Bloomberg News

IPhones Become Mobile Casinos by Adding Real-Money Bets

August 16, 2012

Mobile Gambling Is a Big Bet

People will gamble $48 billion on mobile devices by 2015, and companies are setting up their businesses outside the U.S. Photographer: Brian Finke/Gallery Stock

IPhone users will soon be able to gamble with real money on virtual slot machines, trying their luck with the swipe of an index finger.

Big Fish Games Inc. is introducing a version of its gambling application Big Fish Casino with real-money betting in the U.K., where it is legal, the Seattle-based company said. It will arrive in Apple Inc. (AAPL:US)’s App Store in the coming weeks, and Betable Ltd., a London-based partner of Big Fish, will process bets in the program.

Game developers are building digital versions of Las Vegas casinos as users of smartphones and tablets are expected to wager $100 billion annually on the devices by 2017, up from about $20 billion last year, estimates Juniper Research. That potential payout has made Big Fish and other developers eager to replace virtual currencies with real cash in apps, even though use may be limited by gambling restrictions in the U.S.

“This is the biggest opportunity that game developers have had since the advent of the Internet,” Christopher Griffin, chief executive officer of Betable, said in an interview.

Big Fish may soon face competition from Zynga Inc. (ZNGA:US), the largest maker of social games, which last month said it plans to introduce real-money betting in the first half of 2013.

Restrictions on Internet gambling in the U.S. may also ease, as several states, including California, Nevada and New Jersey, are considering legislation to legalize the practice.

Game Makers

In the U.K., companies including Betfair Group Plc (BET), and William Hill Plc (WMH) currently have gambling in iPhone apps. Betable is working with dozens of other game makers to debut real-money games this year, Griffin said.

Big Fish Casino enables users to provide credit card numbers to place bets. Betable and Big Fish will divide the “take,” or the amount made on each slot machine wager.

Even as Apple’s storefront plays host to an increasing number of casino apps, the Cupertino, California-based company isn’t taking a cut of sales from gambling in its apps, Tom Neumayr, a spokesman for Apple, said in an interview. Games are permitted in the App Store as long as they comply with local laws, said Neumayr, who declined to comment specifically on Big Fish.

“Apple wants to keep arms’ length from this,” said Paul Thelen, CEO of Big Fish. “They don’t want to be the middleman in a gambling operation.”

Last year, Apple prevented Big Fish from operating a subscription service that would have given iPad users access to dozens of video games for a monthly fee.

Big Fish, founded in 2002, had revenue of more than $180 million last year, Thelen said. He expanded in online gambling with the March acquistion of Self Aware Games, a startup based in Oakland, California.

Many players already pay real money for virtual currency in Big Fish games to bet on poker, slots and other games of chance, though they cannot cash out their winnings. These users are likely to flock to real-money wagers, Thelen said.

“It’s a very lucrative opportunity,” Thelen said of real- money gambling in mobile games.

To contact the editor responsible for this story: Tom Giles at Tgiles5@bloomberg.net


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Companies Mentioned

  • AAPL
    (Apple Inc)
    • $107.34 USD
    • 0.60
    • 0.56%
  • ZNGA
    (Zynga Inc)
    • $2.34 USD
    • -0.06
    • -2.35%
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