gambling.

Even if online gambling is not legalized in the U.S., Betable has a big overseas market since 30 percent to 60 percent of social game players are outside of the United States.

“You could flip a switch and monetize this user base,” Griffin said.

This chance has spurred an investment frenzy in social casino game startups. IGT acquired social casino game maker Double Down Interactive, a firm with just 70 employees, in January for $500 million. Many companies are in a race to create vertically integrated gambling companies, with social casino games, real-money online gambling, and land-based casinos.

Betable itself has raised its own seed round. Today, the company has received an undisclosed amount of money from 25 investors including Greylock Discovery Fund, FF Angel LLC, True Ventures, Dave Morin (ex-Facebook employee and current founder of Path) and Yuri Milner, the Russian investor who took big stakes in Facebook and Zynga. Those are big-name supporters who believe that Betable has a shot at raising the average revenue per user and average customer lifetime value for social games.

Among the other investors are CrunchFund (Michael Arrington’s fund), Marc Abramowitz (first investor in Palantir), Scott Belsky (founder of Behance), Auren Hoffman (founder of Rapleaf), Sean Knapp (founder of Ooyala), Howard Lindzon (founder of Stocktwits), Matt Ocko (angel investor in Zynga), Joshua Schacter (founder of delicious), and Arjun Sethi (former CEO of Lolapps).

Betable is now recruiting developers to use its licensed gambling operation platform. Griffin believes that his company is bringing true innovation to the space and knocking down the barriers between social casino games and real-money online gambling. Griffin believes that the casino industry, while enormously profitable, has been stagnant and is ripe for disruption.

“This gambling industry has not had innovation for a long time,” Griffin said. “They use somebody else’s technology and they regurgitate games that have been around for 200 years. But the industry has multibillion-dollar companies.”

Part of the reason the gambling oligopoly exists is that it is hard to get gambling licenses. Betable has secured a license from the U.K. that is valid on a worldwide basis for online gambling. It took Betable two years to secure that license.

“FF Angel invested in Betable because it substantially reduces friction between businesses and gamers in a poorly structured market while maintaining high levels of compliance and accountability,” said Brian Singerman, a partner at Founders Fund, the firm that manages the FF Angel fund.

“We believe real-money gaming will make the social games industry more successful and has the potential to catapult games that offer it to the top of every app store on the planet,” said Tony Conrad, Partner at True Ventures. “While awaiting the US’ legalization of online gambling, which could take years, the overseas markets represent billions of dollars in opportunity for developers located anywhere in the world. Betable is in a great spot to help those developers participate in this emerging market.”

Betable has partnered with 30 developers in its alpha testing program, and now it will accept a number of new partners in its private beta program. Griffin will participate in a panel on the hot social casino game market at 2:30 p.m. on Tuesday at the GamesBeat 2012 conference. Betable will also hold a hackathon in San Francisco on the weekend of July 27-29. Betable has 15 employees, including a development team in San Francisco.

If Griffin has his way, soon, hundreds of game developers could be offering real-money online gambling on web or mobile platforms to their users in a matter of months.

“We have the opportunity to shake things up,” Griffin said.

GamesBeat 2012 is VentureBeat’s fourth annual conference on disruption in the video game market. This year we’re calling on speakers from the hottest mobile, social, PC, and console companies to debate new ways to stay on pace with changing consumer tastes and platforms. Join 500+ execs, investors, analysts, entrepreneurs, and press as we explore the gaming industry’s latest trends and newest monetization opportunities. The event takes place July 10-11 in San Francisco, and you can get your tickets here.

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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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